We have three branches of government in New York, but the Executive Branch, in addition to New York’s many departments and agencies, also has an independent Comptroller’s Office that does not take orders from the Governor. So, in some sense, the Comptroller’s Office can set some policy in just a few limited areas. One of those areas is the investment of the state’s retirement funds.
Comptroller Tom DiNapoli has used New York State Retirement Fund investments clout to bring shareholders together to hold a natural gas company responsible for the environmental and social consequences of hydrofracking. His office’s press release follows.
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June 06, 2011
DiNapoli Fracking Proposal Gets Strong Investor Support
Risk Disclosure Resolution Garners Solid Vote From Carrizo Shareholders
New York State Comptroller Thomas P. DiNapoli’s shareholder resolution seeking greater disclosure of the risks associated with hydraulic fracturing (‘fracking’) garnered support from investors at Carrizo Oil’s annual meeting last week. The resolution received 43.7 percent of the vote, according to a company filing released today. DiNapoli filed the resolution as trustee of the $140.6 billion New York State Common Retirement Fund (Fund), which owns 324,994 Carrizo shares worth an estimated $11.1 million.
“We’ve seen what happens when companies sacrifice safety for short-term profits,” DiNapoli said. “This vote was a call for safer, sustainable earnings from our investments. Natural gas is a crucial part of the nation’s energy supply, but it has to be extracted the right way.”
“Hydraulic fracturing can potentially poison local water supplies, pollute the air and leave us with a waste management nightmare. Shareholders and the public need to be assured that Carrizo and other companies fully appreciate the regulatory, legal, environmental and reputational risks at stake. We can’t have a repeat of the BP disaster in New York.”
DiNapoli has requested reports on the potential consequences of fracking from seven companies: Chesapeake Energy Corp., SM Energy, XTO Energy Inc., Range Resources Corp., Hess Corp., and Cabot Oil & Gas Corp. Four firms—SM Energy, Range, Hess and Cabot—have agreed to provide disclosures on the potential consequences of drilling activities in response to DiNapoli’s requests. These agreements do not relieve the company of their legal or regulatory duties. The Fund has also voted in favor of disclosure resolutions filed by other investors at Chevron, ExxonMobil, Ultra Petroleum and Energen Corporation.
New York’s Department of Environmental Conservation is expected to release new gas drilling rules next month.