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Halliburton Loophole

"Father of Fracking"
George Mitchell
concerns over environmental
impacts of fracking

History of Fracking
Only a new technology

USA Fracking Stories

A Texan tragedy

Gas injection may have triggered earthquakes in Texas

California Lags in Fracking Regulations

All In for California Water

Fracking in Michigan

Fracking in Michigan Potential Impact on Health, Environment, Economy

Hydraulic fracturing of Marcellus Shale

Methane Gas from Marcellus Shale Drilling

Marcellus Shale Gas Economics

Health impacts of Marcellus shale gas drilling

Pennsylvania Fracking

Fracking in Virginia

Lesson From Wyoming Fracking

Water Pollution from Fracking

Hydraulic Fracturing Poses Substantial Water Pollution Risks

Methane in drinking water wells

Abandoned gas wells leak

Natural Gas Leaks Discovered in Boston

Methane Leaks Under Streets of Boston

Methane leaks make fracking dirty

Fracking effects real estate values

Fracking stimulates earthquakes

Protecting Gas Pipelines From Earthquakes

Gas Pipeline Earthquake - Simulations

America's crumbling pipelines

Averting Pipeline Failures

Dangers to Underground Pipelines

Gas Pipelines Could Serve as Wireless Links

Government Action needed on a National Energy Policy

EPA Releases Update on Ongoing Hydraulic Fracturing Study

Solar Booster Shot for Natural Gas Power Plants

Natural Gas Pricing Reform to Facilitate Carbon Tax Policy

Investing in fracking

What Oil Prices Have in Store?

Methane Out, Carbon Dioxide In

Health impacts of Marcellus shale gas drilling

Professor Ingraffea

Anti-Fracking Billboard

Natural Gas Drilling

Threats to Biodiversity

Pronghorn Migration
hindered by gas development

Microbes in a Fracking Site

Protozoa May Hold Key to World Water Safety

Shale Gas Production

Research into the Fracking Controversy

Convert Methane Into Useful Chemicals

Methane Natural Gas Into Diesel

'Natural Gas' at the molecular level

Arctic Methane risks

Arctic Methane Seeps

Great Gas Hydrate Escape

Undersea Methane Seep Ecosystem

Methane in the Atmosphere of Early Earth

Methane Natural Gas Linked to Climate Change

Cutting Methane Pollutants Would Slow Sea Level Rise

California | Colorado | Dakota | Marcellus | Massachusetts | Michigan | New York |
Ohio | Pennsylvania | Texas | Utah | Virginia | Wyoming

Shale Gas

Major Investors Warn Energy Companies of Business Risks in Flaring Gas at Shale Oil Wells

Letter to 21 firms warns of threat to the bottom line; calls practice “economically wasteful, environmentally damaging”

BOSTON Mar 29, 2012 With escalating shale oil production putting the US on track to become the world’s largest oil producer, investors are challenging an increasingly common industry practice – burning off or ‘flaring’ associated natural gas from shale oil wells – as environmentally damaging, economically wasteful and a threat to the industry’s bottom line.

“We are concerned that excessive flaring, because of its impact on air quality and climate change, poses significant risks for the companies involved, and for the industry at large, ultimately threatening the industry’s license to operate,” wrote three-dozen investors in a letter sent this week to 21 of the industry’s largest shale oil producers, including Continental Resources and Chesapeake Energy.

The letter notes that in North Dakota alone, which produced an average of 418,000 barrels each day last year and is now the third largest source of domestic oil production behind Texas and Alaska, annual flaring-related emissions were equivalent to more than two million tons of carbon dioxide, as much as adding 384,000 cars to the road.

“Shale oil holds the potential to transform the US oil industry, but its benefits will be drastically reduced if we don’t address flaring head-on,” said Mindy Lubber, president of Ceres, the business-investor coalition that helped organize the letter.

“The industry’s current approach to the issue raises serious questions as to whether that will happen, and merits a red flag from an investment community that looks to companies for long-term sustainability.”

“Excessive flaring is not only environmentally damaging but also a waste of a valuable resource,” added Karina Litvack, director, head of governance and sustainable investment at F&C Asset Management, one of the investors sending the letter.

“We want to encourage companies to articulate plans for resolving this issue while shale oil production is still in its relative infancy.”

Shale oil production is growing rapidly as a result of advances in recovery technologies, particularly directional drilling and hydraulic fracturing, or fracking.

These technologies have opened up previously inaccessible reserves of oil in shale formations in North Dakota, Texas, California, Colorado, Ohio, and several other states.

Goldman Sachs recently forecast that the U.S. is poised to become the world’s top oil producer in the next five years - a position it last occupied in 1973.

Nearly all of this increased production would come from shale oil fracking.

The letter focused on the industry’s practice of allowing billions of cubic feet of natural gas to be flared or vented as a byproduct of shale oil production. The practice is only loosely regulated at the state level.

“Few if any companies appear to have well-articulated plans for managing this growing risk,” said Steven Heim, director of social research and advocacy at Boston Common Asset Management.

“As long-term investors, such a short-sighted approach raises significant concerns.”

“On a lifecycle basis,” the investors’ letter continues, “emissions from oil produced with high flaring rates may be comparable to those from Canada’s vast oil sands region” - a particularly high-carbon oil source.

“This could make it subject to penalties under clean fuel standards like those adopted by California, and being actively considered by the 13 Northeast states that are members of the Regional Greenhouse Gas Initiative.

Such standards reduce the carbon intensity of fuel over time and limit the market for more carbon-intensive sources.”

Shale oil fracking takes place in an environment where regulation hasn’t kept up with booming production.

At the moment, this type of energy production is mostly regulated by the states, many of which are relatively new to oil and gas production and don’t yet have strong regulatory regimes in place.

The investor letter requests “information about the amount (each company) is currently flaring, as well as details about your plans to reduce flaring at existing wells and prevent it at future wells.”

The response deadline is May 1. Investors also asked to meet with the companies.

The letter, addressed to the CEOs of companies with major shale oil holdings, was sent to Anadarko, Apache, BP, Chesapeake Energy, Chevron, Continental Resources, Devon Energy, EOG Resources, ExxonMobil, Hess, Marathon Oil, Noble Energy, Oasis Petroleum, Occidental Petroleum, Pioneer Natural Resources, Royal Dutch Shell, SM Energy, Statoil, Talisman Energy, Total, and Whiting Petroleum.

The investor signatories, representing $500 billion in assets, include, among others, F&C Asset Management, Boston Common Asset Management, Local Authority Pension Fund Forum, PaxWorld Management, Portfolio 21 Investments and Presbyterian Church (USA).

The investor letter, with a full listing of signatories, can be seen here

Ceres is an advocate for sustainability leadership.

Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy.

Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $10 trillion.





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