As public awareness and growing concerns surrounding hydraulic fracturing (“fracking”) operations increases, regulatory agencies are taking a closer look at the process and are soliciting help from both public and industry stakeholders to better understand fracking operations. On May 19, 2014, the Environmental Protection Agency (“EPA”) solicited comments from the public and from industry stakeholders on obtaining data on the chemical make-up of fluids used in fracking operations, known as “fracking fluids,” as well as the potential health and safety risks of exposure to those fluids to human health and the environment.
Fracking is not a new process. According to the U.S. Department of Energy, as of 2013 at least two million oil and gas wells have been fracked in the U.S in the last sixty years.
However, public awareness has recently grown because the use of fracking has increased significantly in the last ten years due to new horizontal drilling technologies that improve access to natural gas and oil deposits. Fracking involves injection of large volumes of fluids at high pressure into a perforated well to create fractures in the source rock formation. The fracking fluid is typically water-based and contains various chemicals, including proppants, bactericides, buffers, stabilizers, fluid-loss additives and surfactants. After injection, large portions of the fracking fluids are recovered and recycled; however, there is normally some fracking fluid loss within the oil or gas bearing strata. Over the years, this technique has greatly increased domestic natural gas and oil production by allowing wells to reach previously inaccessible natural resources.
In many cases, fracking companies claim that disclosing their fracking fluid ingredient list, in whole or in part, would damage their ability to compete in the market. In many states, the companies can apply for trade secret status with the appropriate state regulating agency, and if approved, the identities of the chemicals are exempt from disclosure. Other states do require disclosure of fracking fluid ingredients to the state regulators, however the state regulators do not make those lists of chemicals public, again claiming the ingredients are trade secrets that vary from company to company. Id. A few states, such as Louisiana, require operators to disclose all additives used in fracking fluids and the names and concentrations of chemicals which are subject to Occupational Safety and Health Administration Hazard Communication requirements (29 CFR 1910.1200) on a publically available chemical disclosure registry, called FracFocus. Id. However, additives deemed to be trade secret are exempt from that reporting requirement. Id. A report issued by, the U.S. Department of Energy’s Secretary of Energy Advisory Board on February 24, 2014, titled the Task Force Report on FracFocus 2.0, confirmed that full disclosure is not made by most companies reporting on FracFocus, and that companies still rely on the trade secret exemption found in federal regulation (29 C.F.R. §1910.1200(i)(1)), in making disclosures on FracFocus.
This non-disclosure of the chemical make-up of the fracking fluids has caused a different problem for the industry – public fear. Many concerns have been voiced by the public relating to the alleged “chemical cocktail” within the fluids and the potential for fracking fluids to contaminate drinking water. States like New York and Colorado have completely banned fracking all together in response to public fear. The news media is full of pictures of people across the U.S. holding up signs at public meetings with phrases opposing fracking.
This issue of public disclosure of the chemical make-up of fracking fluid is a significant issue at the state and federal level and has been one of the most contentious issues. Environmentalists argue that the public lacks adequate information to assess whether chemicals used in fracking represent threats to human health and/or the environment. Earthjustice, a public interest law firm, and 114 other organizations petitioned the EPA under Section 21 of the Toxic Substances Control Act to adopt a rule that would require, among other things, mandatory disclosure and reporting of the chemicals used in oil and gas exploration and production activities. In response to this petition, on May 19th, the EPA released an Advanced Notice of Proposed Rulemaking (“ANPR”). The ANPR seeks public comment on over fifty specific questions, including questions such as whether the disclosure should be mandatory or voluntary, whether the EPA should employ incentives for disclosure of the information, what types of information should be disclosed, what types of health and safety studies should be disclosed, whether a third-party certification and collection should be required, and how data that is claimed to be trade secrets or confidential business information could be reported and then aggregated and disclosed to the public while protecting the identities of the individual products and firms.
This is the EPA’s first official step toward creating a federal regulatory program that would require disclosure and reporting concerning chemicals used in fracking fluids. Such a regulatory program will affect companies in the oil and gas and chemical manufacturing industries, particularly those that use, manufacture, import, process or distribute chemical substances used in fracking treatments. EPA rests authority for such a regulatory program on TSCA section 8(d) which authorizes the Agency to require manufacturers, processors, and distributors of any chemical substance or mixture, and persons who propose to manufacture, process or distribute in commerce any chemical substance or mixture, to submit health and safety studies to EPA. It is expected that the EPA will receive a very large number of comments on this ANPR. All comments must be submitted on or before August 18, 2014.