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NC Commission OKs Secrecy for Some Frack Chemicals

Operators in North Carolina -- should oil and gas drilling eventually be allowed in the state -- will not be required to disclose all of the chemical additives used in hydraulic fracturing (fracking), but they will be required to prove certain chemicals should be deemed trade secrets.

Last week the Mining and Energy Commission (MEC), a division of the state Department of Environment and Natural Resources (DENR), unanimously approved a rule governing fracking chemical disclosures. The rule is nonbinding and is strictly a recommendation to the General Assembly, which could decide to adopt its own rules over the practice.

"A lot of folks have heartburn because there are some states that do take possession of the trade secret," MEC Chairman James Womack told the News & Observer of Raleigh, NC. "We will have safe and responsible drilling in North Carolina."

Under the rule, operators are not required to "identify specific chemical ingredients and/or their CAS [Chemical Abstract Service] numbers that are claimed as entitled to trade secret protection based on the additive in which they are found or provide the concentration of such ingredients, unless the North Carolina Business Court determines that the information would not be entitled to trade secret protection under [state law]."

The rule also stipulates that operators will identify any chemical classified as a trade secret to any healthcare professional or emergency responder, should they request the information in writing and agree to a confidentiality agreement, also known as Form X3. The operator would be required to provide the information as soon as possible, but in no case later than two hours.

"The confidentiality agreement, Form X3, shall state that the health professional or emergency responder shall not use the information for purposes other than the health needs or emergency management coordination of response and recovery asserted in the statement of need, and that the health professional or emergency responder shall otherwise maintain the information as confidential," the rule said.

The MEC is scheduled to meet again on Jan. 31 to complete the rule on setback requirements, and discuss and complete a well siting rule on Feb. 18. The commission has a busy schedule on March 17, when it will discuss unitization, pooling and any remaining waste management rules, as well as discuss and complete a well stimulation rule. The unitization and pooling rules are scheduled to be completed on April 4, while rules governing production, reclamation and bonding are to be discussed on May 2.

North Carolina currently has a moratorium on horizontal drilling and fracking in the state, but legislators have passed a bill allowing both to be permitted beginning on March 1, 2015 (see Shale Daily, March 4, 2013). Last September, DENR returned more than $580,000 in grant money from the U.S. Environmental Protection Agency to study fracking's effects on surface water quality (see Shale Daily, Sept. 27, 2013).

The North Carolina Geological Survey has estimated that technically recoverable gas exists in the state's Sanford sub-basin (including Lee, Chatham and Moore counties in central North Carolina) and possibly the Dan River sub-basin (including Stokes and Rockingham counties in northern North Carolina).

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