Energy Exchange

Ohio Governor John Kasich showed real leadership earlier this month when he introduced energy bill with the most comprehensive rules in the country for chemical disclosure during oil and gas operations. The Governor’s bill would have required disclosure of not only the chemicals used in hydraulic fracturing – as a number of other states have done – but also the full range of chemicals used throughout the lifecycle of a well. Hydraulic fracturing gets all the attention, but the Governor and his team understand that dangerous chemicals are also used in drilling, producing, servicing and shutting down wells. The entire process should be transparent from beginning to end — “from spud to plug,” as it’s called.

This was smart policy when the Governor proposed it. And it’s smart policy today. Unfortunately, the energy bill passed yesterday by the Ohio General Assembly fails to fully deliver on that vision. In the face of intense industry opposition, lawmakers eliminated many of the reporting requirements contained in the original bill. EDF is disappointed the final bill does not live up to what Governor Kasich proposed, but we give the Governor credit for putting the idea forward and expanding the terms of the debate – both in Ohio and nationally.

To be fair, even in its scaled-back version, the Ohio disclosure policy breaks new ground. It requires disclosure of the chemicals used in stimulating a well. This includes not just hydraulic fracturing but also other kinds of stimulation techniques – something most states have missed in their disclosure rules.

Additionally, companies will be required to disclose the chemicals used in a well until the surface casing is set in place. As we testified in the Ohio House, this still leaves the public in the dark about a lot of dangerous chemicals that are used to drill and operate a well. But again, it’s a step forward compared to what other states have done.

We’re disappointed, though, by changes the House made to the trade secret provisions in the bill. In the original version, companies would have been required to report trade secret information to the Department of Natural Resources. This would have ensured that the agency had quick access to chemical information it might need to respond to a spill, initiate an investigation or respond to a complaint.  Under industry pressure, the Assembly caved on that language, and companies will now be allowed to withhold trade secret information from the regulators. 

The bill establishes an unqualified right for certain land owners to challenge trade secret claims in court. So, there’s at least a mechanism in place to police the system and make sure companies aren’t hiding behind bogus trade secret claims. But it would have been far better to have trade secrets turned over to the state – not only in cases where this information is needed to protect public health and safety, but also because it would have given anyone, not just the land owners, a right to challenge trade secrets under the Ohio Public Records Act.

This is a big bill. It addresses a wide range of issues – not just oil and gas – and includes far too much to cover here. It has some good provisions, such as new requirements for companies to report where they’re getting their water from and how much they’re using, and requirements for companies to test the baseline water quality in nearby water wells before they start drilling. The bill also has some really bad provisions – like an egregious one that strips citizens of the right to appeal permits issued to oil and gas operators.

The passage of the energy bill is not the end of the process: the agency rules implementing this bill will be written in the months ahead, and EDF will be working to make sure they are as strong as possible. And we’ll be working on other rules to reduce the risks oil and gas operations pose to communities and the environment.

This includes improving Ohio’s rules for air pollution from oil and gas operations. It means making sure we have tough standards in place to manage the huge waste streams these operations produce. It means putting smart planning in place to preserve landscapes and protect the fabric of local communities. And sooner rather than later, it’s going to mean coming back to the General Assembly and fixing what didn’t get done right the first time.

Yesterday the Ohio Senate passed Senate Bill 315, major energy legislation that addresses a wide range of issues – including provisions relating to transparency in oil and gas operations.  Unfortunately, the version that passed falls short of Governor Kasich’s ambitious call for broad chemical disclosure.

In the introduced version of the bill put forward by Governor Kasich and sponsored by Chairwoman Shannon Jones, companies would have been required to publicly disclose all chemicals used throughout the entire lifecycle of oil and gas wells – the so-called “spud to plug” approach to chemical reporting.

This comprehensive approach to chemical reporting stands in contrast to other state policies that merely require disclosure of those chemicals used in the hydraulic fracturing process.  It reflects an understanding that a wide range of dangerous chemicals are used in drilling, stimulating, operating and closing wells, and regulators and the public need to know what’s being used in order to evaluate risks and put strong standards in place that protect communities and the environment.  Governor Kasich deserves a lot of credit for advancing this idea in the original version of the bill.

Unfortunately, in the face of intense industry opposition the version of SB315 that passed yesterday eliminates much of the reporting that would have been required under the Governor’s original proposal. 

The version of the bill that passed yesterday still has requirements for reporting the chemicals used in stimulating a well (which includes hydraulic fracturing).  It also has requirements for reporting chemicals used for drilling the surface interval of a well.  And it’s worth noting that the bill language for these provisions – while still needing improvements – is stronger than what was in the introduced version of the bill.

But the requirements for disclosing chemicals used for drilling beyond the surface interval were dropped – as were most of the requirements for disclosing chemicals used to service and operate the well.  So, it’s now up to the Ohio House of Representatives to restore these important provisions.  There’s a lot of nasty stuff that goes down a well during drilling and production.  In fact, it tends to be the case that companies use increasingly dangerous chemicals the deeper they go in the drilling process.  So, limiting disclosure of drilling fluids to just what’s used in the surface interval doesn’t make sense.

In addition to restoring the full “spud to plug” approach to the chemical reporting, the House also needs to add bill language ensuring that Ohio citizens can challenge any trade secret claims that companies may make to conceal the identity of chemicals.  That’s just a basic necessity for policing the system and giving the public a reasonable level of confidence that companies are playing on the up and up.

Finally, the bill should be amended to begin the process of assessing and reporting the chemical composition of waste streams from oil and gas operations.  Without an adequate picture of the chemical makeup of wastewater and other wastes that come from oil and gas operations, it is difficult to impossible to determine whether various methods of waste handling and disposal are protective of human health and the environment.

EDF was pleased to offer our support for the “spud to plug” concept embodied in the introduced version of the bill, but SB315 needs to be strengthened to earn our support going forward.

Transparency is just one small part of all that must to be done to ensure oil and gas operations are safe for communities and the environment, but it’s a critical piece of the puzzle that lays a foundation for developing protective rules and rebuilding the public trust.  So EDF looks forward to working with our partners, leaders in the General Assembly and the Governor to make sure the final version of SB315 lives up to its full promise and sets Ohio on the right path for protecting communities and environment.

Big news out of Denver this morning. 

Source: WLF

After weeks of intense wrangling between industry and environmental representatives, the Colorado Oil and Gas Conservation Commission (COGCC) adopted a hydraulic fracturing fluid chemical disclosure rule that, in many ways, serves as a model for the nation.

It’s been a learning process these last couple of years – as EDF has worked to get disclosure policies adopted in the states.  With their own disclosure rules, Wyoming, Arkansas, Texas and Montana have all made important contributions to the debate.  And in Colorado, we’re finally seeing things start to coalesce.

Colorado’s Rule 205A settles key questions about what kinds of information the public expects to see and how the information should be presented, including:

Requirements for Searchable Database

Picking up on a recommendation from the shale gas subcommittee of the U.S. Secretary of Energy Advisory Board (a panel on which EDF President Fred Krupp served), the Colorado rule requires chemical information to be made available on a website that allows people to search and sort data by company, chemical ingredient, geographic area and other criteria.

This is a big step that will allow land owners, neighbors, regulators and policymakers to focus and refine their questions and research about hydraulic fracturing.

We’re also fans of the fact that the rule requires operators to post their disclosures on Frac Focus, which must be made searchable by January 1, 2013.  If Frac Focus doesn’t have these upgrades in place by then (or isn’t clearly on a path to do so), the rule requires the COGCC to build its own searchable database.

The creators of Frac Focus – the Ground Water Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC) – are already talking about searchability, and the Colorado rule provides a clear signal that the states want to see it happen and happen soon.

(The Texas disclosure rule, which was also adopted today, uses Frac Focus as the disclosure platform, but doesn’t require searchability.  In adopting the rule, the Texas Railroad Commission agreed that Frac Focus should be made searchable and said it would work with GWPC and IOGCC to make those upgrades).

Full Disclosure of Chemical Ingredients

Colorado also set a national standard by requiring disclosure of the identities and concentrations of all chemical ingredients, not just those that have been determined to be “hazardous” according to Occupational Safety and Health Administration (OSHA) regulations.  Other states have taken the step of requiring disclosure of the identities of all chemicals, but Colorado is the first to require disclosure of both chemical identities and concentrations for all chemicals.

As readers of our blog posts on fracturing fluid disclosure know, just because a chemical hasn’t been identified as “hazardous” under OSHA Hazard Communication rules, it doesn’t necessarily mean the chemical isn’t dangerous.  OSHA regulations require that chemicals be identified as hazardous when studies show they could be dangerous in a workplace setting.  These regulations don’t look at the question of whether a chemical might be dangerous if exposure occurs through an environmental pathway.  Moreover, a chemical might be dangerous in both a workplace setting and through environmental exposure – but if the studies haven’t been done yet, OSHA regulations don’t require you to list it as hazardous.

According to industry, at least half of the chemicals used in hydraulic fracturing fluids don’t fall under these OSHA Hazard Communication rules.  And toxicological data on many, if not most, of these chemicals is very thin.  So requiring full disclosure of hydraulic fracturing chemicals is a critical first step toward building up our understanding of the risks they may present.

The Colorado disclosure rule isn’t perfect, but it’s darn good.  And with the provisions for searchability and full chemical disclosure, it has set a national standard on two key issues.