The recent controversial massive gas leak in California that forced the evacuation of thousands of residents is apparently having a spillover effect on one Oklahoma City oil and gas company. After increasing its stake to more than $3 million in shares of Continental Resources, Inc. the California State Teachers Retirement System now wants the Oklahoma City-based energy company to issue a report on how the company is monitoring and managing the level of methane emissions from its operations.
In a filing made Tuesday with the Securities and Exchange Commission, Brian Rice, Portfolio Manager of CALSTRS filed a shareholder resolution asking for the disclosure of the company’s methane emissions monitoring, stating that methane emissions pose a variety of natural risks and that Continental Resources “shows evidence of a lack of robust risk management around environmental issues.”
His supportive material pointed to substantial reputation risk connected with operations that emit methane.
“A prime example comes from SoCalGas, the subsidiary of Sempra Energy responsible for the unprecedented recent methane leak in California,” stated Rice. “Since Continental Resources does not currently disclose any oversight mechanisms or structures (as this proposal would request it to do), it is impossible to know the extent of these sorts of governance risks that may be facing Continental’s shareholders.”
Rice is obviously concerned about environmental risks involving CALSTRS massive investments in Continental Resources, as he pointed out how the company, in his opinion, is not doing well in the area of environmental issues.
“From 2006 through late 2014, Continental Resources reported 958 environmental incidents involving over 1.5 million gallons of spilled fluids, more than any other oil company drilling in North Dakota. Continental has been subject to numerous lawsuits, including a suit for wasting natural gas and another for violating the Migratory Bird Treaty Act.”
He said the company has also been cited for violating the Clean Air Act of Montana, the Environmental Quality Act of Wyoming, the Clean Water Act and for polluting North Dakota state waters and failing to clean up those spills quickly.
In February, the Teachers Retirement System increased its shares in Continental Resources by 1.5 percent during the fourth quarter. CALSTRS owned 162,190 shares of the company’s stock after buying another 2,402 shares in the period and the holdings were worth $3,727,000 at the time.
The annual shareholders meeting of Continental Resources will be held May 18 at 10 a.m.
