API endorses GWPC-IOGCC frac fluid disclosure proposal

The American Petroleum Institute announced that it supports the state-based voluntary chemical registry that is being jointly developed by the Ground Water Protection Council and the Interstate Oil & Gas Compact Commission.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Dec. 15 -- The American Petroleum Institute announced that it supports the state-based voluntary chemical registry that is being jointly developed by the Ground Water Protection Council and the Interstate Oil & Gas Compact Commission.

“The states are the proper authority for determining requirements for chemical disclosure, so a program developed by the GWPC and endorsed by the IOGCC is a step toward a solution on disclosure,” API Pres. Jack N. Gerard said on Dec. 14.

He added, “But it is critical that we ensure confidential business information is protected, and we will work with the GWPC to improve the reporting elements—which ultimately should enable maximum participation and enhance the program’s overall effectiveness.”

Critics of hydraulic fracturing argue that full disclosure of frac fluid chemicals is essential to protect drinking water supplies. US Sen. Robert P. Casey Jr. (D-Pa.) and US Reps. Diana DeGette (D-Colo.), Maurice D. Hinchey (D-NY), and Jared Polis (D-Colo.) introduced bills in 2009 to require this, and to place fracing regulation under the federal Safe Drinking Water Act.

Producers say that fracing has been used safely for 60 years, that it involves production from formations hundreds of feet below drinking water supplies, that well casing and cementing keep frac fluids from migrating into groundwater and drinking water supplies, and that states have demonstrated that they are better qualified to regulate fracing than the federal government.

Primarily water
Many frac fluid suppliers say that while more than 95% of it is water, remaining ingredients sometimes vary and should be regarded as proprietary for competitive reasons. Several states have developed frac fluid ingredient reporting requirements which allow disclosure only during emergencies and only to appropriate government officials and responders.

The Arkansas Oil & Gas Commission, for example, has proposed General Rule B-19, covering fracture stimulations, which would go into effect on Jan. 15, 2011. Well operators would be required to use steel alloy casing and cementing capable of withstanding anticipated pressures, and monitor all well casing annuli to prevent a loss of well bore integrity. Companies performing fracing services would be required to provide the oil and gas commission director or his designee, as well as to the well operator, master lists of all fracing fluids and additives.

Wyoming’s Oil & Gas Commission approved frac fluid disclosure requirements in June. These went into effect on Sept. 15. “We’ve had an interesting time with issues we didn’t anticipate since then,” said Thomas E. Doll, the commission’s supervisor, at a Nov. 30 forum on fracing on public lands at the US Department of the Interior.

Doll explained, “The disclosure takes place with a permit application or by a sundry disclosure application. This does not cover the secondary chemical market which provides much of the material to the frac fluid providers. We don’t have a provision to protect proprietary information, but the Wyoming Public Records Act has a very narrow definition of trade secrets which are eligible for protection. As a result, we can issue a trade secret exemption to the disclosure requirement after a chemical supplier provides the necessary information.”

The state still requires that the information be submitted, but pledges not to make it public unless an incident requires it to do so, Doll said.

API said GWPC’s voluntary, state-based registry would have two phases. The first would be a voluntary reporting registry where operators would provide data on a well-by-well basis for all wells on federal, state, and private land. This would be tied to a longer-term registry, which would be developed over several years using GWPC’s risk-based data management system as a platform which 25 states already use to oversee oil and gas activities.

API noted that it has worked closely with GWPC on groundwater protection issues, and that industry members have developed robust standards and recommended practices through API’s ongoing program that cover fracing and ways to develop oil and gas safely and responsibly.

Contact Nick Snow at nicks@pennwell.com.

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