The Green Gauge: Shale developers hit speed bumps

September 20, 2010

A pedestrian walks near a no drilling sign in Eagles Mere, Pennsylvania, September 5, 2010. In the rush to develop America's biggest new source of domestic energy, one community is fighting to protect its rural way of life from the environmental strains that accompany shale gas drilling.  REUTERS/Tim Shaffer

Development of shale gas has attracted myriad fans and enemies in recent months: those who cheer a source of natural gas on the home turf of the U.S. and environmentalists who warn the process to release the gas underground risks contaminating drinking water.

This month, Chesapeake Energy, Denbury Resources and Southwest Energy Co. each made headlines for environmental mishaps, and share the top spot in this issue of The Green Gauge, a breakdown of companies that made headlines Sept. 6 to Sept 19 for winning or losing credibility based on environment-related activity.

Selections of companies were made by Christopher Greenwald, director of data content at ASSET4, a Thomson Reuters business that provides investment research on the environmental, social and governance performance of major global corporations. These ratings are not recommendations to buy or sell.

bot25 Chesapeake Energy, Denbury Resources, Southwest Energy Co.

In the wake of the Gulf Oil disaster, environmentalists have become increasingly critical of the process of hydraulic fracturing, which involves blasting water, sand and chemicals into shale rock underground in order to retrieve natural gas.  A recent public hearing by the EPA on hydraulic fracturing in Binghamton, New York drew about 200 protesters, and the NGO Riverkeeper published a study in conjunction with the hearings outlining the risks of the technique for water contamination.

Several companies active in hydraulic fracturing for shale gas have faced notable controversies surrounding the impacts of the practice in recent weeks. Chesapeake Energy, a company that hopes to expand its hydraulic fracturing into New York State, was ordered to ensure the safety of its shale wells in Pennsylvania, after the Department of Environmental Protection found methane concentrations in water that could be traced back to several of the company’s sites.

Denbury Resources recently experienced a spill of over 200 barrels of crude oil and 1,500 barrels of hydraulic drilling fluid at a “fracking” shale well in North Dakota.

And Southwest Energy Production was recently sued by 13 families for contamination of the local water supply as a result of its hydraulic fracturing operations in Pennsylvania.

The issue will likely grow increasingly important as shale gas represents a significant source in the projected growth of natural gas production in the Unites States over the next decade.

For a copy of the Riverkeeper report detailing the risks and recent problems associated with hydraulic fracturing click here.

bot25 Enbridge, Inc.

While undergoing a congressional inquiry into its oil spill the damaged the Kalamazoo River in Michigan on July 26, Enbridge Inc. faced several additional environmental problems in its pipeline system that have forced additional shut-downs.

On Sept. 9, the company experienced an embarrassing pipeline oil spill of 6,000 gallons of crude oil in the Chicago suburb of Romeoville.  Although Enbridge contained the oil spill, the incident led to a week-long closure of the company’s pipeline outside of Chicago, which carries one third of U.S. crude imports from Canada.

In addition, the company last week temporarily shut a third pipeline in New York after leaks were discovered.   The company’s 6B pipeline system in which the Kalamazoo River spill occurred remains closed almost two months after the Kalamazoo spill due to concerns about its condition and risk to the environment, particularly near the St. Clair River.

top25 Whole Foods Markets

Whole Foods recently introduced a series of sustainable packaging guidelines for all of its 2,100 body care and supplement products.  The new guidelines require suppliers to limit the use of plastic and to switch to post-consumer recycled materials or to materials that are easily recyclable.  The company has given suppliers one year to adopt the new guidelines, and Whole Foods has already committed to switching to all post-consumer recycled content for its store brand body care products by the end of the 2010.

top25 Unilever

Unilever announced it was making a strategic investment in Solazyme, an American biotechnology company that produces renewable oil and bio-products from microalgae.  The investment comes in the wake of increasing pressure on consumer products companies to find sustainable substitutes to palm oil following a scandal surrounding unsustainable palm oil production by Sinar Mas and a campaign by Greenpeace against Nestle concerning the use of palm oil in Kit-Kat candy bars.   Unilever has made a pledge to source all of its palm oil from sustainable sources by 2015, and the company recently announced that it has signed a deal to segregate sustainable palm oil from one of its leaders suppliers, Unimills, as part of this commitment.

________________________________

Photo shows A pedestrian walks near a no drilling sign in Eagles Mere, Pennsylvania, September 5, 2010. REUTERS/Tim Shaffer

3 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

> environmentalists have become increasingly critical of the process of hydraulic fracturing,

Safe? Unsafe? Both sides should agree to remove the hydraulic fracturing exemptions from the Clean Air Act, the Clean Water Act, and a host of other federal environmental rules. If it is safe, the industry has nothing to fear from the rules. If it is dangerous, we need protection.

Posted by CutRedTape | Report as abusive

History is replete with mining and oil companies drilling and mining, and when they have finished destroying the environment, they merely say, “Thanks, sorry for the mess.”, and then they leave. As long as they are allowed to walk away from their mistakes, and leave the rest of us to live with polluted water, air, land, etc., this will not end.

Posted by GMan310 | Report as abusive

Couldn? to become created any benefit. Reading this write-up reminds me associated with our aged room companion! He / she generally retained referring to this specific. I am going to onward this short article to your pet. Sure he’ll almost certainly have a very great read. Many thanks for revealing!