A new report from As You Sow, Boston Common and the Investor Environmental Health Network (IEHN) called Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing ranks the oil majors involved in this industry not just on their disclosures but on their behaviours.
The top five ranked companies are BHP Billiton, Noble Energy, Apache Corp, Hess Corp and Range Resources. The bottom five are Whiting Petroleum, Continental Resources, Devon Energy, WPX Energy and Cabot Oil & Gas. Exxon Mobil and BP narrowly avoid being in the top five by being ranked sixth and seventh from the bottom. The top five all dramatically increased their scores over last year. Devon Energy’s and Cabot’s scores – and BP’s for that matter – were all lower.
There were many improvements noted in the report, such as assessing and reducing the toxicity of chemicals used in the process, better systems to track community concerns, reducing environmental footprints by creatively sourcing the water used. In addition, the report says: “Southwestern Energy and Apache have integrated Disclosing the Facts indicators into the indices of their corporate sustainability reports. BHP Billiton produces an annual hydraulic fracturing case study that adopts the Disclosing the Facts outline.” However, there are still widespread concerns over methane emissions, addressing the frequency of earthquakes (seismicity), and environmental and health impacts.
The report scores 28 oil and gas companies on their performance on 43 disclosure indicators. These are grouped under: toxic chemicals, water and waste management, air emissions, community impacts and management & accountability.
In order to encourage the ‘race to the top’ mentioned by Richard Liroff, executive director of IEHN, during a webcast on the report, I’d like to highlight some of the outstanding practices given in the report.Apache, for example, has reduced toxic chemicals by 60%. Range Resources says it identifies and evaluates domestic water wells’ surface and bottom hole locations within 1000 feet of proposed new well locations. Newfield Exploration discloses great detail about its seismicity precautions as it operates largely in Oklahoma, which has been plagued with fracking-related earthquakes.
Southwestern Energy has set a goal of being ‘freshwater neutral’ by the end of this year. Range Resources says it reuses nearly 99% of wastewater from its own processes and others.
Many of the other companies are developing treatment plants so water can be put back into the environment without damage. Hess and Southwestern have targets for reducing GHG emissions. Others, like CONSOL, are reducing emissions by switching to cleaner fuels for transport. Hess, Southwestern, Range Resources and Noble Energy, among others, disclose how they track community complaints and problems. Finally, a very high 22 companies report that management incentives are tied to health, safety, environmental and social impacts; and some companies, like CONSOL, assess contractors against similar benchmarks.
Given the incoming administration’s desire to reduce environmental regulations, Danielle Fugere of As You Sow said in the webcast that she is confident that those companies already going above and beyond regulatory requirements will continue to improve their processes, while the laggards may well take advantage of increased laxity and worsen their performance. Steven Heim, a managing director of Boston Common, said that the cost reductions involved in improving processes would likely be the biggest driver of improvements.