Pioneer Hydraulic Fracturing 2013
|Company||Pioneer Natural Resources Co.|
|Filer||Calvert Asset Management Company, Inc.|
|Sector||Oil and Gas|
|Resolved Clause Summary||Report describing environmental and social challenges and opportunities associated with hydraulic fracturing|
WHEREAS: The Department of Energy secretary’s shale advisory panel recommended in 2011 that companies “adopt a more visible commitment to using quantitative measures as a means of achieving best practice and demonstrating to the public that there is continuous improvement in reducing the environmental impact of shale gas production.”
A 2012 University of Texas study, reviewing hydraulic fracturing regulations in 16 states, concluded that “regulatory gaps remain in many states, including the areas of well casing and cementing, water withdrawal and usage, and waste storage and disposal.” Local governments in New York State and Pennsylvania, concerned about adequacy of state regulation, are defending in litigation their right to impose controls beyond state regulations.
In its Form 10-K annual filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2011, The Company states that ‘if new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where the Company operates, it could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from drilling wells.’
Investors require specific, detailed, and comparable information about how companies are managing the challenges and opportunities created by operations that employ well stimulation using hydraulic fracturing. The 2011 report, “Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations” outlines 12 core management goals, best management practices, and key performance indicators that would provide such information. Publicly supported by a broad group of investors and various companies and environmental organizations, the guide stresses the importance of companies reporting quantitatively on key performance indicators.
RESOLVED: Shareholders request that Pioneer Natural Resources Company issue a report to shareholders, using quantitative and qualitative measures to describe how the Company manages the environmental and social challenges and opportunities associated with well stimulation that employs hydraulic fracturing. The report should be available by December 1, 2013, be prepared at reasonable cost, and omit proprietary information.
SUPPORTING STATEMENT: In 2012, the International Energy Agency (IEA) advised energy companies to “measure, disclose, and engage” in its report “Golden Rules for a
Golden Age of Gas.” The IEA described the need to, for example, establish baselines for key environmental indicators; consider establishing emissions targets; and recognize the case for third party certification of industry performance.
Proponents concur with the IEA’s suggestions and believe additional indicators could include for example, measures to reduce chemical use and toxicity; numbers of violation notices or equivalent administrative actions alleging serious health threats or environmental damage; measures to track and respond to community concerns; measures of water sourcing and waste water management by appropriate geological or geographic region; and measures to reduce emissions, such as the percentage of wells completed with reduced emission (“green completion”) methods.