July 2, 2013: Earlier today, the Senate  took a first vote on  the Senate version of House Bill 94 (Amend Environmental Laws).  The Senate version already looked significantly different from the bill that came over from the House, but senators approved several more floor amendments before voting on the bill. One amendment attempts to calm a controversy over new language  on disclosure of fracking chemicals that senators added to House Bill 94 in committee.  The new language allowed drilling companies to withhold information on “trade secret” chemicals from state regulators; those chemicals would only be identified if  needed  to address an environmental emergency or health hazard. An earlier post talked about the disclosure language and some of the problems with after-the-fact disclosure of fracking chemicals.

The proposed limits on chemical disclosure were not well-received.  Members of the state’s  Mining and Energy Commission —  many appointed by legislative leaders — objected strenuously to the bill language. The commission had already drafted a disclosure rule that required drilling companies to fully disclose the chemicals used in hydraulic fracturing to staff in the Department of Environment and Natural Resources (DENR), but protected trade secret information from disclosure to the public. Because of objections from Halliburton lawyers, the Commission had delayed action on the draft rule to allow more time for DENR to  address concerns about trade secret protection.

The Senate bill language clearly caught members of the Mining and Energy Commission by surprise. Although DENR had signed off on the new legislative language, no one had consulted the MEC.  On behalf of the Mining and Energy Commission, Chair James Womack delivered a letter to legislators  expressing concern  about allowing an energy company to  unilaterally decide to withhold information from the state by labeling it a trade secret. The letter also noted that the bill would be inconsistent with the way trade secret information is normally handled under the state’s  Public Records Act.  Full text of the MEC letter here:  H94 Concerns_MEC Memo_30Jun2013 (1).

In an effort to quiet the controversy, the Senate amended the bill on the floor to revise the disclosure language again.  The amended language requires the Mining and Energy Commission to adopt a chemical disclosure rule that will do two things:

1.  The rule would allow  DENR and the MEC  to  “review” information on chemicals used in fracking fluid, but not  actually “take possession or ownership” of trade secret information. The amended language seems  intended to prevent creation of a public record that might become the focus of a lawsuit over disclosure. State regulators could see information on fracking chemicals,  but could not receive the information in writing and keep it on file with other information on the fracking operation. While that approach may make the industry more comfortable, it will make it very difficult for  DENR staff to have the information needed  to provide adequate oversight for drilling operations– a problem that would be compounded over time by staff turnover.  Allowing a DENR staff person to see the  list of  fracking chemicals  when fracking begins does not ensure the availability of that information to staff five years later.

It also isn’t clear whether the state would have any recourse if the information provided for review turned out to be inaccurate or misleading. Generally, state agencies can take enforcement action if a permit applicant submits inaccurate or misleading information; under the new Senate language, the information would be made available for review but never actually submitted to the agency.

2. The disclosure rule would also require public disclosure of the chemical family for each fracking chemical through an online chemical registry such as FracFOCUS. The draft MEC rule had similar language, except that the draft rule required disclosure of each specific fracking chemical unless the chemical constituted a trade secret.  Under the rule, disclosure of the chemical family in place of the specific chemical would only be allowed for chemicals designated as trade secrets.

The Senate has to take one more vote on the new version of House Bill 94. Once approved by the Senate, the bill goes back to the House for concurrence in the Senate’s changes.