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Shale Gas and Hydraulic Fracturing in the US: Opportunity or Underestimated Risk?

Shale gas presents a huge new potential investment opportunity and could possibly transform the US energy market. However, financial returns from shale gas face pressure due to emerging environmental liabilities, community opposition that limits access to resources, recoverable reserves uncertainties, and natural gas price volatility.

Based on MSCI ESG Research’s assessment of companies’ performance on environmental issues, we believe that companies with poor historical performance such as Cabot Oil and Gas, BP, and Chesapeake Energy are more likely to face community opposition and permitting issues, possibly hindering long term growth potentials.