New technology and rapid growth of shale gas extraction are transforming North American energy markets. But despite the drilling of thousands of shale gas wells across Canada and the potential for many more, the current state of substantial, credible research on the impacts of shale gas extraction by hydraulic fracturing (or “fracking”) is severely lacking, according to a new report.
An expert panel charged with examining the state of knowledge on the environmental impacts of shale gas extraction from the Council of Canadian Academies found research and monitoring data on fracking impacts neither sufficient nor conclusive. Water issues were highlighted as a major area of concern, along with GHG emissions, land use and human health impacts. The conclusion of the report points to just how much more research and disclosure is needed on fracking practices: “Whether or not shale gas development turns out in the long term to have a positive or negative influence on global well being will depend on how society [including governments, companies and investors] understands this technology and manages it.”
SHARE Executive Director Peter Chapman recently participated in a panel discussion on transparency to minimize water risks related to shale energy development at an event organized by the Program on Water Issues at the University of Toronto. The symposium focussed specifically on information for investors on water and fracking in Canada. Chapman outlined why disclosure is such a pertinent issue: “We ask for disclosure because it is the basis for the conversation with the company about its performance, because as an investor doing due diligence you need that information to assess risk, but also because disclosure is often a key part of a conversation that drives change within a company. Disclosure is not necessarily the final goal, but it is an important starting point.”
SHARE has been working for a number of years on behalf of our shareholder engagement clients to improve the level of information and transparency on fracking practices. As a next step in our engagement, SHARE has joined a collaborative engagement initiative led by the Principles for Responsible Investment (PRI) to improve disclosure and practices within the sector. This initiative focuses on energy companies active in existing and developing markets for fracking operations. PRI Managing Director Fiona Reynolds said at the launch of the initiative, “Better disclosure will ensure investors have the information they need to manage their exposure to the financial, operational and reputational risks associated with fracking within their portfolios and make informed decisions on behalf of their beneficiaries.”