Source: Dow Jones News Service, April 28, 2014
Posted on: http://envfpn.advisen.com
Oil-field service company Baker Hughes Inc. said minor formatting tweaks to an online form at FracFocus.com will allow it to fully spell out all the chemicals it uses to help coax out oil and gas out of the ground.
Baker Hughes is one of the largest oil-field services companies in the world, competing with the likes of Halliburton Co. and Schlumberger Ltd. It often has stopped short of naming chemicals used in the hydraulic fracturing process when it reports to FracFocus, the online national registry where the public can look up well details in several states.
Some companies, though not all, have resisted greater transparency around fracking fluids, citing trade secret protections. Baker Hughes said FracFocus’s new format lets companies list individual chemicals used in wells without linking them directly to specific mixtures of compounds with trade names. That way, the company said, it’s clear what’s gone down a well, but competitors won’t be able to figure out the ratios and recipes Baker Hughes has used to create its own fluids. Decoupling ingredients will sufficiently protect Baker Hughes and its energy customers operations, the company said, calling the new policy “a balance that increases public trust while encouraging commercial innovation.”
Fracking is frowned upon in some quarters. The process involves pushing chemicals, sand and water down wells at a high pressure to break open dense rock formations. The new cracks blasted open let oil and gas flow to the surface. While the chemical portion of that equation is relatively small, it remains contentious to some communities and environmental groups.
Baker Hughes posted the new policy on its website in late March with little fanfare. The change was first reported last week by Energy and Environment Publishing.
The company’s move could help resolve a years-long standoff between drillers leery of giving away their special formulas and environmentalists who want to know 100% of all chemicals used in fracking. Environmental groups say the data is needed in case of a spill and to check for groundwater contamination. The energy industry has argued fracking isn’t likely to contaminate groundwater, and the chemicals are safe.
Sierra Club lawyer Nathan Matthews said his group advocates mandatory full disclosure, and Baker Hughes’ new policy demonstrates it’s feasible.
“I do think that there has been a steadily building public concern over the lack of concern and public concern for the lack of disclosure. Other than that, I don’t know why it has taken so long,” he said.
Since 2010, 23 states have adopted rules requiring companies to report which chemicals they use to frack, but most have exemptions for trade secrets protecting proprietary formulas. Last month, an Energy Dept. task force charged with reviewing FracFocus said companies were holding too much back. Nearly 85% of registered wells on the site invoke a trade secret exemption or redact at least one chemical.
Schlumberger said it often fully discloses chemicals to regulators, but does still invoke trade secret exemptions on occasion. It is “increasingly the exception rather than the rule,” a spokesman said.
Halliburton fracks more in North America than any other company, and has argued that trade secret protections are critical. It worries greater disclosure could lead to reverse engineering of patented processes.
“Even if chemical ingredients are not listed with the additives in which they are found, an experienced chemist for a sophisticated competitor–knowing the types of chemicals used in different types of additives–would be able to discern which chemicals are found in which additives,” Halliburton said in a public comment last month
A Halliburton spokeswoman said the company would consider Baker Hughes’ policy and study its results.
More at The Wall Street Journal’s Corporate Intelligence blog, http://blogs.wsj.com/corporate-intelligence/