December 13, 2013
More Environmental Risks for Fracking Operations
by Robert Kropp
A report by the Environmental Integrity Project warns that construction or expansion of more than
90 natural gas power plants could increase greenhouse gas emissions by 91 million tons.
Amid claims of national energy independence and reduced greenhouse gas (GHG) emissions, drilling
for shale gas by means of hydraulic fracturing has become the modern equivalent of a gold rush. But
the environmental and social risks associated with fracking are serious, and fortunately
sustainable investors wasted no time addressing them in their engagements with companies in their
In 2009, shareowners filed the first
of 21 resolutions that just one year later had already gained an unprecedented 40% support. In
2010, a coalition of institutional investors led by Green Century Capital Management and the Investor Environmental Health Network (IEHN) filed shareowner
resolutions with 12 companies, requesting improved transparency regarding the environmental impacts
of fracking, and the mitigation of risks associated with it.
By 2012, after IEHN and the
Interfaith Center on
Corporate Responsibility (ICCR) published an Investor Guide to engaging with oil and gas
companies on the practice, the focus of ICCR members in particular had widened to include
community impacts. "Negative local impacts are straining community resources and generating
opposition to fracturing operations," the resolution filed with Chevron stated.
recently as last month, a report
issued by a group of sustainable investment organizations found that “company disclosures are
insufficient to meet the needs of investors seeking to evaluate how companies are reducing the
potential health and environmental risks of natural gas and oil operations using hydraulic
fracturing in the United States and Canada.”
A case in point: Trillium Asset Management filed a resolution this year requesting
that Range Resources report on fugitive methane emissions from its fracking operations. Methane "is
a potent contributor to accelerating climate change with 72x the impact of CO2 on global
temperatures over a 20 year period," Trillium stated. "And a leakage rate above 3.2% makes natural
gas worse than coal in driving global warming."
Yet instead of constructive engagement,
the company attacked Trillium for its resolution, describing it as having “as its primary motive
the destruction of shareholder value in companies in the natural gas value chain and are asking
Range shareholders to pay for a fishing expedition to gather data to use against Range and the
industry in what appears to be part of the overall tactic of a small group of activist
organizations to attack the responsible development of fossil fuels.”
Now a report
published by the Environmental Integrity
Project (EIP) has outlined another risk associated with hydraulic fracturing, one that calls
into question the characterization of natural gas from fracking operations as a bridge fuel from
fossil fuels to renewable energy.
Since 2012, according to EIP, “companies have proposed
or already obtained 95 Clean Air Act permits authorizing...construction or expansion of more than
90 oil and gas, chemical, and petroleum plants.” While “Burning shale gas in power plants instead
of coal reduces greenhouse gas (GHG) emissions,” the report points out, the new construction “will
release about as much greenhouse gas pollution as 20 large baseload coal-fired power plants.”
“The total of 91 million additional tons of GHG pollution does not include new emissions from
proposed gas-fired power plants or the multitude of smaller wells, gas processing plants,
compressor stations, and flares springing up across the US,” the report continued.
Environmental Protection Agency is obligated under a Supreme Court decision that is now nearly
seven years old to set limits on greenhouse gas pollution under the Clean Air Act,” the report
concluded. “Case by case permitting is not a substitute for the national greenhouse gas emission
standards that EPA must establish for each of the industrial categories subject to Clean Air Act
regulation.” EIP was founded by former EPA enforcement attorneys to advocate for effective
enforcement of environmental laws.
“It’s important that we understand the full climate
change picture when it comes to America’s shale gas boom and the related tradeoffs,” EIP Director
Eric Schaeffer said. “Declining CO2 emissions from the electric power sector will be partially
offset by higher emissions from other industries cashing in on cheap and abundant supplies of oil
and gas from shale deposits.”
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