Shareholder Resolutions

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Company: WPX Energy
Subject: Natural Gas Hydraulic Fracturing
Year: 2015
Sector: Energy Production
Lead Filer: Green Century Capital Management
Outcome: Vote: 32.8%



Extracting oil and gas from shale and other formations, using horizontal drilling and hydraulic fracturing technology, has become a controversial public issue. Leaks, spills, explosions, and community impacts have led to bans and moratoria in the United States and around the globe.

Hydraulic fracturing operations (‘HFO') use millions of gallons of water and toxic chemicals to extract shale gas and oil. Over half of the U.S. HFOs are taking place in areas under high or extremely high water stress, according to a 2014 report from Ceres. WPX does not report on the amount of water consumed or recycled for all shaleplays where it is currently active.

Methane leakage from HFOs is also an issue of growing public and regulatory concern due to methane's potency as a greenhouse gas. WPX does not disclose its practices for monitoring or reducing methane leakage.

The Department of Energy's Shale Gas Production Subcommittee recommended in 2011 that companies "adopt a more visible commitment to using quantitative measures as a means of achieving best practices and demonstrating to the public that there is continuous improvement in reducing the environmental impacts of shale gas production." (emphasis in original)

WPX Energy fails to disclose quantitative metrics and key performance indicators related to how the company is managing the impacts of its HFOs on water, air, and local communities. A coalition of investors released a report in 2013 titled, "Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations", which scores companies engaged in hydraulic fracturing on their disclosures relating to management of risks associated with their hydraulic fracturing operations. WPX only received points for disclosing 3 out of the 32 requested key performance indicators relating to the company's practices for managing risks related to the environmental and community impacts of its HFOs.

Absent quantitative data reporting the company's impact on water, air, and local communities, investors cannot objectively evaluate risks associated with these impacts, as well as company progress in reducing these risks.

Resolved: Shareholders request the Board of Directors report to shareholders via quantitative indicators by November 31, 2015, and annually thereafter, the results of company procedures and practices, above and beyond regulatory requirements, to minimize the adverse environmental and community impacts from WPX's hydraulic fracturing operations associated with shale formations. Such reports should be prepared at reasonable cost, omitting proprietary information.

Supporting Statement

Proponents suggest the reports include a breakdown by geographic region, such as each shale play in which the company engages in substantial extraction operations, addressing at a minimum:

  • Methane leakage as a percentage of total production;
  • Quantity of fresh water and recycled water used for shale operations by region, including source;
  • Goals to eliminate the use of open pits for storage of drilling fluid and flowback water, with updates on progress;
  • Goals and quantitative reporting on progress to reduce toxicity of drilling fluids;
  • A systematic approach for aggregating and internally reporting community concern statistics to management.