Anadarko, EOG Strike Deal With New York AG on Fracking

Anadarko Petroleum Corp. and EOG Resources Inc. agreed to disclose to investors the financial and environmental risks of fracking under an accord with New York Attorney General Eric Schneiderman, as the state contemplates lifting a moratorium on gas drilling.

The companies will provide publicly accessible information about the regulation and litigation risks on their operations, Schneiderman said in a statement today. The companies will release the information in filings with the U.S. Securities & Exchange Commission.

“Investors and the public have a right to know all relevant information,” Schneiderman said. “These companies are setting a strong example for the rest of their industry.”

The agreement comes as the energy industry looks for ways to ease public fears about fracking after legal setbacks and concerns over water pollution. With the U.S. poised to surge past Saudi Arabia as the world’s largest supplier of oil in 2015, some states are now tightening drilling regulations.

“We appreciate the AG’s cooperation in reaching a constructive resolution, one that will benefit all of our stakeholders,” John Christiansen, a spokesman for Anadarko, said in a phone call.

The agreement “affirms EOG’s commitment to transparency,” K Leonard, an EOG spokeswoman, said in an e-mailed statement.

Nick Benson, a spokesman for Schneiderman, declined to comment on whether the office may be working on similar deals with other companies.

Marcellus Shale

Fracking, which has helped set records for natural gas production, involves a technique that shoots a watery mix of sand and chemicals underground to release gas and oil trapped in shale rock. Parts of New York sit above the Marcellus Shale, a rock formation estimated to hold enough natural gas to meet U.S. demand for almost six years.

The agreement ends a probe Schneiderman began in 2011 regarding the disclosure practices of oil and gas drillers. That same year, Schneiderman sued the U.S. Environmental Protection Agency and other federal agencies to force a full review of the impact natural gas development could have on the state’s water supply.

A federal judge in Brooklyn, New York, tossed the suit in September 2012 finding that development plans were only in early stages and that the threat of harm was speculative.

As part of the deal with Schneiderman, Anadarko and EOG will disclose information and analyses about the effects of fracking on drinking water aquifers, as well as those arising from chemical use and handling, the attorney general said.

List Risks

The companies will list risks posed by probable future regulation and legislation, including moratoriums and local bans, and provide details of strategies for managing those impacts, according to the statement. The information will be available in SEC filings, annual shareholder reports, environmental and safety reports and on company websites.

Both Anadarko and EOG have fracking operations in Pennsylvania’s portion of the Marcellus Shale, according to Schneiderman. The geographic formation includes the Delaware River Basin, which supplies drinking water to four states including New York.

New York’s high court ruled in June that the state’s cities and towns can block hydraulic fracturing within their borders, dealing a blow to an industry awaiting Governor Andrew Cuomo’s decision on whether to lift a six-year-old statewide moratorium.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE