‘Fracking’ Disclosure To Rise

Source: Dow Jones News Service, June 19, 2011
Posted on: http://envfpn.advisen.com

The natural-gas industry, bowing to longtime pressure, will disclose more information about the chemicals it uses in the controversial process of hydraulic fracturing.

On Friday, Texas Gov. Rick Perry signed into law a bill that will require companies to make public the chemicals they use on every hydraulic fracturing job in the state. While a handful of other states have passed similar measures, Texas’s law is significant because oil and gas drilling is a key industry in the state and the industry vocally supported the measure.

Environmental groups said the law doesn’t go far enough, but they agreed it was an important step.

Until recently, much of the industry opposed providing detailed information about its chemicals, arguing that they are trade secrets. But in recent months, as drilling opponents have accused companies of secrecy, many industry leaders have come to view that position as untenable.

“We have seen the light,” Aubrey McClendon, chief executive of gas producer Chesapeake Energy Corp., told investors when asked about chemical disclosure at the company’s annual meeting earlier this month.

Hydraulic fracturing, sometimes called “fracking,” involves blasting millions of gallons of water, sand and chemicals into the ground to break up oil and gas- bearing rocks. The process has been used for decades, but it has become far more common in recent years as it has been used to open up huge new gas fields in Texas, Louisiana, Pennsylvania and other states.

Environmental groups and some residents in drilling areas fear chemicals from the hydraulic fracturing process are seeping into drinking water supplies. They say companies should be forced to disclose information about the chemicals they use, in part so homeowners can test their water for contamination.

The industry says such contamination is impossible when wells are constructed properly, adding that tens of thousands of wells have been drilled and fractured with relatively few problems. There have been cases of problems with wells that were improperly constructed, but the industry says such cases are rare and many specific incidents are in dispute. Companies say chemicals make up less than 1% of the volume of most fracturing jobs and are mostly benign.

For drillers, though, making that argument was difficult when they were refusing to say what chemicals were being used. Information on chemicals was available at drilling sites, but environmental groups have criticized that information as incomplete and inaccessible to the general public.

“I think the one thing hopefully that we all learned is you can’t just say, ‘Take our word for it,'” said Matt Pitzarella, a spokesman for gas producer Range Resources Corp.

Last year, Range Resources said it would begin voluntarily disclosing the chemicals used in all its wells in Pennsylvania, where the debate has raged. The company said at the time it hoped others would follow suit.

Earlier this year, many big gas producers, including Chesapeake, Chevron Corp. and BP PLC, said they would begin voluntarily publicizing the chemicals online at FracFocus.org. Several states, including Wyoming and Arkansas, have recently passed mandatory disclosure rules with at least tacit industry support.

Environmental groups, saying neither FracFocus nor the state laws go far enough, have called for a mandatory, national chemical database.

“Regardless of what state you live in, we think you deserve to know,” said Amy Mall, a senior policy analyst with the Natural Resources Defense Council, an environmental group.

The Texas law will require companies to post information on FracFocus.org starting next year and also to disclose chemicals not included in the site’s database through a separate process. Companies can request that information on certain chemicals be withheld from the public as trade secrets.

The Texas bill drew strong support from much of the industry. In May, a group of 12 big gas producers, including Range, Anadarko Petroleum Corp. and Apache Corp., wrote to Texas legislators urging them to pass the bill.

Jim Keffer, a Republican state representative who co-authored the Texas bill, said he believes the law will help the industry. “We’re trying to alleviate the concerns,” he said. “We’re trying to show people that the industry does know how to do this.”

The Texas bill has drawn mixed reviews from environmental groups. The Environmental Defense Fund, which initially helped promote the bill, ultimately withdrew its support after various changes were made, including the provision to list some chemicals separately from others.

But Matt Watson, a senior energy policy manager for the group, said that while the bill “is not the national model we’d hoped for,” it is nonetheless a significant step.

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