ExxonMobil Corp. shareholders for the third year in a row turned back a shareholder proposal which would require the corporation to prepare a report on the risks associated with hydraulic fracturing (fracking). Chevron Corp. shareholders defeated a similar measure at their annual meeting, with fewer voting in favor than a year ago.
The ExxonMobil fracking measure was rejected by 70.4% of those voting, despite impassioned statements by several audience members and a recommendation in favor of the proposal by influential proxy advisory firm Institutional Shareholder Services Inc. ExxonMobil had attempted to block the resolution, a request that was rejected in March by the Securities and Exchange Commission (see Shale Daily, April 5).
This year's results were roughly in line with the vote last year's ballot, which was defeated by 71.75% of those voting (see Shale Daily, May 27, 2011).
At the Chevron annual meeting, 27% affirmed a shareholder resolution calling for more disclosure on fracking risks to operations and finances. Last year a similar measure had garnered 40% support.
The double-digit support last year moved ExxonMobil to launch a nationwide public relations campaign and Chevron to begin working more with industry groups to assure the public that drilling unconventional wells using fracking was safe. ExxonMobil is the largest natural gas producer in the United States and one of the biggest oil and gas producers in the world, while Chevron is the second-largest producer in the United States.
Following the latest annual meetings, fracking detractors claimed that ExxonMobil and Chevron weren't doing enough to disclose risks associated with unconventional drilling.
"While other companies are becoming more transparent in how they are managing the risks associated with fracking, ExxonMobil and Chevron are industry laggards when it comes to disclosure," said As You Sow Senior Strategist Michael Passoff. The shareholder advocacy group had filed the ExxonMobil resolution on behalf of the Park Foundation. "It is time for these major oil and gas companies to take a hard look at how they are going to manage the inherent financial and environmental risks of their fracking practices."
Several of the large domestic producers over the past year have agreed to more disclosures following pressure from shareholder groups (see Shale Daily, Dec. 15, 2011). Noble Energy Inc. and Stone Energy Corp. were among the latest to join a growing group of U.S. operators agreeing to make additional disclosures about how they manage risks associated with unconventional drilling (see Shale Daily, March 12).