Friday, May 27, 2011
Fort Worth Star-Telegram, Texas
by Jack Z. Smith
An obviously frustrated Exxon Mobil CEO Rex Tillerson jumped to the defense of hydraulic fracturing Wednesday while taking verbal pokes at the news media's reporting on the controversial process used to extract more oil and natural gas from rock formations.
Hydraulic fracturing, dubbed "fracking," has not been confirmed as the cause of contamination of water wells or aquifers in a single instance, Tillerson said during the company's annual shareholders meeting at the Morton H. Meyerson Symphony Center in Dallas.
A resolution calling for the company's board of directors to prepare a report on "known and potential impacts of Exxon Mobil's fracturing operations" was defeated after receiving support from 28.2 percent of shares voted.
The company opposed the measure, saying it operates "in an environmentally responsible manner," issued public statements about fracking and believes a report is unnecessary.
The Rev. Michael Crosby, a Franciscan friar from Milwaukee who deals with corporate responsibility issues, said at the meeting that Exxon "has not provided sufficient information" about its fracturing operations. "Shareholders have no way of assessing the risks and rewards," he said.
In a news conference after the meeting, Tillerson said that, in cases where groundwater supplies have been polluted, a likely cause is underground migration of methane gas or other contaminants as a result of old wells not having been "drilled as they should" in the 1920s, '30s or '40s.
In earlier decades, drilling regulations were not as exacting and industry technology was much less advanced.
"More often than not," cases of groundwater pollution are "not associated with any current-day activities," Tillerson said.
He also said that, in areas such as North Texas, extensive use of water wells has resulted in large withdrawals from aquifers, which could contribute to movement of potential contaminants such as methane gas into the aquifers.
Tillerson said fracking, which has drawn heavy media attention in recent years, has been portrayed as "something new and futuristic" while "in fact, this technology has been around 50 to 60 years."
Irving-based Exxon Mobil has been drawn into the debate on hydraulic fracturing after its acquisition last year of Fort Worth-based XTO Energy, a major shale-gas producer.
That acquisition made Exxon Mobil the largest natural gas producer in the U.S.
By adding XTO, "we have created the premier unconventional gas company," Tillerson told shareholders.
The company is now considering budding shale plays worldwide and is partnering with the French oil firm Total to explore for shale gas in Poland.
With a surge in U.S. shale-gas drilling, pioneered in North Texas' Barnett Shale, advanced horizontal drilling and fracturing techniques have led to much bigger "frack jobs" in completion of wells. But the fractures occur thousands of feet below freshwater aquifers and extend no more than about 400 feet upward, industry experts say.
The Environmental Protection Agency has launched a detailed study of fracking, and University of Texas researchers are taking an in-depth look as well.
Various other scientific and environmental groups have also examined the process.
Tillerson told reporters that fracking has a bad rap partly because of "you guys" in the media.
Exxon Mobil plans an advertising campaign "to reach out to the public with fact-based information" about fracking and other drilling issues, Tillerson said.
"We have some problems in getting out the message with some of you folks," he told reporters. "So we have to go out and buy some of the space" in which to present the industry's viewpoint, he said.
Tillerson said some fracking critics have made "pretty casual statements ... that have not been backed up with any kind of facts."
But the As You Sow Foundation -- a nonprofit organization that backed resolutions at the Exxon Mobil and Chevron shareholders meetings calling for more information about fracking -- said the 28.2 percent favorable vote at the Exxon meeting and 41 percent by Chevron shareholders show that "mainstream investors are concerned about fracking and want more disclosure."
Copyright (c) 2011, Fort Worth Star-Telegram, Texas
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