A major change in oil…
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One of the world’s largest oil and gas producers agreed to disclose the risks of hydraulic fracturing and the impact of its operations on air quality, water, and other damages. ExxonMobil, after negotiating with environmental groups and investors, said that it would publish in a September report these risks and how the company manages them. While it is unlikely the move will impact the energy company’s operations, it does suggest that Exxon’s executives are making a strategic move to release more data to assuage the concerns of the public as pressure to do so rises.
Investor group As You Sow has led the charge in brining companies to the table to act in a more socially responsible way. As a shareholder, As You Sow and other shareholder advocacy groups pressure their companies to make changes by filing proposals for shareholders to vote on. The groups successfully forced ExxonMobil to publish a report on March 31 that detailed the company’s risks to climate change – whether or not the company’s oil and gas assets would significantly lose value in a carbon-constrained world. Exxon’s report largely dismissed the prospect, arguing that fossil fuels are too valuable for the world to move beyond them anytime soon, but its decision to publish the report was a victory for advocacy groups.
Now, As You Sow, New York City’s Pension Funds, and other groups succeeded in making Exxon agree to follow up with a detailed analysis of the risks of fracking. They filed a proposal that would force the company to release hard data about the financial risks from oil spills, air and water pollution, and other damages. The groups withdrew their proposal after they reached a settlement with Exxon, the result of which, was the company’s decision to study those risks.
Shareholder groups have pressured Exxon on fracking every year since it acquired XTO Energy Inc. in 2010, allowing the company to become the nation’s largest producer of natural gas. About 30% of shareholders supported the fracking resolution each of the last four years, and it appears that Exxon executives are starting to make some small changes in response.
By Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com