The Number of Fracking Trade Secrets in Texas Will Likely Surprise You

Photo by Matthew Lloyd/Getty Images

Engineers on the drilling platform of the Cuadrilla shale fracking facility on October 7, 2012 in Preston, England.

What’s in the water? Or, to be precise, what’s in the mix of water, sand and chemicals that oil and gas drillers are sending deep underground in the drilling process known as hydraulic fracturing, or “fracking?”

The answer? We still really don’t know. While Texas passed a law last December that new wells using fracking to drill have to disclose the ingredients of the 4-6 million gallons on average of fluid they send underground, there’s a loophole: trade secret exemptions.

Because each company’s exact mix is proprietary, drilling companies argued during the rule making that fully disclosing the amount of each chemical in its fracking fluid would help the competition. Drillers argue that only 5 percent of the fluid on average consists of chemicals.

But extrapolate 5 percent of 5 million gallons, as the Dallas Morning News did in an analysis earlier this year, and you get as many as 55,000 pounds of chemicals. What’s more, drilling companies may be exempting far more information than they agreed to under the new rule.

Scott Anderson of the Environmental Defense Fund (EDF) says there are “bugs” in the system:

“… People have begun to wonder whether the disclosure rules are accomplishing what was intended. The question is important because rules that aren’t working need to be changed. A good regulatory system is based on a process of continual improvement, not a naive idea that the rulebook can be written in a way that will never need changing.

Unfortunately, judging from early press reports, there are quite a few bugs in the system. To be fair, the reporting requirements are quite new and still being implemented — and analysis of the data has barely begun. But problems are emerging. The issue receiving the most media attention is the sheer number of trade secret claims.”

Anderson decided to look at Texas well data for the month of July disclosed online at FracFocus.org, the clearinghouse for drilling disclosure. This is what he found:

• Anderson says that “29 percent of reported Chemical Abstract Service (CAS) numbers – unique identifiers needed to look up what is known about a chemical in scientific literature – were wrong.” So those chemicals don’t exist in the official registry.
• “By coincidence, the total percentage of discrete chemicals that companies claimed as trade secrets was also 29 per cent.” Anderson says that one company “seems to have claimed 26 percent of its chemicals as trade secrets, although it told EDF before the rules were enacted that fewer than 5 percent of chemicals in its catalogue would need trade secret protection.” He notes that this doesn’t necessarily mean the company is or isn’t complying with the law, “but it does suggest that hard questions need to be asked.”
• And the chemicals that are being exempted as “trade secrets” could also be more dangerous. The EDF found that “the rate of trade secret claims appears to be much higher for chemicals that are not subject to Occupational Safety and Health Administration MSDS (Material Safety Data Sheet) disclosure requirements than for chemicals that are.”

Bloomberg also recently looked into what is and isn’t being disclosed by drilling companies in Texas. Their findings:

“Drilling companies in Texas, the biggest oil-and-natural gas producing state, claimed … exemptions about 19,000 times this year through August, according to their chemical-disclosure reports. Nationwide, companies withheld one out of every five chemicals they used in fracking, a separate examination of a broader database shows.

Trade-secret exemptions block information on more than five ingredients for every well in Texas, undermining the statute’s purpose of informing people about chemicals that are hauled through their communities and injected thousands of feet beneath their homes and farms, said Lon Burnam, a Democratic state representative and a co-author of the law.”

While the Railroad Commission of Texas (RRC), which regulates oil and gas drilling in the state, is looking to enact tougher rules on drilling early next year, mostly focused on well integrity and safety, it hasn’t indicated that it plans to make fracking fluid disclosure laws more stringent.