Investors have welcomed improved disclosure – and behaviour – around hydraulic fracturing (fracking) risks at Houston-based independent oil and gas company Ultra Petroleum following four years of engagement on the issue.
An investor collation, spearheaded by sustainable funds firm Green Century Capital Management working with the Investor Environmental Health Network (IEHN), had sought improvements from the New York-listed company since 2009 via a series of proposals filed at its annual general meetings.
But a proposal planned for this year’s meeting by Green Century was withdrawn following commitments from the company, whose main operations are in southwest Wyoming and north central Pennsylvania.
The motion had sought regular reports to shareholders, using quantitative indicators, on its efforts to “minimize the adverse environmental and community impacts” from Ultra’s fracking operations.
Information was requested, for example, on the percentage of wells using “green completions” to capture leaked methane, the percentage of recycled water used and the goals and systems to reduce potentially harmful chemicals in fracturing fluids.
Now Green Century says behaviour and practices at Ultra, which was on the front page of the New York Times in 2011 for spreading 155,000 gallons of radioactive wastewater over roads across Pennsylvania to suppress dust, have “dramatically changed course” after seeing other investor resolutions on fracking gain strong backing at other AGMs.“The company not only stopped denying the risks of hydraulic fracturing, but also took significant steps to reduce the environmental impacts of its fracking operations, while also agreeing to be much more transparent about its operations going forward,” says Lucia von Reusner, Shareholder Advocate at Green Century.
Examples include stopping the use of fresh water, the removal of toxic biocide from fracturing fluid and the phasing out of open pits for wastewater storage by instead using a closed-loop system. It has also installed ‘green completions’ on 100% of its wells. Green completions will be a requirement on all new fracking wells in the US from January 2015.
Von Reusner said: “While we are pleased with this progress, we continue to hold Ultra Petroleum accountable for measuring and reporting on the effectiveness of all the policies and procedures it now has in place.” The firm will continue to push other companies, including EOG, Noble, ExxonMobil and Chevron to disclose and reduce environmental risks.
Separately, Green Century is also involved in a proposal at meat producer Tyson Foods calling on it to assess the financial risks associated with continuing to use controversial gestation crates to confine pigs. This is the second year the proposal has been filed, and has received public support from billionaire investor Carl Icahn.