Disclosing the Facts 2016 is the fifth in a series of investor reports intended to promote improved operating practices among oil and gas companies engaged in horizontal drilling and hydraulic fracturing. Hydraulic fracturing is performed to release oil and gas from what is currently known as “unconventional resources”—shale and other geological formations from which oil and gas are difficult to retrieve without fracturing. From a production perspective, these formations are anything but unconventional; the U.S. Energy Information Administration reports that in 2015 “unconventional resources” yielded approximately two-thirds of the natural gas and roughly half of the oil produced in the United States.
Download the Executive SummaryThese operations often use toxic chemicals and high volumes of water, release significant levels of greenhouse gases and other pollutants, and have the potential to adversely impact local communities when not properly managed. These issues, in turn, can translate into financial risk to companies and shareholders in the form of fines, regulations, lawsuits, and threats to companies’ social license to operate.
Following the maxim of “what gets measured, gets managed”, this report encourages oil and gas companies to increase disclosure about their use of current best practices to minimize the environmental risks and community impacts of their “fracking” activities. Review of disclosed management practices and associated key performance indicators is the primary means by which investors gauge how companies are managing the business risks associated with their environmental and community impacts.
This 2016 scorecard benchmarks the public disclosures of 28 companies on 43 key performance indicators. It distinguishes companies disclosing more information about practices and impacts from those disclosing less. The scorecard assesses five areas of environmental, social, and governance metrics, emphasizing, on a play-by-play basis, quantitative disclosures in five areas: (1) toxic chemicals; (2) water and waste management; (3) air emissions; (4) community impacts; and (5) management accountability. The scorecard relies solely on publicly available information that companies provide on their websites, in corporate SEC postings, or in other reports linked from their websites.
The report focuses on “play-by-play” disclosure, as distinct from reporting at an aggregate level such as company- or country-wide. “Play-by-play” is shorthand for localized reporting, which is appropriate since health and environmental impacts and social license controversies are usually localized. However, in addition to facilitating understanding of local stakeholder relations, localized reporting is important because it offers insight into how company systems for managing risks and impacts are functioning in practice.
This year, the report card has been compiled amid a continuing dramatic contraction of well drilling and completion activities and enormous financial write-offs. As reported by Baker Hughes, the number of operating drilling rigs dropped to 476 in March 2016 from a peak of 1,931 in late 2014. Nearly 100,000 jobs linked to the oil and gas sector have been lost in the United States, bankruptcies have multiplied, and companies are now focusing on their most profitable areas rather than expanding into new frontiers.
Despite the sharp downturn from the pell-mell growth of the prior ten years, a core group of companies within the industry has maintained and enhanced disclosures of their practices for managing the environmental risks and community impacts of their operations. While the number of leading scorers has grown, the majority of the oil and gas sector is still leaving investors in the dark about their risk management practices.
These tables contain the score breakdown for each company by indicator. A checkmark means the company earned a point for that metric.
COMPANY | 2015 SCORE | 2016 SCORE |
---|---|---|
Anadarko Petroleum Corp. (APC) | 15 | 20 |
Antero Resources (AR) | - | 7 |
Apache Corp. (APA) | 20 | 29 |
BHP Billiton, Ltd. (BHP) | 32 | 40 |
BP plc (BP) | 8 | 6 |
Cabot Oil & Gas Corp. (COG) | 8 | 5 |
Carrizo Oil & Gas, Inc. (CRZO) | 0 | 23 |
Chesapeake Energy Corp. (CHK) | 4 | 12 |
Chevron Corp. (CVX) | 4 | 7 |
ConocoPhillips Corp. (COP) | 11 | 15 |
CONSOL Energy, Inc. (CNX) | 19 | 22 |
Continental Resources, Inc. (CLR) | 2 | 2 |
Devon Energy Corp. (DVN) | 7 | 3 |
Encana Corp. (ECA) | 8 | 10 |
EOG Resources, Inc. (EOG) | 8 | 8 |
EQT Corp. (EQT) | 14 | 21 |
Exxon Mobil Corp. (XOM) | 4 | 6 |
Hess Corp. (HES) | 21 | 27 |
Newfield Exploration Co. (NFX) | 6 | 20 |
Noble Energy, Inc. (NBL) | 19 | 35 |
Occidental Petroleum Corp. (OXY) | 10 | 12 |
Pioneer Natural Resources (PXD) | 3 | 7 |
QEP Resources, Inc. (QEP) | 15 | 12 |
Range Resources Corp. (RRC) | 11 | 27 |
Royal Dutch Shell plc (RDS) | 11 | 15 |
Southwestern Energy Co. (SWN) | 16 | 27 |
Whiting Petroleum Corp. (WLL) | 2 | 2 |
WPX Energy, Inc. (WPX) | 3 | 4 |
2015 had a total of 39 possible points. 2016 had a total of 43 possible points.
COMPANY | Quantitative Toxicity Reduction | Use of Dry Chemicals | No Diesel in Frac Fluids | No BTEX in Frac Fluids | CBI Exclusion Disclaimer | Reducing Contractor CBI Claims | Section Total |
---|---|---|---|---|---|---|---|
ANTERO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
ANADARKO | 0 | 1 | 1 | 0 | 1 | 1 | 4 |
APACHE | 1 | 1 | 1 | 1 | 1 | 1 | 6 |
BHP-BILLITON | 1 | 1 | 1 | 1 | 0 | 1 | 5 |
BP | 0 | 1 | 0 | 0 | 1 | 0 | 2 |
CABOT | 0 | 0 | 1 | 1 | 0 | 0 | 2 |
CARRIZO | 0 | 0 | 1 | 1 | 1 | 0 | 3 |
CHESAPEAKE | 1 | 1 | 1 | 0 | 1 | 0 | 4 |
CHEVRON | 0 | 0 | 1 | 1 | 0 | 0 | 2 |
CONOCO PHILLIPS | 0 | 0 | 1 | 1 | 1 | 0 | 3 |
CONSOL | 0 | 0 | 1 | 0 | 0 | 0 | 1 |
CONTINENTAL RESOURCES | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
DEVON | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
ENCANA | 0 | 0 | 1 | 0 | 0 | 0 | 1 |
EOG | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
EQT | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
EXXON MOBIL | 0 | 0 | 1 | 0 | 0 | 0 | 1 |
Hess Energy | 1 | 0 | 1 | 1 | 0 | 0 | 3 |
NEWFIELD RESOURCES | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
NOBLE ENERGY | 0 | 1 | 1 | 0 | 1 | 0 | 3 |
OCCIDENTAL PETROLEUM | 0 | 0 | 1 | 1 | 1 | 0 | 3 |
PIONEER | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
QEP | 1 | 0 | 1 | 1 | 1 | 0 | 4 |
RANGE RESOURCES | 0 | 1 | 1 | 1 | 0 | 0 | 3 |
SHELL | 0 | 0 | 1 | 0 | 1 | 0 | 2 |
Southwest | 1 | 0 | 1 | 1 | 1 | 0 | 4 |
WHITING OIL & GAS | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
WPX | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Questions in italics were newly added to the 2016 company survey.
COMPANY | Cement Evaluation | Well Integrity | Assesses Offset Wells | Avoids Inducing Seismic Activity | Pre-drill H2O Monitor^ | Post-drill H2O Monitor^ | Flowback Water Reuse %^ | Total Water Use^ | Water Source Types^ | Non-potable Water Policy | Water Scarcity Planning | Water Intensity^ | Wastewaster Storage^ | Closed Loop Drilling Residuals^ | NORMS Disclosure | Section Total |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
ANTERO | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 0 | 2 |
ANADARKO | 1 | 0 | 0 | 1 | 0 | 0 | 0 | 1 | 1 | 1 | 1 | 0 | 0 | 1 | 0 | 7 |
APACHE | 1 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 1 | 12 |
BHP-BILLITON | 1 | 1 | 1 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 14 |
BP | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 2 |
CABOT | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 |
CARRIZO | 1 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 1 | 1 | 1 | 12 |
CHESAPEAKE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 1 | 2 |
CHEVRON | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
CONOCO PHILLIPS | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 3 |
CONSOL | 0 | 0 | 1 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 1 | 1 | 0 | 9 |
CONTINENTAL RESOURCES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
DEVON | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 1 | 2 |
ENCANA | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
EOG | 1 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 3 |
EQT | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 1 | 0 | 1 | 1 | 1 | 1 | 6 |
EXXON MOBIL | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 3 |
Hess Energy | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 14 |
NEWFIELD RESOURCES | 1 | 1 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | 1 | 1 | 0 | 0 | 1 | 1 | 8 |
NOBLE ENERGY | 1 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 14 |
OCCIDENTAL PETROLEUM | 1 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 1 | 0 | 7 |
PIONEER | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 2 |
QEP | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 3 |
RANGE RESOURCES | 1 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 1 | 12 |
SHELL | 0 | 0 | 0 | 1 | 1 | 1 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 5 |
Southwest | 0 | 1 | 1 | 0 | 0 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 1 | 1 | 10 |
WHITING OIL & GAS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
WPX | 1 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 |
Questions in italics were newly added to the 2016 company survey.
COMPANY | Low Emission Pad Ops.^ | % Low Emission Vehicle Conversion | Addt'l Voluntary Emission Reductions^ | Pipelines Replace Trucks^ | Methane Leakage % | Low-bleed Controllers | Leak Detection Practices | Leak Detection Frequency | Methane Target | GHG Target | Section Total |
---|---|---|---|---|---|---|---|---|---|---|---|
ANTERO | 1 | 0 | 1 | 1 | 0 | 0 | 1 | 0 | 0 | 0 | 4 |
ANADARKO | 0 | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 2 |
APACHE | 0 | 1 | 0 | 0 | 1 | 0 | 1 | 0 | 1 | 0 | 4 |
BHP-BILLITON | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 10 |
BP | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
CABOT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
CARRIZO | 0 | 0 | 0 | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 5 |
CHESAPEAKE | 1 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 3 |
CHEVRON | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 1 |
CONOCO PHILLIPS | 0 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 1 | 3 |
CONSOL | 1 | 0 | 1 | 0 | 0 | 1 | 1 | 1 | 0 | 0 | 5 |
CONTINENTAL RESOURCES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
DEVON | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
ENCANA | 0 | 0 | 1 | 1 | 1 | 1 | 0 | 0 | 0 | 0 | 4 |
EOG | 0 | 0 | 0 | 0 | 1 | 0 | 1 | 0 | 0 | 0 | 2 |
EQT | 1 | 0 | 1 | 0 | 1 | 1 | 1 | 1 | 0 | 0 | 6 |
EXXON MOBIL | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Hess Energy | 0 | 1 | 0 | 0 | 1 | 1 | 0 | 0 | 1 | 1 | 5 |
NEWFIELD RESOURCES | 1 | 1 | 1 | 0 | 1 | 1 | 1 | 1 | 0 | 0 | 7 |
NOBLE ENERGY | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 8 |
OCCIDENTAL PETROLEUM | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 |
PIONEER | 0 | 1 | 0 | 1 | 0 | 0 | 1 | 0 | 0 | 0 | 3 |
QEP | 0 | 1 | 0 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | 3 |
RANGE RESOURCES | 1 | 1 | 0 | 1 | 0 | 1 | 0 | 1 | 0 | 0 | 5 |
SHELL | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
Southwest | 1 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 8 |
WHITING OIL & GAS | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 |
WPX | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Questions in italics were newly added to the 2016 company survey.
COMPANY | Community Impact Concerns, Company Response^ | Data Tracking of Local Concerns | Upward Reporting within Company | Traffic Congestion Policies | Driver Training & Tracking | Light, Noise, & Odor Actions | Section Total |
---|---|---|---|---|---|---|---|
ANTERO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
ANADARKO | 0 | 1 | 1 | 1 | 1 | 1 | 5 |
APACHE | 0 | 1 | 1 | 1 | 1 | 1 | 5 |
BHP-BILLITON | 1 | 1 | 1 | 1 | 1 | 1 | 6 |
BP | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
CABOT | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
CARRIZO | 0 | 0 | 0 | 1 | 0 | 0 | 1 |
CHESAPEAKE | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
CHEVRON | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
CONOCO PHILLIPS | 0 | 1 | 1 | 1 | 1 | 0 | 4 |
CONSOL | 0 | 0 | 0 | 1 | 0 | 0 | 1 |
CONTINENTAL RESOURCES | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
DEVON | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
ENCANA | 0 | 1 | 0 | 1 | 0 | 0 | 2 |
EOG | 0 | 1 | 1 | 1 | 0 | 0 | 3 |
EQT | 1 | 1 | 1 | 1 | 1 | 0 | 5 |
EXXON MOBIL | 0 | 0 | 0 | 1 | 0 | 0 | 1 |
Hess Energy | 0 | 1 | 0 | 1 | 1 | 0 | 3 |
NEWFIELD RESOURCES | 0 | 1 | 1 | 0 | 0 | 0 | 2 |
NOBLE ENERGY | 1 | 1 | 1 | 1 | 1 | 1 | 6 |
OCCIDENTAL PETROLEUM | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
PIONEER | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
QEP | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
RANGE RESOURCES | 1 | 1 | 1 | 1 | 1 | 1 | 6 |
SHELL | 0 | 1 | 0 | 1 | 1 | 0 | 3 |
Southwest | 0 | 1 | 0 | 1 | 1 | 0 | 3 |
WHITING OIL & GAS | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
WPX | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
Questions in italics were newly added to the 2016 company survey.
COMPANY | Senior Management Pay Tied to HES | Senior Pay Link to Other HES Indicators | 3rd Party Audit for HES | 3rd Party Info Used for Contractor Hiring | NOVs and Fines^ | NOV Trends^ | Section Total |
---|---|---|---|---|---|---|---|
ANTERO | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
ANADARKO | 1 | 0 | 0 | 1 | 0 | 0 | 2 |
APACHE | 1 | 0 | 0 | 1 | 0 | 0 | 2 |
BHP-BILLITON | 1 | 1 | 0 | 1 | 1 | 1 | 5 |
BP | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
CABOT | 0 | 0 | 1 | 1 | 0 | 0 | 2 |
CARRIZO | 0 | 0 | 1 | 1 | 0 | 0 | 2 |
CHESAPEAKE | 1 | 0 | 0 | 1 | 0 | 0 | 2 |
CHEVRON | 1 | 0 | 1 | 0 | 0 | 0 | 2 |
CONOCO PHILLIPS | 1 | 0 | 0 | 1 | 0 | 0 | 2 |
CONSOL | 1 | 1 | 1 | 1 | 1 | 1 | 6 |
CONTINENTAL RESOURCES | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
DEVON | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
ENCANA | 1 | 0 | 0 | 1 | 0 | 0 | 2 |
EOG | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
EQT | 1 | 0 | 1 | 1 | 1 | 0 | 4 |
EXXON MOBIL | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
Hess Energy | 1 | 0 | 0 | 1 | 0 | 0 | 2 |
NEWFIELD RESOURCES | 1 | 0 | 1 | 1 | 0 | 0 | 3 |
NOBLE ENERGY | 1 | 0 | 1 | 1 | 1 | 0 | 4 |
OCCIDENTAL PETROLEUM | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
PIONEER | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
QEP | 1 | 0 | 0 | 1 | 0 | 0 | 2 |
RANGE RESOURCES | 0 | 0 | 0 | 1 | 0 | 0 | 1 |
SHELL | 1 | 1 | 1 | 1 | 0 | 0 | 4 |
Southwest | 1 | 0 | 0 | 1 | 0 | 0 | 2 |
WHITING OIL & GAS | 0 | 0 | 0 | 1 | 0 | 0 | 1 |
WPX | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
Questions in italics were newly added to the 2016 company survey.
The information in this report has been prepared from sources and data the authors believe to be reliable, but we assume no liability for and make no guarantee as to its adequacy, accuracy, timeliness, or completeness. Boston Common Asset Management, LLC may have invested in and may in the future invest in some of the companies mentioned in this report. The information in this report is not designed to be investment advice regarding any security, company, or industry and should not be relied upon to make investment decisions. We cannot and do not comment on the suitability or profitability of any particular investment. All investments involve risk, including the risk of losing principal. No information herein is intended as an offer or solicitation of an offer to sell or buy, or as a sponsorship of any company, security, or fund. Opinions expressed and facts stated herein are subject to change without notice. The views expressed in Disclosing the Facts 2016 do not necessarily express the views of all IEHN members.