Disclosure of Fracing Fluid Ingredients

One of the biggest issues related to hydraulic fracturing is the disclosure of the chemicals used in the fracing fluid. Fracing fluid is a chemical mixture used in drilling operations in order to increase the quantity of hydrocarbons that can be extracted.[1] Additionally, the fluid lubricates the extraction process, prevents corrosion of the well, and prevents clogs and bacterial growth.[2] The hydraulic fracturing fluid is typically a mixture of water, proppants, and numerous addatives.[3] Many companies engaged in hydraulic fracturing have spent large sums of money in order to formulate a hydraulic fracing fluid that will yield the best recovery.[4]

 

Traditionally, the companies that perform hydraulic fracing have kept the composition of the fracing fluid confidential in order to preserve any competitive advantage they might have obtained over their rivals by developing a better mix.[5] Non-disclosure of the identity and quantity of these chemical formulations has raised environmental complaints about fracing to a fever pitch.[6] The issue of non-disclosure has prompted a number of states to pass mandatory disclosure regulations that require the contractor or operator to notify state authorities of the chemicals being used, and that fracing will be taking place.[7]

 

In August of 2010, Wyoming became the first state to enact regulations requiring the mandatory disclosure of hydraulic fracturing fluid composition.[8] In 2013, a Wyoming court decided a significant case regarding the disclosure of fracing fluid ingredients.[9] In Powder River Basin Res. Council v. Wyo. Oil & Gas Conservation Comm’n, the Court held that Wyoming operators must disclose all substances contained in fracing fluids to the Wyoming Oil and Gas Conservation Commission.[10] This disclosure includes any substances whose identity the operator claims is a trade secret.[11] The ruling required the disclosure of such information be made available to the public.[12]

 

Yet, prior to disclosing to the public, the commission will evaluate any claims by operators that the information constitutes a trade secret.[13] “If the Commission agrees that the identity of a particular substance qualifies as a trade secret, the Commission will not include the identity of that substance in the information made available to the public.”[14]

The trade secret caveat from Powder River Basin Res. Council, essentially allowed companies to skirt the disclosure requirement if they claimed that the chemicals were confidential business information.[15] This exemption created a massive loophole.[16] This loophole made it nearly impossible for landowners to know what chemicals were leaking into their land.[17] Landowners were unable to perform a blanket test for all chemicals.[18] Therefore, in order to be effective, the tests had to be primed for a specific chemical.[19]

 

Yet, as of January 2015, companies will now have to show more in order to justify keeping fracing chemicals secret.[20] This change is the result of a 2012 lawsuit that environmental nonprofit Earthjustice filed on behalf of public interest groups against the Wyoming Oil and Gas Conservation Commission.[21] The court essentially interpreted trade secrets under the states Public Records Act, which puts the public’s rights to know before a company’s protection.[22] This change requires substantially greater factual support for oil and gas industry claims that the identities of fracing chemicals used in Wyoming qualify confidential commercial information or trade secrets.[23]

After Wyoming’s intital regulations requiring disclosure of fracing fluid ingredients, many other states followed.[24] The states most notably included: Texas, Arkansas, Colorado, Idaho, Illinois, Louisiana, Indiana, Michigan, Mississippi, Montana, New Mexico, Ohio, Oklahoma, North Dakota, South Dakota, West Virginia, and Utah.[25] “Collectively, these states are hosts to a large majority of the oil and gas activity in the United States.”[26]

 

In the wake of public upheaval surrounding disclosure of fracing fluids, a few companies aired on the side of transparency by disclosing the composition of their fracing fluid on their company websites.[27] Eventually, the Interstate Oil Gas Compact Commission and the Ground Water Protection Council jointly launched FracFocus.[28] FracFocus is centralized website which was created to be a location where companies could voluntarily disclose the composition of fracturing fluid used anywhere in the United States on a well-by-well basis.” [29]

 

FracFocus provides public access to chemicals used for hydraulic fracturing in specific areas.[30] In order to help the public put the information into perspective, the cite provides a list of the chemicals used, the purposes the chemicals serve, various objective information on hydraulic fracturing, and the means by which groundwater is protected.[31] As of February 26, 2017, there are twenty-three different states registered on FracFocus.[32] This includes a total of 117,600 registered wells.[33]

 

It should be noted that the FracFocus website is not intended to argue for or against the use of hydraulic fracing as a technology.[34] FracFocus is simply intended to provide factual information concerning hydraulic fracturing and ground water protection.[35]

 

Since the inception of FracFocus, many voluntary disclosures have been superseded by mandatory state disclosure regulations.[36] Yet, FracFocus has remained relevant given the fact that numerous states have enacted mandatory disclosure regulations that specify that companies should make their disclosure by posting the information to FracFocus.[37]

 

In sum, state regulations on fracing fluid disclosure and websites like FracFocus have recently been a hot topic in the world of hydraulic fracturing. Both of these topics have played a key role in trying to strike a balance between the objectives of the oil and gas industry and increasing environmental concerns.


[1] What is fracking fluid?, Fractracker Alliance, https://www.fractracker.org/resources/oil-and-gas-101/fracking-fluid /. (last visited Feb. 24, 2017).

[2] Id.

[3] Keith B. Hall, Recent Developments in Hydraulic Fracturing Regulation and Litigation, 29 J. Land Use & Envtl. L. 29, 36 (2013).

[4] Id.

[5] Christopher S. Kulander, Shale Oil and Gas State Regulatory Issues and Trends, 63 Case W. Res. L. Rev. 1101, 1107 (2013).

[6] Id. at *1108.

[7] Id.

[8] Hall, supra, note 3, at *36.

[9] Id. at *38.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] See Sarah Tory, Fewer Trade Secrets for Wyoming Fracking Fluid, High Country News, http://www.hcn.org/articles/wyoming-win-fracking-fluids-transparency (last visited Feb. 24, 2017).

[16] Id.

[17] See id.

[18] Id.

[19] Id.

[20] Id.

[21] Id.

[22] Id.

[23] See Wyoming to Strengthen Fraking Chemical Disclosure in Response to Citizen Pressure, Earthjustice, http://earthjustice.org/news/press/2015/wyoming-to-strengthen-fracking-chemical-disclosure-in-response-to-citizen-pressure (last visited Feb. 26, 2017).

[24] Hall, supra, note 3, at *36.

[25] Id.

[26] Id.

[27] Hall, supra, note 3, at *39.

[28] Id.

[29] Id.

[30] FracFocus, https://fracfocus.org/welcome (last visited Feb. 26, 2017).

[31] Id.

[32] Id.

[33] Id.

[34] Id.

[35] Id.

[36] Hall, supra, note 3, at *40.

[37] Id.

About

Matt Mallett is a second-year law student at The University of Texas School of Law. He graduated from Texas State University in 2013, and will be a 2017 summer associate with Bracewell in Houston.