Bloomberg News

Drillers May Frack First, Disclose Later Under Draft Plan

May 01, 2012

A pump to load water at a Heckmann Water Resources (HWR) treatment plant that separates oil, sediment and water mixed during the hydraulic fracturing process, near Carthage, Texas. Photographer: Jason Janik/Bloomberg

A pump to load water at a Heckmann Water Resources (HWR) treatment plant that separates oil, sediment and water mixed during the hydraulic fracturing process, near Carthage, Texas. Photographer: Jason Janik/Bloomberg

Natural-gas companies drilling on U.S. land would be permitted to wait until after hydraulic fracturing is completed to disclose what chemicals they used, under a draft rule being considered by the Interior Department.

A version in February required companies to file a complete chemical makeup at least 30 days before work began, a mandate that drew complaints from energy trade groups, including the Washington-based American Exploration and Production Council. The rule might slow energy production, they said.

President Barack Obama has pledged to increase U.S. natural-gas output in a way that doesn’t hurt the environment. Delaying disclosure will make it harder for homeowners to prove that drilling was responsible for tainted water, according to Amy Mall, a senior policy analyst for the Natural Resources Defense Council in Washington.

“Homeowners need the ability to show that there’s been a change in their water before and after fracking,” Mall said in an interview. “ We’re concerned that it was weakened.”

Disclosure before fracking would let landowners test for the specific chemicals drillers plan to use, Mall said. Otherwise, pre-drilling tests may not detect all fracking chemicals.

Post-Fracking Disclosure

Hydraulic fracturing, or fracking, releases gas trapped in shale rock by injecting water, sand and chemicals thousands of feet underground. It’s used for almost every new natural-gas well drilled in the U.S.

Requiring disclosure of chemicals “would only be required after the fracturing operation has taken place,” according to the draft, obtained by Bloomberg News.

“You know how it works,” Mall said. “If they find something in their water after the fracking, the company says you have to prove it wasn’t there before.”

The Washington-based Environmental Working Group said in February that some of the chemicals already disclosed by the companies are known to cause cancer or reproductive harm.

The Obama administration plans to post the fracking information on a public website, possibly on FracFocus.org, according to the draft. FracFocus is managed by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission.

API Guidelines

The rule are being developed with input from the public and industry, according to an administration official familiar with its development who declined to be identified because he isn’t authorized to discuss a matter still being written.

The rule, which also includes standards for well construction, is consistent with guidelines established by the American Petroleum Institute, the largest industry trade group, according to the draft.

In the draft, the Interior Department said it doesn’t expect the additional requirements to slow approval of drilling permits.

“We see the potential value in pre-frack disclosure but, since changes in the chemicals used are sometimes made at the time the operation takes place, a true-up requirement would also be needed,” Scott Anderson, senior policy adviser for the Environmental Defense Fund in Austin, Texas, said in an interview. “A good way to give landowners and the general public a view of what’s likely to be used prior to frack operations is to make sure that nearby frack treatments have been reported.”

Federal Oversight

While Obama has praised natural-gas drilling as a source of hundreds of thousands of jobs in the next decade, critics in the industry say the regulations may be a first step toward broader federal oversight of fracking.

About a fifth of U.S. production occurs on government land, primarily in western states such as Colorado and Wyoming. Natural-gas companies argue that regulating the practice should be left to state authorities who are more familiar with the local geology.

“States are effectively requiring disclosure, without discouraging investment,” Reid Porter, a spokesman for the American Petroleum Institute, said on Feb. 3, following the release of the first draft. “FracFocus, which is working very effectively, is an example of this and is being adapted by several states.”

To contact the reporter on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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