Colorado oil and gas regulators impose new hydraulic fracturing chemical disclosure rule

The Colorado Oil and Gas Conservation Commission (COGCC) today unanimously approved a new rule requiring oil and gas companies to fully disclose the chemicals used in the controversial but commonplace drilling process known as hydraulic fracturing, or fracking.

A natural gas rig at the entrance to Battlement Mesa in Garfield County on Colorado's Western Slope (David O. Williams photo).
Some environmental groups and attorneys involved in the negotiations said Colorado’s conservation community did not get everything it wanted in the new rule but did come away with a much better set of regulations than was originally proposed by the state.

“This rule is the product of some pretty intense negotiations among all parties,” Earthjustice attorney Mike Freeman said. “No one got everything they wanted in this rule, but overall we think the rule is an important step forward for Colorado.”

The Western Colorado Congress (WCC) late last week urged the COGCC to hold off on finalizing the new disclosure rule if it didn’t include pre-disclosure of chemicals before a frack job, which involves the high-pressure injection of mostly water, sand and a small percentage of often undisclosed chemicals into oil and gas wells to free up more hydrocarbons.

The new rule does require companies to notify landowners before a frack job so they can conduct baseline water testing. However, companies won’t have to disclose the chemicals used in the frack job until 60 days after it’s completed. But while environmentalists didn’t get pre-disclosure, the new rule does require the disclosure of all chemicals and the concentrations being used.

“The rule requires the disclosure of all chemicals and the concentration of all chemicals, not just those that are required to be disclosed under workplace safety rules,” Freeman said, so landowners will be able to conduct pre-frack baseline testing and then up to 60 days later compare those results to the full range of chemicals and the concentrations used in the frack job.

“I’m not aware of any other state with a disclosure rule that requires that level of information to be provided,” Freeman added. “The issues WCC raised are valid ones and I respect the reasons why they are proposing them. We ultimately decided that the benefits from this rule were important enough to support the rule even if it didn’t have every element that the environmental community would want.”

Asked by one of the commissioners to justify the 60-day disclosure window, COGCC director David Neslin said that FracFocus — the website run by the Groundwater Protection Council and the Interstate Oil and Gas Commission that will be used for Colorado’s chemical disclosure – mostly only includes disclosure of hazardous chemicals listed on Material Safety Data Sheets (MSDS). That’s less than half of all the chemicals used in the fracking process.

“We’re extending this now to all of the chemicals;” Neslin said of what will be listed for Colorado on FracFocus starting in April. “We’re essentially doubling, if you will, the number of chemicals that are going to have to be addressed, and we’re including not just the identity of the chemical but the concentration as well.”

Disclosure of such a comprehensive list of chemicals will take time, he added.

“So we wanted to ensure that there would be sufficient time, that these new disclosure requirements can be effectively implemented,” Neslin said. “The timing is an issue that we may be able to revisit in a year or two as companies get experience with this expanded disclosure regime.”

Another bone of contention for environmental groups was the so-called trade-secret loophole that allows companies to apply for disclosure exemptions for proprietary reasons. Freeman says that under the final rule a reasonable compromise was reached.

“We didn’t get everything we wanted in the way of safeguards on trade-secret claims, but the final rule provides much more substantial safeguards than what was in the draft rule,” Freeman said. “Companies are going to have to submit this Form 41 and sign it under oath, providing some facts justifying their trade-secret claim. And it also provides language describing how members of the public can challenge a trade secret claim if they should choose to do so.”

The forms will be subject to Colorado Open Records Act requests, and members of the public can file a lawsuit if they are not satisfied with the response from the COGCC or the information provided by oil and gas companies.

Finally, the WCC was concerned that the information available on FracFocus will not be readily searchable by the public based on types of chemicals or the location and date of a frack job. Under the new rule, FracFocus has a year to rectify that situation.

WCC officials did not immediately return calls requesting comment on today’s decision.

Industry representatives were pleased with today’s decision.

“I do want to affirm that the Colorado Oil and Gas Association and its members support the rule,” Tisha Schuller of the Colorado Oil and Gas Association told the commissioners. “The rule that just passed is something that you can be proud of. I’m confident that Colorado can be proud of, and I too look forward to an engagement that now has a new model to follow.”