CASPER, Wyo. — As Wyoming challenges new federal fracking rules on public lands, state regulators are quietly implementing a state requirement that petroleum companies justify keeping secret the ingredients in the chemical products they pump underground during hydraulic fracturing.
The state has approved six applications from companies seeking to keep their ingredients confidential under the terms of a settlement with environmental groups announced in January. The state’s top oil and gas regulator says he has rejected three to four applications due to a lack of information.
The environmental groups that challenged Wyoming’s disclosure policies say it is too early to tell if the state is effectively implementing the agreement, but note the groups are monitoring its progress closely.
“We are collecting a critical mass of implementations to evaluate how the settlement is working in a more comprehensive way,” Katherine O’Brien, an attorney for Earthjustice, told the Casper Star-Tribune.
The settlement prescribes a review process for any company seeking trade secret protections from the state. A trade secret is a legal designation that bars public disclosure of the ingredients or parts used to make a product.
Firms have argued that disclosing chemicals used in frack fluids would leave them at a competitive disadvantage, allowing competitors to use technology they had spent billions developing.
Despite early approvals keeping chemicals a secret, the decisions themselves provide a rare glimpse into the largely secretive world of fracking.
Halliburton Corp., in an recent application seeking confidentiality for a chemical used in a foaming agent, AQF-2, said it spent $1.4 billion over the last five years developing the technology to boost well production.
The company, which intervened on the state’s behalf in the lawsuit brought by environmental groups, estimated the chemical’s disclosure would cost it around $375 million.
Products like AQF-2 have been found to boost well production by roughly 25 percent when compared to fracking treatments used by competing companies, it said.
“It is a more logical process than it was before,” said Mark Watson, Wyoming oil and gas supervisor.
Companies previously provided a legal reason why a chemical qualified for confidential status. Under the new policy, firms explain the practical downside of a chemical’s disclosure, he said.
Some companies have declined to apply for renewed protections, Watson said, noting chemicals that were once a secret are now widely used in frack treatments across the industry.
Many companies applying for trade secret status today are seeking protections for chemicals that actually minimize environmental damage, he said.
For the most part, firms have provided ample information on their products and why they should not be disclosed, he said, though not all have complied.
“I rejected a couple because you could tell they didn’t take it seriously,” Watson said.
The applications were sent back to the companies with a request for more information, he said.
The roll out of the new policy comes as Wyoming and three other states mount a challenge to the U.S. Bureau of Land Management’s new rules governing fracking on federal land.
The states argue BLM has exceeded its authority in attempting to regulate fracking, which they argue is the purview of the U.S. Environmental Protection Agency.
A consortium of energy interests have filed a separate challenge to the BLM rule, arguing the federal government lacked the justification to implement the regulations.
The challenges to BLM’s rule are not related to the Wyoming suit, and there are notable differences between the cases. For one, Wyoming is suing BLM over its new rules. In the disclosure case, the state was the defendant.
But implicit in the challenges to BLM’s rule is the argument states can effectively regulate fracking without the involvement of the federal government. And in that respect, implementation of Wyoming’s new disclosure policy could serve as a test.
Information from: Casper (Wyo.) Star-Tribune, http://www.trib.com
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