Frackers disclosing less than half of information investors need, according to industry scorecard
Oil and gas companies engaged in hydraulic fracturing ‒ fracking ‒ in North America are disclosing too little information about their practices for investors to make informed investment decisions, according to a study by a series of organizations that promote good governance, environmental sustainability and investors’ rights.
None of the 24 fracking companies covered in the study disclose information on all 32 indicators that can help investors assess performance in minimizing environmental impact and risks associated with fracking, the report states.
The ‘scorecard’ of the fracking industry was compiled by the Investor Environmental Health Network and the As You Sow group of good governance advocates, among others.
‘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 US and Canada,’ the study authors write.
The scorecard places Encana, Canada’s largest natural gas producer, at the top of the list in terms of disclosure, but adds that the company only scores 14 out of the 32 points. Each point represents an indicator, or area of disclosure, that could help investors assess company performance in health, safety, environmental or governance matters.
After Encana on the scorecard comes Apache Corp and Ultra Petroleum, with 10 points each, followed by Hess Corp with eight. At the bottom of the list is QEP Resources, with one point. Southwestern Energy, Occidental Petroleum, ExxonMobil, BP and BHP Billiton all score two points.
The study authors say the most commonly reported indicator is executive compensation tied to health, safety and environmental performance, which is disclosed by 71 percent of the companies.
Next comes the use of pipelines to transport water instead of diesel trucks to lower air emissions, which is reported by 62 percent, while 46 percent disclose information on their use of non-potable water instead of drinking water.
