Fracking a sizable concern for Chevron investors

Wed May 25, 2011 3:07pm EDT

* 41 pct back a report on risks of hydraulic fracturing

* Comments at annual meeting on other environmental issues

SAN RAMON, Calif. May 25 (Reuters) - Two-fifths of Chevron Corp (CVX.N) shareholders support greater disclosure about the risks of hydraulic fracturing following the company's big move into the "fracking" business through an acquisition last year.

About 41 percent backed a resolution calling for a report on the impact of fracking and options to reduce its environmental risks, according to the initial results of the shareholder vote announced at its annual meeting on Wednesday.

Fracking is used to extract natural gas or oil from shale rock by blasting in a mix of water, chemicals and sand. The practice has created serious concerns about water contamination among both politicians and people living near the wells.

Chevron, the second-largest U.S. oil company, became heavily involved in the huge Marcellus shale region centered on Pennsylvania through its purchase last year of Atlas Energy and a recent acreage deal with Chief Oil & Gas. [ID:nN04180588]

At the meeting at Chevron headquarters in San Ramon, California, speakers largely focused on other environmental topics, including an $18 billion judgment against the company in Ecuador that it is fighting in a U.S. court.[ID:nN25225194]

A Chevron spokesman said fracking is regulated well enough at the state level to not need federal oversight, and the company believes fracking can be done safely.

"We look forward to working with the rest of the industry to raise the standards in hydraulic fracturing in the Marcellus and elsewhere," said Kurt Glaubitz, a company spokesman focused on exploration and production.

Chevron also supports the publication of chemicals used in the process, and the company will make its first disclosure online by the end of June, he added. (Reporting by Braden Reddall, editing by Gerald E. McCormick)