Investors Ask the Oil and Gas Industry To Disclose Water Risks
The oil and gas industry use a tremendous amount of water. An average of about 10 barrels of water are produced for every barrel of oil in the U.S. Water use for oil production can affect the availability of water for other uses and can even impact aquatic habitats. Hydraulic fracturing, better known as fracking, produces large amounts of wastewater containing contaminants. That wastewater is often injected into deep wells, and injecting it can cause earthquakes.
A group of almost 100 institutional investors representing $6 trillion in assets recently announced the launch of a campaign called Fueling Water Disclosure to promote sustainable water resource management in the oil and gas sector.
Prior to launching the campaign, the investors and members of the Interfaith Center on Corporate Responsibility sent a letter to 36 oil and gas companies that have not responded to the CDP Water Questionnaire. The letter asks that companies report on their water use as “companies that respond to the questionnaire signal to investors that they are strategically measuring and managing water-related risks.”
“Water is a critical resource and the energy industry uses a lot of water,” Lila Holzman, As You Sow, Energy Program Manager told Global Warming Is Real. “The energy industry also impacts water in terms of both quality and broadly speaking, the energy industry impacts climate change which affects water patterns. So, there's a lot of cycles that affect what we think of as the water-energy nexus.”
The campaign came about as a group of people “who work in these topics came together to get these letters out, get all of the investors to sign on, and get all of the letters out to the companies,” Holzman said.
Laura Gosset, Senior Analyst, Shareholder Engagement and Policy, Shareholder Association for Research and Education (SHARE) describes the campaign as “an investor campaign to promote sustainable water resource management in the oil and gas sector.” She told Global Warming Is Real that they are “asking these companies to disclose key pieces of information, including how they are thinking about water risk, how they are assessing their risk, how they are governing those risks, what kind of strategies they have in place, what kind of targets they have in place, and how are they really thinking about water and managing those risks.”
The example of Chevron shows why the campaign is needed
The oil and gas giant Chevron serves as an example of why the campaign is needed. About one-third of Chevron’s upstream production is in areas of medium to high risk of water stress, according to a 2018 CDP report. Chevron is the largest private oil producer in Kazakhstan, a country dealing with severe water scarcity, and the company uses millions of gallons of freshwater. Earlier this year, Chevron faced fines for violating hazardous waste water management regulations in a Hawaiian refinery. Chevron’s Salt Lake refinery exceeded the Clean Water Act pollution limit five times between 2016 and 2017, which resulted in contaminated water being fed to the Great Salt Lake. Chevron’s shale gas explorations were shut down in 2015 by Romanian and Polish community members.
A shareholder resolution was filed at Chevron requesting that the oil company produce a report on its process for identifying and address water risks. The resolution requests that the report include an outline the impacts of Chevron’s business on water resources, and “address Chevron’s plans to track effectiveness of measures to assess, prevent, mitigate, and remedy adverse impacts on the human right to water.”
Image credit: Simon Fraser University, courtesy Flickr