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As most people already know, US President Elect Donald Trump has proposed ExxonMobil’s CEO, Rex Tillerson, as Secretary of State.
Tillerson Testimony May 12, 2011 C-Span
May 12, 2011: Reading testimony out of the side of his mouth in a sleep-inducing Texas twang, US Secretary of State Nominee-Exxon CEO Tillerson. It takes talent to make a twang sleep-inducing. Is the hidden agenda to make enemies fall asleep or die of boredom? https://www.c-span.org/video/?299469-1/gas-prices-energy-policy&start=2866

In ExxonMobil’s Notice of 2016 Annual Meeting and Proxy Statement, April 13, 2016, as submitted to the US SEC (Securities and Exchange Commission). Based on the example given below it seems that ExxonMobil may be using small subsidiaries for its fracking activities in order to reduce future liabilities. The subsidiary probably can easily go bankrupt and pass liability to the taxpayer.

This proposal was submitted by the Park Foundation, P.O. Box 550, Ithaca, NY 14851, the beneficial owner of 117 shares.

Extracting oil and gas from shale formations using hydraulic fracturing and horizontal drilling technology has become a controversial public issue. Leaks, spills, explosions and community impacts have led to bans and moratoria in New York State and elsewhere in the U.S., putting the industry’s social license to operate at risk. Hydraulic fracturing has also become a topic of controversy in many locations across the world, including in Germany which has impacted ExxonMobil’s unconventional oil and gas development in the region.

Disclosure of management practices and their impacts is the primary means by which investors can assess how companies are managing the risks of their operations. The Department of Energy’s Shale Gas Production Subcommittee recommended 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.’

ExxonMobil has become a laggard in the oil and gas industry in its disclosure practices. In a 2015 report ‘Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations’, which ranked companies on disclosure of quantitative information to investors, Exxon scored only 4 out of 39 points for its disclosure practices. Two thirds of the companies reviewed earned higher scores for their disclosures.

Exxon’s subsidiary, XTO Energy, was cited for having 113 hydraulic fracturing environmental and health violations, from January 2011 to August 2014, in Pennsylvania alone (Environment America, Fracking Failures, 2015). These violations have increased shareholder concern about Exxon’s practices.

Due to Exxon’s poor disclosure performance, investors call for the Company to provide detailed, quantitative, comparable data about how it is managing the risks and reducing the impacts of its hydraulic fracturing extraction operations. Its Operations Integrity Management System fails to provide such reporting to investors; as a generalized framework for companywide operations, it provides no specific information on the company’s shale energy operations.


Shareholders request the Board of Directors report to shareholders, using quantitative indicators, by December 31, 2016, and annually thereafter, the results of company policies and practices above and beyond regulatory requirements, to minimize the adverse environmental and community impacts from the company’s hydraulic fracturing operations associated with shale formations. Such report should be prepared at reasonable cost, omitting confidential information.


Proponents suggest the report provide quantitative information for each play in which the company has substantial extraction operations, on issues including, at a minimum:

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

Quantitative reporting on methane leakage as a percentage of total production;

• Percentage of drilling residuals managed in closed loop systems;

• Numbers and categories of community complaints of alleged impacts, and their resolution;

Systematic post-drilling ground water assessment; and

• Practices for identifying and managing the hazards from naturally occurring radioactive materials.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Board believes the Company has provided a comprehensive and sufficient discussion of its policies and practices on risk management of unconventional resource development, including hydraulic fracturing. Additional quantitative reporting at the “play level” will not improve our risk management or community engagement efforts.

The Company details its risk management practices in several public documents in order to inform key stakeholders. In September 2014, ExxonMobil prepared the report, Unconventional Resources Development – Managing the Risks, which describes in detail how the Company assesses and manages risks associated with developing unconventional resources. This report is available at exxonmobil.com/hfreport. Further, the Company’s annual Corporate Citizenship Report also discusses risk management issues associated with unconventional resource development.

The Company continually engages with communities in which we operate regarding upcoming and ongoing operations. We learn of community concerns directly and address them in a timely and proactive manner.

Modern drilling technologies and adherence to appropriate safety protocols allow unconventional oil and gas resources to be developed in a manner that protects human health and the environment, and we are committed to environmentally responsible operations. Our Environment Policy and Operations Integrity Management System commit us to continuous efforts to improve environmental performance. The reports cited by the proposal including the Proponent’s report do not credibly represent the Company’s performance.
(Emphasis our own).