NEW YORK ( TheStreet) -- The beginning of this year has been hard on investors of big energy companies ExxonMobil ( XOM), Chevron ( CVX), and EOG Resources ( EOG). From their 52-week highs these major integrated oil and gas companies are down anywhere from 11.5% to almost 15% so far.
Now, a group of investors have filed shareholder proposals pressuring five major oil and gas companies, including the three mentioned above, to disclose progress in reducing the impacts of their hydraulic fracturing (fracking) operations. The proposals target companies that received failing scores in a recently released report, and addresses the most controversial aspects of hydraulic fracturing.
The proponents of the shareholder resolutions represent environmental and social investors, as well as a leading public pension fund, the New York State Common Retirement Fund. Although from a publicity standpoint all news is good news, the energy sector has spent billions over the years trying to look environmentally responsible and a friend of nature.
Lucia von Reusner, the Shareholder Advocate at Green Century Capital Management, sent me the following news release that tells the story well:
"ExxonMobil, Chevron, EOG Resources, Occidental Petroleum ( OXY), and Pioneer Resources ( PXD) received shareholder resolutions from a coalition of investors concerned about the lack of reported progress in mitigating the risks associated with company hydraulic fracturing operations. The resolutions target companies that received failing scores... on their disclosed efforts to measure and mitigate the impacts of their hydraulic fracturing operations on communities and the environment."
On the other hand, Robert Rapier, the chief analyst for The Energy Strategist, who accompanied me this past summer when I flew to Alaska to inspect a small energy company's operations, recently noted that most people "still don't understand how much more oil is ready to come out of the ground. If you think fracking was revolutionary, wait until you read about a technique that can extract nine times the amount of oil that traditional drilling rigs can get at."
Robert had mentioned this process called "CO2 Injection," which is an enhanced recovery technique. The Energy Information Administration says CO2 injection could unlock up to 60 billion barrels of oil. At $100-a-barrel that's $6 trillion of oil.
Will CO2 injection be harmful to the environment and to the communities in the vicinity of this enhanced recovery technique? If so, the news about this coalition holding the energy companies' feet to the fire could have ongoing repercussions.
ExxonMobil, Chevron, EOG Resources and Occidental Petroleum received failing scores in a recently released report scoring companies engaged in hydraulic fracturing on disclosed operational impacts and mitigation efforts.
The report targets a total of 24 companies that use hydraulic fracturing against 32 indicators relating to management of toxic chemicals, water and waste, air emissions, community impacts and governance. ExxonMobil, Occidental Petroleum, Chevron and EOG Resources, scored points on just two, two, three, and six out of 32 indicators, respectively.