State’s draft fracking disclosure rule skewered for ‘trade secret loophole’

A Boulder-based conservation group is pushing for much stronger language in a draft rule by the state of Colorado requiring oil and gas companies to disclose chemicals used in the controversial drilling practice called hydraulic fracturing, or fracking.

Western Resource Advocates (WRA) officials said on Wednesday that the new rule contains “a significant loophole” that would allow companies to withhold information by claiming an exemption for chemicals they consider trade secrets.

A natural gas rig at the entrance to Battlement Mesa in Garfield County on Colorado's Western Slope (David O. Williams photo).

The first public hearing on the new state disclosure rule being crafted by the Colorado Oil and Gas Conservation Commission – the state regulatory board with ultimate drilling oversight authority – is scheduled for Dec. 5 in Denver.

“We need to make sure that companies can’t just say, ‘Hey, that’s a trade secret — end of discussion,’” said Mike Chiropolos, lands program director for Western Resource Advocates. “’Trade secret’ can’t just be an answer on a form. Knowing what might get in our water is too important to the health and safety of Colorado residents.”

Fracking frees up more oil and gas by injecting millions of gallons of water, mixed with sand and often undisclosed chemicals, into natural gas and oil wells to fracture rock and tight sand formations. Critics of the process claim it can lead to groundwater contamination, but fracking proponents say it’s safe and that chemical formulas need to remain secret for proprietary reasons.

Under the “Hydraulic Fracturing Disclosure Rulemaking” link on the COGCC website, the process for filing for a trade secret exemption is outlined:

“If a chemical is entitled to trade secret protection, then the operator must still provide information on its chemical family and purpose. The supplier, service company, or operator, as applicable, must also provide the identity of a trade secret chemical to a health professional that satisfies certain conditions (immediate disclosure is required in medical emergencies).”

The COGCC outlines other safeguards:

“Prior to or at the time of claiming that a chemical or concentration is a trade secret, the vendor, service provider or operator must file with the commission a Registration for Oil and Gas Operations, Form 1, containing the claimant’s name, authorized representative, mailing address, and phone number. This is intended to assist the commission and health professionals in promptly obtaining trade secret information where appropriate.”

But Chiropolos argues the state can and should do better for all parties involved, including local residents in drilling areas.

“As drilling operations are expanding to more densely-populated areas along the Front Range, Colorado’s protections should go as far as possible towards full disclosure,” he said. “Existing disclosure provisions are among the weakest in the nation. Colorado can do better.”

Gov. John Hickenlooper, a former industry geologist, launched the disclosure rulemaking process last summer at the annual Colorado Oil and Gas Association (COGA) conference in Denver despite his assertion that fracking doesn’t taint drinking water.

A recently released independent review of Colorado’s fracking regulations found that the state could do more when it comes to assessing the availability of scarce water resources for drilling operations. But WRA criticized that review for ignoring the pending disclosure rulemaking and the still-contentious issue of setbacks between drilling rigs and private homes and public buildings.

Citizen activist groups are becoming much more involved along Colorado’s northern Front Range as drilling increases in the Niobrara Shale Formation. Such groups around the state are expressing growing concern over the perceived lack of oversight by state and local officials.

COGA President and CEO Tisha Schuller says the industry can no longer fall back on its stance that a necessary and largely safely produced resource is being unfairly targeted by environmental extremists.

“The ‘environmental extremist’ argument fails in the face of mothers and fathers, mainstream citizens, and conservative neighbors questioning the safety of drilling,” Schuller wrote in a recent blog. “The debate has moved to new turf and we must adapt.”

Groups hoping for party status in the rulemaking must apply to the COGCC by Nov. 17. Nov. 23 is the deadline for public submission of written documents, pre-hearing statements and alternative proposals. The COGCC hopes to have a final rule in place by the end of the year, with disclosure beginning Feb. 1 of next year.

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About the Author

David O. Williams

is an award-winning reporter who has covered energy, environmental and political issues for years. His work has appeared in the New York Times, Chicago Tribune and Denver Post. He's founder of Real Vail
and Real Aspen.

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