Environmentalists challenge trade secret protections for hydraulic fracturing

Environmentalists have mounted a legal challenge against Wyoming regulators they say are improperly approving oil and gas companies’ “overly broad,” boilerplate requests to shield information about the chemicals they use in drilling operations.

The critics, led by Earthjustice, filed a lawsuit late Friday asking a Wyoming district court to force regulators to reconsider roughly 50 trade secret exemptions it granted to companies using hydraulic fracturing techniques to extract oil and gas in the state. The process involves shooting mixtures of water, sand and chemicals deep underground to break up shale rock formations and extract oil and natural gas.

Under landmark, two-year-old regulations, the state requires well operators to disclose the identities of chemicals they use in the process. But the measure allows trade secret exemptions meant to protect companies from being forced to reveal proprietary information, and the environmental critics say the state has been too eager to approve them.

Laura Beaton, an attorney with Earthjustice, said that in 2010 and 2011, the state has granted 50 chemical secrecy requests by oil and gas service companies, including Halliburton Energy Services, Inc., Weatherford International and NALCO Co. Environmental groups discovered the information was being shielded from disclosure after seeking access to records on hydraulic fracturing chemicals used in Wyoming last November.

The Wyoming Oil and Gas Conservation Commission provided some of the requested information to the environmentalists in January, but it refused to turn over any chemical formulations that had been designated as “trade secrets.”

“Many companies did not provide the required level of factual support to get trade secret status,” Beaton said. Others sought “broader-than-needed exemptions” that went beyond protecting simply “secret ingredients” in their fracturing formulas, she said.

Bruce Baizel, a senior staff attorney with the group Earthworks, said the companies seeking the protection sent regulators “generic filings, and they had little economic justification for why they would need to have a trade secret (exemption).”

The lawsuit asks the seventh judicial district court in Casper, Wyo., to invalidate any “insufficiently supported and overly broad” trade secret requests and force the state regulators to reconsider the exemptions.

Tom Doll, supervisor of the Wyoming Oil and Gas Conservation Commission, said he had read the legal filing but did not have a comment on it.

But John Robitaille, vice president of the Petroleum Association of Wyoming, noted that even if they are granted trade secret status, oil and gas companies are still obligated to send identifying information about the chemicals they use to state regulators.

“The commission will have the information on file but will prevent it from becoming public if they agree to the confidentiality request only,” Robitaille said. “The supervisor may release the confidential information in th eevent that it becomes necessary in the event of an incident, so at this point in time, there is no reason to release confirmed trade secret information that remains in the state’s possession and will be available for other agency review if necessary.”

The outcome of the lawsuit could have implications for similar measures in other states, including Texas, Arkansas and Colorado, where similar disclosure laws are on the books, along with similar protections for proprietary information. Wyoming’s first-of-its-kind chemical disclosure requirement has been used as a model for other states and may also be eyed by federal regulators considering a similar mandate for drilling on federal lands.

The push for chemical disclosure is tied to mounting public fears that the ingredients in fracturing fluids can be spilled above ground and contaminate local groundwater supplies. Fracturing critics also say that natural gas can escape from poorly designed or cemented wells, also tainting drinking water.

Industry officials say the process is safe and note that fracturing fluids are generally forced into underground layers far from aquifers. They also point to the industry’s disclosure of fracturing fluid ingredients on the FracFocus.com chemical registry.

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