Who Gets Hurt From Fed’s Weak Fracking Rules?

By: Carol Pierson Holding

 

Regulation can be a great reason to behave well, though industry rarely sees it that way.

 

Fire2

After five years of planning, 1.5 million comments, intense lobbying from the oil and gas industry, and innumerable photos of tap faucets on fire, the Bureau of Land Management has finally announced new regulations for fracking.

 

The promise of the rules is robust: we can continue to reduce carbon in the atmosphere, transition from coal to a cleaner burning fuel, and persist in drastically reducing our dependence on imported energy — while, thanks to the new rules, eliminating ground and water contamination from fracking. Industry is forced to behave well and thereby forestalls its most serious opposition.

 

The rules only cover Federal and tribal lands, representing just 11 percent of the natural gas the U.S. consumes, with the hope that operators on state and private lands will follow suit. But still, whatever the regulations do cover should be a satisfying start, shouldn’t it?

 

In fact, the rules satisfy no-one. News reports from both sides of the issue claim the regulations are deeply flawed. As reported in Huffington Post, environmental groups call it “toothless,” faulting the exceptions loophole and inspections that are delayed until 30 days after fracking wells are in place. A Harvard Law School study found that the reporting mechanism stipulated by the regulation called “FracFocus,” a chemicals tracking registry used voluntarily by Exxon Mobil and other drillers, fails as a fracking disclosure tool.

 

On the other side, the Wall Street Journal reports that that the industry was so outraged that it “filed a lawsuit to block the rules just minutes after they were announced.”

 

That lawsuit can’t be due to the expense of conforming to the new rules, but that’s their excuse. The government estimates the cost of the new safety procedures at $11,400, or less than 1 percent of the cost of drilling a well. Even so, Barry Russell who runs the Independent Petroleum Association, one of the groups suing over the new regulations, insists in the Journal that “At a time when the oil and natural-gas industry faces incredible cost uncertainties, these so-called baseline standards will threaten America’s economic upturn, while further deterring energy development on federal lands.”

 

It makes more sense that this most powerful industry would resist anyone telling them what to do.

 

So who is suffering most from the new fracking rules, environmentalists and the citizens they represent, or the oil and gas industry?

 

Should be an easy call. Fracking has been linked to dire health problems, smog, and water, landscape and wildlife devastation. Federal half-measures must be painful for everyone who lives within contamination range of a fracking operation.

 

But for the oil and gas industry, weak fracking regulations might end up being  detrimental too. Consider this: many localities are issuing fracking moratoriums and bans, from cities and counties across Texas, Ohio, California, and New Mexico to New York State, Pennsylvania and Hawaii. Nation-wide fracking bans are in place in countries including France, Germany and most recently Scotland.

 

Even with a U.S. ban on fracking only a distant possibility, couldn’t strong US regulations eventually prove fracking’s workability as a bridge to a greener future, ensuring it is protected from a ban?

 

That’s exactly what the sustainability community hoped would happen with new regulation. Many want to support natural gas to reduce atmospheric carbon, but they don’t like the risk associated with ground water contamination. Socially responsible investment managers such as Green Century and Sentinel are demanding companies that frack commit to insuring environmental safety and best practices. Tougher regulations could have gone much further in meeting these investor demands.

 

Likewise, Corporate Social Responsibility (CSR) sites that guide consumer and institutional behavior such as data aggregator CSRHub (sponsor of this blog) highlight “fracking” as a special issue tag, to identify the sixty one companies involved in fracking.

 

Weaker rules allow oil and gas companies that frack (and that’s 90 percent of new wells) to continue to contaminate public water and land, while stronger rules could have forced them to behave as good corporate citizens.  Fracking has allowed natural gas companies to become heroes in one sense, offering a cleaner-burning alternative to coal. Loose regulations imply a license to pollute. And that’s got to hurt everyone.

 

Photo courtesy of Steven Jurvetson via Flickr CC

 


Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council’s Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 10,000+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 13,736+ companies from 135 industries in 127 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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Big Oil Talks the Talk Then Pulls an End-Run on Carbon Pricing

By: Carol Pierson-Holding

 

Carpool lane

The Seattle Times ran an article whose headline was so unsurprising I almost didn’t read on: “Oil industry not buying Gov. Jay Inslee’s cap-and-trade plan.” No surprise right?

 

Big Oil’s actions tell us it not only wants to kill carbon pricing but still actively promotes climate-denial, a fact most recently reinforced by the cash-for-climate-denial scandal of Harvard-Smithsonian physicist Wei-Hock Soon, whose papers are the go-to reference for impugning climate change. Big Oil withdrew from direct supporting Soon and now funnels “donations” through Donors Trust charity, which in turn donates to climate denial organizations.

 

And hadn’t I just been sent a link to Biggreenradicals.com, a site funded by the DC-based Environmental Policy Alliance (which goes by the ultra-cynical acronym “EPA”)? Its stated function is to “educate the public about the real agenda of well-funded environmental activist groups” and its investigations point to the Kremlin as a major funder of the US EPA.

 

Russia funds the EPA to destabilize the U.S.? Really? Still, whatever “EPA” is spending on its whacky research is a pittance compared to $213 million the fossil fuel industry spent last year on lobbying and the $900 million a year given to organizational supporters of climate denial.

 

That Seattle Times headline seemed to be restating the obvious, that oil companies will always oppose carbon pricing. But the text of the article presents a totally different picture: “…(chief executive of Royal Dutch Shell) Ben van Beurden warned that the industry faces a credibility problem ‘if you undermine calls for an effective carbon price; and if you always descend into the ‘jobs versus environment’ argument in the public debate’.”

 

Shell is not the only oil giant to endorse carbon pricing — BP also says it favors a global carbon price, and that national or regional carbon policies are “a good first step.” The industry knows its coming. 73 countries including China and Russia have or are creating a form of carbon pricing, either carbon tax or cap and trade. A successful cap and trade system has been operating since 2008 across nine states in the northeastern U.S.

 

But here in Washington State, where the legislature is currently debating cap and trade legislation, the oil industry is opposing carbon pricing with everything its got.

 

It’s a brilliant play:

Big Oil CEOs say they support carbon pricing.

Washington’s governor proposes legislation would set a price on carbon emissions.

Big Oil refuses to negotiate.

 

The oil and gas sector has spent $415,000 in donations directly to legislative candidates. Couldn’t they have stalemated without the expensive price tag?

 

Sure, but they’ve got something else up their sleeve:

 

Last week, the GOP-controlled Senate passed a new $15-billion transportation plan that includes increases in the gas tax (nearly 12 cents phased in over three years) to pay for road infrastructure.

 

…But the Senate bill also contains a so-called ‘poison pill’ that cuts transit funding if the governor imposes stricter emission standards on fuels, vehicles or fuel distributors, or limits carbon emissions. That would be true for the life of the plan, or about 16 years.

 

How diabolically clever. Going flat out against any limit on emissions, much less cap and trade, would backfire in a pro-environment state like Washington, where 71% of the population supports the measure. With its Republican friends in the Senate, Big Oil devised a run-around that improves the odds that cap and trade will not become law and holds public transit ransom if anyone objects.

 

Improving Washington State’s roads could alleviate the terrible traffic jams in Western Washington’s cities. But they’d also make Washington State’s major polluters, private passenger cars, more attractive, and thereby assure that the switch from fossil fuels to renewables is extended. Carbon pricing seems inevitable, even to Big Oil, yet they’re using every trick to delay it, spending a bundle in this relatively tiny market to do so.

 

Thankfully, we’ve got a governor willing to throw his political clout behind it, and the support of environmentalists, labor unions, health organizations, low-income groups and native tribes. And shouldn’t that be enough?

 

Photo courtesy of Keith Tyler via Flickr CC


 

Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council’s Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 10,000+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 13,736+ companies from 135 industries in 127 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

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Review of Sustainability Reporting Status of RepRisk’s Most Controversial Companies

By Bahar Gidwani

 

For the past five years, RepRisk has produced a list of ten companies that were most exposed to environmental, social, and governance issues.  We thought it would be interesting to see how the companies on this year’s Most Controversial list perform in CSRHub’s sustainability metrics tracking system.

 

RepRisk is a business intelligence provider that specializes in environmental, social and governance (ESG) risk analytics and metrics. It uses a unique methodology that screens tens of thousands of public and third-party sources in 14 languages in order to identify, filter, analyze and quantify environmental, social and governance (ESG) risks for both listed and unlisted companies from all sectors and countries in the world.

 

Only three of the companies on this year’s Most Controversial list had ratings information in CSRHub’s system (from sources other than RepRisk).  This is a pretty remarkable result—CSRHub uses 371 sources to build its data set.  It lists 13,736 companies from 127 countries on its web site and has data on another 140,000 companies.  CSRHub recently conducted a study on the companies in 14 regional stock exchanges.  Of the 18,991 companies listed on these exchanges, CSRHub had data on 13,165 or 69%.

 

Most Controversial list-csrhub ratings2

 

 

Only two of the companies in the RepRisk list had enough data to get full CSRHub ratings. The top-level overview below shows that Takata has poor scores relative both to our entire coverage universe and to their industry and geographic peers while General Motors scores well.
Ranking Chart

 

We can’t draw conclusions from a sample of two companies—or ten.  The high score for General Motors is a product of many years of investment in its community and employees and well-designed programs for environmental management and governance.  The reputational challenges it faced came despite these investments and some were related to the company’s recent financial problems.

 

But, it is clear there is little information on the social performance of eight of the ten companies on this list.  These eight companies are not reporting sustainability metrics to outside groups and do not seem to be engaged with or responding to their stakeholders.  We believe this simple study supports our belief that companies who are transparent about their social policies and performance are less likely to have risky patterns of behavior.

 

 


 

Bahar GidwaniBahar Gidwani  has built and run large technology-based businesses for many years. Bahar holds a CFA, worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. Bahar has consulted to a number of major companies and currently serves on the board of several software and Web companies. He has an MBA from Harvard Business School and an undergraduate degree in physics and astronomy. Bahar is a member of the SASB Advisory Board. He plays bridge, races sailboats, and is based in New York City.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 13,736+ companies from 135 industries in 127 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

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Benchmark Your Sustainability Performance on New Enablon Wizness Publisher

CSRHub and Wizness Publisher

 

Today, we are announcing the release of the new CSRHub Benchmarking Template, available on the Enablon Wizness Publisher platform. Building on CSRHub’s partnership with Enablon, our teams have joined forces to imagine this new online tool which will enable you to:

 

  • Assess your own performance: Evaluate your Sustainability Performance using the CSRHub ratings methodology, covering the four categories of environment, employee, community and governance.
  • Benchmark your performance with your peers: Evaluate the Sustainability strategy of your competitors, identify the leaders and laggards of your industry and compare your ratings to theirs.
  • Identify your strengths and weaknesses: By comparing your own CSRHub ratings to industry peers of your choice, the benchmark helps you identify the Sustainability areas in which you excel, or need improvement.

 

Excited about discovering how well you perform? Start your own benchmark now!

 

Start My Benchmark

 

Wondering how it works? Enter your company name and up to 4 of your competitors and the Publisher will use the CSRHub data to generate an online and interactive benchmarking report like this one:

 

Benchmarking CSR_Wizness and CSRHub

 

 

If you have any questions about this new exciting tool, you can take a look at the FAQ or at the template tutorial when you click Start My Benchmark above. If you don’t find what you’re looking for, we’d love to hear from you!

 

 

About Wizness

Wizness is an online platform which enables companies to collect their Sustainability data, create their online Sustainability profile, design & publish interactive, mobile ready CSR reports, and engage in interactive conversations with their stakeholders. Through its services, Wizness enables organizations to reduce their reputational risks and communication costs as well as reinforce their brands.

 

Wizness is powered by Enablon, the world’s leading software provider of Sustainability, EH&S and Risk Management solutions.

 

For more info about Wizness, please visit https://publisher.wizness.com/

For more info about Enablon, please visit http://enablon.com/

 

About CSRHub 

CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information, covering on 13,700+ companies from 135 industries in 127 countries. By aggregating and normalizing the information from 370+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices, and seek ways to change the world.

 

CSRHub is a B Corporation, an Organizational Stakeholder (OS) with the Global Reporting Initiative (GRI), a silver partner with Carbon Disclosure Project (CDP), and an Advisory Council Member of Sustainability Accounting Standards Board (SASB).

 

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Utilities to Scale Electric Cars and Distributed Solar

By Carol Pierson Holding

 

Electric Vehicles (EVs) aren’t selling because retail charging has stalled and people areElectric vehicle (EV) charging station afraid of being stranded with no power source. According to the US Census, there are 121,000 gas stations in the U.S. and just 9,124 charging stations. Refueling takes minutes with gas vs. 30 minutes to hours to charge. According to Plugincars.com’s Ultimate Guide to Electric Car Charging Networks, most public chargers are free for now, but those that are not free require subscriptions to be set up in advance; using regular credit cards for a single charge is possible but complicated. The West Coast’s ballyhooed “Electric Highway” is made up of six different charger providers, each requiring a different subscription and another card for your wallet. Some chargers don’t fit every vehicle (!) and customer service can be terrible.

 

It’s just too early. Not surprising, most adventuresome new car buyers are skipping electric cars for now and buying another gas-powered vehicle to tide them over until the problems of range and public charging are solved.

 

Clearly, the EV charging market requires standards. Despite utilities being widely reviled for high rates, they are trusted to distribute power and maintain the electric grid to fairly high standards.

 

Electric utilities’ reputation for providing overall reliability and consistency is well suited to win the confidence of potential EV drivers.

 

That may be why utilities in Kansas City, Missouri, Madison, Wisconsin and in cities across California and Texas are investing in charging stations. Existing charging companies, in addition to offering competing systems at the expense of consumers, have failed to proliferate the stations fast enough.  As a result, Public Utility Commissions have begun to open the charging market to electric utilities. Forbes described why regulators are allowing these giants into the market:

 (California’s Pacific Gas and Electric) designed the (EV charger) project to help the state achieve its mandate to reduce its emissions by 80% below the 1990s levels by 2050. …To achieve that, Gov. Brown issued an executive order in 2012 that calls for putting 1.5 million zero-emissions cars on the road by 2025.

 

Why should utilities take on EV charging at all, a tough retail distribution business that EV owners expect to be free? Shouldn’t the utilities be paying more attention to their core business, endangered by distributed solar energy provided by roof top solar panels? A 2013 report from Edison Electric Institute, the trade group for publicly-owned electric companies, warned about the disruption about to hit these utilities.

 

Not only will utilities lose about 10% of their customers to roof top solar by 2020, but that loss would require increasing charges for remaining customers by about 20%, making solar panels even more attractive by comparison. Utilities have been fighting “tooth and nail” to keep solar installers out, including shutting down access to the grid, adding grid fees, and lobbying to regulate and tax solar alternatives out of the market. As it turned out, that strategy has kept the market open until they were allowed to enter.

 

For example, NRG’s CEO David Crane announced plans to participate in the charging market a year ago, stating that his company would straddle both models just as telephone companies straddled landline and cellular for twenty years before cellular became dominant. And the market in its home state of Texas is ready and waiting.

 

Was it the boldness of their plans to move into charging stations that gave utilities the moxy to start installing their own distributed solar power? What caused utilities to act outside their staid character, whose normal instinct is to shut down innovation that threatens the status quo?

 

The fact is, utilities are not only innovating but changing their core business model to accommodate the cheaper and more ubiquitous solar power source, one already visible across middle class neighborhoods, and one that might just save the electric companies from extinction. It feels like it all happened overnight, that our most conservative institutions have become bet-the-business proponents of green technology. Who knew?

 

 

Photo courtesy of avda-foto via Flickr cc.

 


 

Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council’s Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 13,700+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 13,700+ companies from 135 industries in 127 countries. By aggregating and normalizing the information from 371 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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