Texas has been the heart of the U.S. oil and gas industry for decades.
On Friday, June 17, Governor Rick Perry signed a bill that mandates public disclosure of the chemicals that operators use during hydraulic fracturing in the state of Texas. With this legislation, Texas joins a growing list of states, including Montana, Arkansas, Michigan, and Wyoming, that have passed or are discussing legislation requiring the disclosure of the contents of hydraulic fracturing fluids.
The bill, H.B. 3328, will require operators to report the total volume of water as well as the chemical ingredients used for each hydraulic fracturing job through the website FracFocus.org. This website, jointly administered by the Ground Water Protection Council and the Inter-State Oil and Gas Compact Commission, was launched in late 2010, and participating companies have begun to voluntarily post records of wells fractured after January 1, 2011. Texas’s new law will require operators to post their well reports on the website beginning in July 2012, with the reporting of additional chemicals not included on the website’s form (which only includes chemicals regulated by the Occupational Safety and Health Administration, as reported on Materials Safety Data Sheets [MSDS]) to begin in July 2013.
Under H.B. 3328, operators will be able to withhold specific Chemical Abstract Service (CAS) Numbers and/or concentrations of chemicals that are considered trade secrets under the Occupational Safety and Health Administration’s provisions on MSD sheets. Because MSD sheets are already required by law to be posted at drilling sites, the new rules’ treatment of the chemicals not regulated by OSHA will determine the extent to which Texas’s disclosure law amounts to a measure that mainly makes information that is already publically available more publically accessible.
Although the details of Texas’s bill differ from those of other states’, it’s notable that many of the disclosure requirements have been passed in states that are generally considered to be friendly territory for oil and gas companies, and that the measures have been supported by many members of the industry. (Aubrey McClendon, CEO of Chesapeake Energy, has been quoted as saying “We’ve seen the light.”) While this may seem surprising given the industry’s opposition thus far to federal legislation requiring the full disclosure of the contents of fracturing fluids, the momentum for mandating disclosure derives at least in part from a desire on the part of state regulators and policy-makers to pre-empt federal regulation of hydraulic fracturing.
Regardless of whether one’s ultimate goal is state, federal, or a combination of jurisdictions over hydraulic fracturing, each new state’s rules on the disclosure of fracturing chemicals provides an additional reference point that can be used to guide new legislation, whether at the state or national level.
Many environmental organizations have welcomed the progress towards transparency that H.B. 3328 represents, but still argue that it does not set a high enough standard for other states to imitate. In a press release, the Environmental Defense Fund stated that it “must oppose adoption of the Texas legislation by other states or by the federal government because the measure has serious limitations. It does not even provide a simple, statewide list of what chemicals are used by who and in what quantities. The Railroad Commission can enforce the bill only if it can prove a chemical was used intentionally for a particular purpose. And it may be the middle of 2013 before the bill takes full effect – an absurdly long time for implementation.”
Worldwatch has argued that greater industry transparency is critical to building public understanding of hydraulic fracturing. Texas’s new law represents a meaningful step in that direction. Nonetheless, the national conversation about disclosure of the content of fracturing fluids is far from over. The thorny issue of the industry’s proprietary chemicals has yet to be fully resolved. Even the proposed FRAC Act, a bill that would mandate public disclosure of fracturing chemicals and constituents at the national level, explicitly does not give states or the EPA the authority to require “public disclosure of proprietary chemical formulas.”
In the meantime, however, it’s helpful to see some states and companies taking steps to make fracturing information more accessible. The documentation submitted to FracFocus.org has the potential to shed light not only on the types of chemicals used in each fracturing job, but also the amount of water, a critical issue for water-poor regions. Moreover, this information can be a critical resource for policy-makers and analysts outside the United States who are considering whether and under what terms to permit hydraulic fracturing. As Worldwatch has written, mandatory disclosure represents an important opportunity for the natural gas industry to show rather than tell the public what hydraulic fracturing entails and what environmental and public health risks it does and doesn’t pose.