Organization: National Fuel Gas Company

Year: 2015

Description:

WHEREAS: The Department of Energy secretary's shale advisory panel recommended in 2011

that companies "adopt a more visible commitment to using quantitative measures as a means of

achieving best practice and demonstrating to the public that there is continuous improvement in

reducing the environmental impact of shale gas production."

A 2012 University of Texas study, reviewing hydraulic fracturing regulations in 16 states,

concluded that "regulatory gaps remain in many states, including the areas of well casing and

cementing, water withdrawal and usage, and waste storage and disposal." Local governments in

New York State and Pennsylvania, concerned about adequacy of state regulation, are defending

in litigation their right to impose controls beyond state regulations.

Seneca Resources Corporation, the exploration and production segment of National Fuel & Gas

Corp., states that it applies best practices in technology, safety and environmental stewardship,

yet proponents believe the company fails to disclose metrics and systematic policies necessary to

evaluate how the company is minimizing risks associated with water, waste, and toxic chemical

management. Absent quantitative reporting and objective metrics, shareholders cannot reliably

assess the effectiveness of company policies intended to mitigate the risks of company hydraulic

fracturing operations.

Investors require specific, detailed, and comparable information about how companies are

managing the challenges and opportunities created by operations that employ well stimulation

using hydraulic fracturing. The 2011 report, "Extracting the Facts: An Investor Guide to

Disclosing Risks from Hydraulic Fracturing Operations," outlines 12 management goals, best

management practices, and key performance indicators that would provide such information.

Publicly supported by a broad group of investors and various companies and environmental

organizations, the guide stresses the importance of companies reporting quantitatively on key

performance indicators.

RESOLVED: Shareholders request the Board of Directors to report to shareholders via

quantitative indicators by December 31, 2015, and annually thereafter, the results of company

policies and practices, above and beyond regulatory requirements, to minimize the potential

adverse impacts on ground and surface water from the company's hydraulic fracturing operations

associated with shale formations. Such reports should be prepared at reasonable cost, omitting

confidential information.

Suporting Statement

Proponents suggest that the reports include a breakdown by geographic region, such as each

shale play in which the company engages in substantial extraction operations, addressing at a

minimum:

• Systematic post-drilling groundwater quality assessments;

• Quantity of fresh water and recycled water used for shale operations by region, including

source;

• Percentage of wastewater stored in tanks, lined pits and unlined pits;

• Goals and quantitative reporting on progress to reduce toxicity of drilling fluids; and

• Measures to reduce emissions, such as the percentage of wells completed with reduced

emission ("green completion") methods.