Shareholders can question 'fracking'

If you don't like natural gas companies drilling in your Pennsylvania backyard, you have shareholder democracy on your side.

In response to last week's column about investing in energy companies working the Marcellus Shale, it is only fair to inform readers about the possibility of voting on drilling matters - including the controversial technology known as "hydraulic fracturing" - via shares you might own in the energy companies.

April is proxy season, when investors who hold shares in public companies get a chance to vote on important issues, including executive compensation, the makeup of corporate boards, share buybacks, and the hot topic these days: environmental concerns. This spring, and every year, you the investor can vote on these issues by lodging your shares as a "yes" or "no" vote on things important to you.

If you want to vote against hydraulic fracturing with your shares, you will join a long line of investor activists such as Green Century Equity Fund in Boston; one of New York State's retirement funds, the NYS Common Fund; and one of the consistently loudest voices in environmental activism: the Sisters of St. Francis of Philadelphia, based in Aston. Yup, the nuns are in on the proxy-voting act.

How does it work? Take a look at what these shareholders in Chesapeake Energy did last year for a road map on how proxy votes work.

Those investors called for a vote, arguing that hydraulic fracturing, which injects a mix of water, chemicals, and particles underground to create fractures through which gas flows, could increase by 45 percent between 2007 and 2030, and that up to 80 percent of natural gas wells drilled this decade will employ hydraulic fracturing.

"Fracturing operations can have significant impacts on surrounding communities including the potential for increased incidents of toxic spills, water quantity and quality impacts, and air-quality degradation," the investors' resolution said, according to a Chesapeake Energy filing with the Securities and Exchange Commission. (Read it here.)

Anti-fracking shareholder activists contend that Ohio, Pennsylvania, and Colorado have documented cases of methane gas linked to fracking in drinking water and that there is little public disclosure of chemicals used. The companies, in turn, say they are already highly regulated. They also point out they create jobs and have been operating safely for about 60 years.