Big Oil Companies Face Growing Concerns Over Fracking

How their investors/shareholders voted on proposals regarding disclosure.  80)

 

http://www.reuters.com/article/2011/05/26/us-oilcompanies-fracking-...

 

from the article ...

 

Large blocks of investors in the two biggest U.S. oil companies on Wednesday demanded more disclosure about the environmental risks of extracting oil and gas through hydraulic fracturing.  Exxon Mobil Corp defended the practice at its annual shareholder meeting on Wednesday, even as investors peppered Chief Executive Rex Tillerson with concerns and questions about it.

 

A proposal requiring more disclosure by Exxon on the impact of "fracking" received about 30 percent of the votes by shareholders in the world's largest publicly traded oil company.

 

 

At rival Chevron Corp, which became heavily involved in fracking through a recent acquisition, 41 percent of shareholders backed a similar resolution.


"Breaking 40 percent on a first year resolution has only happened a few times in the last few decades, so it shows how seriously the company's shareholders are taking this issue," said Michael Passoff, who focuses on fracking at San Francisco-based corporate responsibility group As You Sow.

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I wonder what Natural Gas prices would be if the Federal Government started regulating Fracking as strictly as they regulate drilling in the GOM?

Wouldn't matter, we would import it from Mexico

 

The dangers of hydraulic fracturing contaminating fresh water aquifers are nothing but propoganda, as has recently been acknowledged by EPA Director Lisa Jackson.  EPA has finally publicly admitted there is absolutely no credible scientific evidence to show that fracking has caused damage to aquifers.  The states have been allowing fracking to occur safely for many years.  Fracking danger is a figment and a fraud, possibly perpetuated by the coal industry in Pennsylvania and appalachia.  The federal administration seems bound and determined to keep the coal industry in business by eliminating the new natural gas development from gas shales. Does anyone else really see what is happening?

Thanks for posting this Sesport,

 

Guys, this is big.  Please don't lose the key info in this news story.  Thirty-40% of shareholders voted for more disclosure.  Years ago I followed the corporate divestiture from South Africa.  Opponents of SA never got more than a fraction of the total shareholder vote. Other divestiture movements have happened over tobacco.  This is a huge vote for a company the size of Exxon-Mobil. Huge.  Thirty percent of Exxon's shareholders is MAJOR.

 

It's likely that we will see divestiture movements against fracking.  The pressure will probably come from public and university pension funds, both of which can be influenced by their members, students  and voters.  I think it will be successful because NG is so small.  A pension fund can cut it's investments in Exxon-Mobil or CHK and still have many other fossil fuel investments to choose from.  The economic effects on shale are small, but the PR impact is big.

 

PS: all the original resolution called for was more disclosure. It did not call for Exxon-Mobil to divest itself of shale gas. But, I expect other resolutions in future years will call for divestiture.  A university pension fund can drop Exxon and CHK and still find many profitable energy investments. That's what the fund managers look for in divestiture situations.  NG is still a small bite of a very large energy pie.

 

Logger,

 

Exxon is at or near the top of the Fortune 500, and is a member of the DOW 30.  I don't see divestiture as a serious risk for it.  Agree that the PR impact is big.  I am curious how the 30-40% of shareholders was determined?  Was that of the shareholders who actually voted their proxy, by the shareholders in terms of simple count, or was it weighted by stock ownership?  

 

Thanks

Dbob

votes are counted by shares. If you own 100 shares you have 100 votes. Big pension funds have many, many shares to vote.  So, 30% of the vote means 30% of ALL the shares voted in the election.  You are talking big, big money here. That's why the vote is significant,

 

I disagree about Exxon-Mobil being too big for divestiture.  I watched many pension funds drop companies who did business in South Africa.  It's much harder to divest from a country than a single company but the advocates were able to do it in many cases. It could have an impact on Exxon-Mobil and the fracking industry with just one big target for advocates to aim for.  Again, this is the percentage of shares held that voted in this election (big funds almost always vote)

 

 

Look at El Paso this past week where some fund that owned about 4% (I Think) wanted to divest El Paso E&P. A couple of days later El Paso said they were going to sell off E&P and concentrate on the pipeline end of the biz.

I didn't see anything about them selling the E&P but I did see that they were splitting the company into two separate publicly traded entities.  Do you really think that is why they chose to do this?  The release claimed it was because the pipeline group and the E&P group needed different management strategies and financial arrangements.

Not doubting you, TD.  Just trying to understand how these things work.

I could have read the whole thing wrong and my brain works different than most folks (ADHD) but don't you think this split will put E&P in position for a takeover by one of the big boys?

http://fuelfix.com/blog/2011/05/24/fuelfix-qa-el-pasos-foshee-says-...

 

FuelFix: The announcement today seemed to catch some analysts by surprise. Why do it now?

Foshee: When we started down this road we frankly didn’t know if the market would properly value our franchise together or properly value it apart.

What we discovered over the last six to 12 months is even though our share price performed really well — in 2010 we were No. 99 on the S&P 500 and this year-to-date we’re in the top 10 – we didn’t feel like it reflected the intrinsic value of the company. So we concluded we were more likely to get correct a valuation with two independently traded companies.

FuelFix: How much of a role did investor pressure play on making this decision?

Foshee: Saying that we got pressured into doing this is like saying I have to tell my 9-year-old daughters to eat their ice cream.

We’ve been working on this and the possibility for a really long time, with lots of discussions with our board, so we were just thrilled to be able to announce it. This was solely our decision, the management team and a very independent board.

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