June 3, 2011
Texas Railroad Commissioner David Porter said he’s committed to completing all rulemaking to require disclosure of chemicals used in hydraulic fracturing by July 1, 2012. The Texas Legislature sent HB 3328 to Gov. Rick Perry on May 31, 2011. The bill instructs the Railroad Commission to write disclosure rules for chemicals deemed hazardous to on-site rig workers by July 1, 2012. The bill also requires rulemaking, for disclosure of all other chemicals not listed on the completed form used during fracking, to be completed no later than July 1, 2013. It is expected that rulemaking will commence when Gov. Rick Perry has signed the bill into law.
Porter’s comments follow those of Railroad Commission Chairman Elizabeth Ames Jones who would also like to see the rules completed as quickly as possible but also stated earlier this week that she will do her best to protect proprietary trade secrets. HB 3328 does allow for certain protections providing certain chemicals that may be deemed as proprietary trade secrets are exempted from the reporting requirements provided certain requirements are met.
HB 3328 – Key Components:
- Requires the Railroad Commission to adopt rules that require an operator to disclose chemicals used in hydraulic fracturing of an oil or gas well by completing the form on the Internet chemical disclosure registry developed and implemented by the Ground Water Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC).
- Information would include each chemical ingredient regardless of whether it must be listed on a Material Safety Data Sheet under the federal Occupational Health and Safety Act (OSHA).
- An operator would be required to post the completed form on the GWPC/IOGCC website.
- The operator would also be required to submit the completed form to the Commission with the well completion report. In addition to the completed form, an operator would also be required to provide to the Railroad Commission a list of all other chemical ingredients not listed on the completed form that were intentionally included and used for the purpose of creating a hydraulic fracturing treatment.
- An operator would not be required to disclose ingredients that were not purposely added to the hydraulic fracturing treatment, occur incidentally, or are not disclosed to the operator.
- The Railroad Commission would be required to adopt rules to prescribe a process by which an operator or a service company could designate certain information as a trade secret not subject to Texas open records law, and it would authorize the entity claiming the trade secret to withhold information asserted to be a trade secret.
- The rules would require that a trade secret claim be filed within 2 years of filing the completion report with the Commission and limit a person who could challenge such a claim to the landowner on whose property the well is located or who owns adjacent property, or a department or agency of Texas.
- The rules would be required to include an efficient process for an entity for whom a trade secret claim has been claimed or approved to provide information to a health professional or an emergency responder in accordance with OSHA regulations.
- Require that in the event of a trade secret challenge that the Railroad Commission notify the service company performing the hydraulic fracturing treatment on the relevant well, the supplier of the additive or chemical ingredient for which the trade secret claim is made, or any other owner of the trade secret being challenged and provide the owner an opportunity to substantiate its trade secret claim.
- Require the Railroad Commission to develop a process for making the legal determination as to whether information claimed to be a trade secret actually qualified as such under the Open Records Act as modified by the bill. The agency reports that currently the majority of permitting activity concerns unconventional reservoirs in which all wells are fracture stimulated. Operators generally consider the components and composition of certain chemical components of the treatments to be trade secrets and vary them from field to field and in different areas of the same field.