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Companies move toward disclosure in frac-fluid issue

Bob Tippee
Editor

In a simmering US political challenge to the main method for completing gas wells in shale, a secondary issue over proprietary information is starting to dissipate.

The larger threat is federal regulation of hydraulic fracturing, refinements of which have combined with horizontal drilling to unlock the enormous potential of shales.

The oil and gas industry has used hydraulic fracing for 60 years. Regulation of the practice has occurred effectively at lower levels of government.

But activist lawmakers and regulators want to impose federal regulation. The producing industry, wary of new delays and costs, says that level of oversight isn’t necessary.

In support of a new layer of regulation, environmental groups and their friends in government are planting fear in a public mostly unaware of the technique before overblown warnings emerged that it dooms drinking water.

Their regulatory push includes an effort to require disclosure of frac-fluid composition.

At first, the industry opposed the idea. An important element of competition among frac service providers is fluid performance, which depends greatly on ingredients. Disclosing fluid composition would be like giving away company secrets.

At the end of September, however, Schlumberger Ltd. said it was asking suppliers for permission to report chemicals used in its frac fluids. A month later, Chesapeake Energy Corp. supported disclosure and posted on its web site a list of chemicals in fluids used to frac its wells.

In rapidly developing US shale plays, both companies are heavyweights.

They also worked together on a Louisiana well near where 17 cattle died last April after drinking water thought to contain spilled frac fluid. So they have first-hand experience with the readiness of opponents to use an incident like that to incite alarm.

Because fear of fracing is largely fear of the unknown, information should be a prime antidote. Against determined opposition, however, it’s never guaranteed to work.

Understandably, many companies abhor the idea of tipping their proprietary hands on frac fluids.

Given recent events, however, and in view of the broader effort to regulate if not stifle hydraulic fracing, it’s an idea whose time already may have arrived.

(Online Oct. 30, 2009; author’s e-mail: bobt@ogjonline.com)


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