Colorado to Require More Fracking Disclosure

Colorado to Require More Fracking Disclosure
February 3, 2012

After months of deliberations, the Colorado Oil and Gas Conservation Commission unanimously approved new rules increasing disclosure of hydraulic fracturing chemicals. The new rules, among the most comprehensive in the nation, will require operators to disclose publicly all the chemicals used in the hydraulic fracturing process.

Formulas Remain Proprietary
The rule will require drillers to report all of the chemicals and the concentrations in which they are used in the fracking fluid, but will not require reporting of the product into which they were used. This information will be publicly posted on FracFocus.org, an independent website managed by the Ground Water Protection Council and the Interstate Oil & Gas Compact Commission.

“We believed [FracFocus.org] to be a more efficient and cost-effective approach to work within that framework, at least initially, than go from the ground up and build our own site,” said Todd Hartman, communications director for the Colorado Department of Natural Resources. “Additionally, FracFocus has made continual improvements, and we believe it to be a highly useful and helpful product.”

Similar to disclosure requirements in Texas and Wyoming, the Colorado rule contains a proprietary exemption that enables businesses to protect trade secrets. Drillers seeking an exemption must complete a form, under penalty of perjury, that attests to the chemical’s proprietary status.

Hickenlooper Drove Deal
Gov. John Hickenlooper (D) played a central role in pulling together support for the new rules. Hickenlooper, a former geologist and businessman, said the new rules will likely serve as a model for other states.

“These new rules give Colorado the fairest and most transparent set of fracking regulations in the country,” Hickenlooper said in a press release. “We believe oil and gas development can thrive while also meeting our high standards for protection of public health, water, and the environment.”

Forging a Compromise
Christopher Guith, vice president for policy at the Institute for 21st Century Energy at the U.S. Chamber of Commerce, says proprietary exemptions should be viewed through the lens of intellectual property.

“The sanctity of intellectual property and its protection is one of the primary reasons the United States is the most innovative country in the world,” said Guith. “If creative minds cannot be assured that a competitor will not be prevented from simply misappropriating its idea, concept, application, etc., then no corporation or individual has much of a an incentive to innovate or invest the hundreds of millions of dollars on R&D that are spent annually to advance technology.”

Guith said public disclosure and protection of intellectual property are not mutually exclusive.

“Public disclosure of the materials used in oil and natural gas production is essential,” said Guith. “The public needs to have confidence in industry and its regulators, and transparency helps provide that confidence.”

Hartman suggested states considering disclosure requirements should listen closely to all parties to recognize what the true issues are, beyond the public rhetoric.

“By understanding what industry needed to protect and what was acceptable and preferable to activists, we were able to find areas of overlap that led to a solution, one that included decoupling key information in fracking recipes but still provided enhanced disclosure,” said Hartman. “It provided for continued protection of trade secrets when necessary, but also an unprecedented level of disclosure about fracking chemicals.”

The Colorado rule will take effect April 1.

John Monaghan (jmonaghan@heartland.org) is the legislative specialist for energy and environment issues at the Heartland Institute.