Fractured Communities: Hydrofracking in the Natural Gas Industry

We have all borne witness to the environmental and social risks associated with the energy industry. Whether it’s the despoiling of thousands of miles of coastline and ecosystems in the Gulf of Mexico from deepwater drilling gone awry, or the deaths of coal miners in the mountains of West Virginia due to sloppy safety procedures, we can all testify to the need for taking greater precautions in fuel exploration and production.

Hydraulic fracturing, more commonly known as “hydrofracking” or simply“fracking”, is no exception. A natural gas
extraction method that injects a mix of millions of gallons of water, sand, and chemicals under thousands of pounds of pressure into underground rock to create fractures through which natural gas can flow for collection, fracking has come under increased scrutiny of late for its potential environmental and social tolls. In communities across NY, OH, PA, WV, VA and MD where the Marcellus Shale formation provides rich reserves of untapped gas, the lines are being starkly drawn between those who see natural gas drilling as a potential boon to otherwise economically depressed
neighborhoods and those who are leery of the potential health hazards.

Read our new publication on fracking: "Extracting the Facts"

While fracking, originally used to drill for water, is not inherently unsafe, the “slick water” fracking process used in natural gas production may contain harmful chemical additives like benzene, formaldehyde and hydrochloric acid -- chemicals that are known carcinogens, corrosive, or otherwise toxic. Given the extractives industry’s record of
late, ICCR members are calling on energy companies to implement proper safety mechanisms in fracking wells to ensure that toxicants or methane gas won’t accidentally leak into local groundwater aquifers. “Once those chemicals get into the drinking water, there’s no treatment plant that can remove them,” says Sr. Nora Nash of the Sisters of St. Francis of Philadelphia, with grave concern. Often, the wastewater is stored in open pits (see photo, left) and the byproducts of fracking – contaminated water and airborne toxicants – can be very dangerous. “These companies need to have absolute control over every step of the process, and make a commitment to traceability and sustainability,” says Nash.

Several ICCR members are leading company engagements that call for increased scrutiny and the implementation of controls that will safeguard against these risks. Apart from the moral mandate to protect our communities, the potential material and reputational risks, should yet another energy disaster occur, are compelling business reasons that are gaining traction with certain companies.

“Using BP as a cautionary example, we have been pressing companies that use fracking in their operations to closely monitor and disclose potential hazards,” said Richard Liroff of the Investor Environmental Health Network (IEHN). “Water quality needs to be continually assessed and they need to look for ways to reduce the toxicity of the entire process,” said Liroff.

A multi-year dialogue between Boston Common Asset Management and Apache Corp. on a range of issues provided the crucial basis of trust on which an important breakthrough on fracking was reached. The company is now in talks with BCAM, IEHN, and other investors about improving its fracking lifecycle Key Performance Indicators
and, importantly, Apache is endeavoring to bring other companies into the conversation.“By convening investor forums, developing new ways to reduce or eliminate freshwater use, and pressing other companies to disclose
their fracking chemicals, Apache has assumed a real leadership role in its industry,” says Boston Common’s Steven Heim. “It has made remarkable progress.”

ICCR and IEHN are also making progress through shareholder resolutions. Of those that went to a vote of shareholders this spring, our Energen resolution won a near majority with 49.5% of the vote, the Ultra Petroleum resolution 41.7%, and Chevron achieved 40.4% — powerful incentives for companies who haven’t yet done so to
begin engaging with shareholders on their fracking practices. “There are both leaders and laggards in the natural gas industry. While many companies have adopted a ‘circle the wagons/shoot the messengers’ approach, some are making meaningful progress,” said Liroff.

Meanwhile, Nash’s Pennsylvania community of sisters, shareholders in oil and gas companies ExxonMobil, Anadarko, Chesapeake and Chevron, are asking these companies and State legislators to address significant human rights and environmental violations. Said Nash, “I’m a resident of Pennsylvania, and I’ve seen communities
split in two because some people leased their mineral rights to the industry for a practice they knew nothing about while others are sounding the alarm. The thing is, either way your water may get contaminated.”

“Fracking doesn’t just fracture shale – it fractures communities, too” says Nash.

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