Texas legislation to require public disclosure of the contents of hydraulic fracturing (hydrofracking) fluid was awaiting the governor’s signature last Friday. Regulators in a handful of other states — Arkansas, Colorado, Wyoming and Michigan — require some form of disclosure, but Texas would be the first state to mandate public disclosure through legislation.

“This is mandatory, well by well,” state Rep. Jim Keffer (R-Eastland) told NGI. “We’ve taken it really several steps further, and I think in a positive direction.” The move by Texas comes as the U.S. Department of Energy (DOE) is examining hydrofracking.

Gov. Rick Perry’s office would not say Friday whether the governor intended to sign the bill (HB 3328), but observers have been expecting his approval. If the bill does become law, the Railroad Commission of Texas (RRC) would be tasked with developing rules for disclosure with a two-stage deadline.

“The Texas Oil and Gas Association [TXOGA] is proud that Texas is once again a national leader in crafting energy policy for the 21st century,” said Debbie Hastings, TXOGA vice president of environmental affairs. “As a result of the state’s leadership, Texas will become a game-changer when it comes to debunking myths or misconceptions about hydraulic fracturing. The transparency and accessibility achieved by this legislation will reinforce how and why hydraulic fracturing has been safely used for more than 60 years.”

The bill ultimately would require full public disclosure of the chemical composition of fracking fluids on a well-by-well basis and seeks to establish a model for other states to follow, Keffer said. It also protects confidential business information while still disclosing the information needed for research, regulatory investigations and medical treatment.

“My hope is that this bill takes some of the mystery out of the fracturing process,” Keffer said. “The oil and gas industry is vital to our economy, and the use of this technology is an important tool to increase domestic energy production. I believe the industry can coexist with the people of Texas, and this bill strikes a balance between creating a sustainable market for business and ensuring the health and safety of the public.”

The legislation provides operators with the ability to challenge disclosure if they feel that certain contents of the fluid they use constitute a trade secret. Disclosure would be made on the existing Frac Focus Chemical Disclosure Registry website.

The registry is a joint project of the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission and was designed for operators to report chemical ingredients listed on the federal Material Safety Data Sheet (MSDS). The MSDS is a document kept at work sites to aid in response to emergencies such as spills.

Under HB 3328, all chemicals intentionally used in fracking (whether listed on MSDS or not) must be reported and publicly disclosed — eventually. The RRC would be tasked with adopting rules for disclosure of MSDS chemicals by July 1, 2012. Rules for disclosure of non-MSDS chemicals would need to be developed by July 1, 2013. If the RRC can work faster, rules can be implemented sooner.

State Sen. Troy Fraser (R-Horseshoe Bay) successfully sought a later deadline for rules to govern disclosure of non-MSDS chemicals, which are more likely to be trade secrets.

“The Railroad Commission in Texas is breaking new ground,” Fraser told NGI. “They’ve never had to work with proprietary information and protecting trade secrets. The MSDS…I think that’s pretty straightforward that they’re going to disclose that unless it’s a trade secret…That’s really what the public was wanting to know about, the things that can hurt you.

“But the non-MSDS, which is basically what I refer to as the ‘secret sauce’…In a lot of cases it’s things like pecan hulls and sawdust, marbles and golf balls, things that are not carcinogenic…But it could prove to be a very clear trade secret that someone’s trying to protect. I want to make sure that we get it right and they have enough time to implement [the rule].”

Separately, a Senate floor amendment to HB 3328 by Fraser sought to attach SB 655, which was the bill to implement some of the changes proposed for the RRC by the Sunset Review Commission, such as a new name. However, the House and Senate still could not agree on whether the RRC should retain three commissioners or be reconfigured to one (see NGI, April 18). The RRC will continue to operate as it has with its same name until lawmakers potentially take up the issue during the 2013 session.

Some of the changes that were sought by lawmakers for the RRC were in response to commissioners allegedly using the post as a stepping stone to higher office. RRC Chair Elizabeth Ames Jones is currently running for U.S. Senate as a Republican, for instance.

Last week Jones was among those attending a DOE meeting in Washington, DC, where she urged federal regulators to stay out of the regulation of hydrofracking. Last month DOE formed a group to study hydrofracking (see NGI, May 9). Jones said the RRC would be getting to work right away to craft rules for hydrofracking fluid disclosure assuming the bill is signed by the governor.

“A common sense frack fluid disclosure policy will balance the Railroad Commission’s dual mission to prevent the waste of Texas’ energy resources, and to protect the environment and the public’s health and safety. The policy will be built on the sound foundation that the Railroad Commission has already laid through our staff’s active leadership in the crafting of Frac Focus, a disclosure website.

“I expect any rule to formalize best practices while protecting proprietary information. As more foreign companies are investing in businesses that drill here in Texas, and more wells are produced using hydraulic fracturing, it is important that our public disclosure rule does not undermine a frack company’s intellectual property and trade secrets.”

Commissioner David Porter said he wants the RRC to complete the entire rulemaking process for all chemicals by the 2012 deadline. “In order for Texans to maintain confidence in the oil and gas industry, it is important for us to get this done as quickly as possible,” he said.

“Hydraulic fracturing has been an economic driver for Texas, creating hundreds of thousands of jobs and adding billions of dollars to local economies. We are currently seeing record activity in the Eagle Ford Shale due to hydraulic fracturing, which is why I am creating a task force to study these very issues [see NGI, April 18]. We need to assure the public that hydraulic fracturing is safe and responsible — and has been for the past sixty years — and we need to do it now.”

Michigan is the most recent state to institute fracking rules at the regulatory level. Regulators in Montana are seeking input on proposed rules.

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