Energy Exchange

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.

Today’s release of a draft US Environmental Protection Agency study on groundwater contamination around natural gas wells in Pavillion, Wyoming, should be a wake-up call to anyone who thinks public anxiety about shale gas development is overblown and unjustified. 

Based on the draft report, it seems pretty clear that hydraulic fracturing fluids, and other contaminants associated with natural gas production, found their way into Pavilion’s groundwater.  And it is not hard to see why.  The report reads like a primer on what NOT to do when developing unconventional gas.  It’s all here: poor cement quality, cement not injected to the proper depth to isolate the well from the groundwater, fracturing activity taking place in close proximity to the water table (in itself a questionable practice, but in this case, particularly egregious given the lack of cap rock between the zone of fracture and the groundwater), soil contamination around waste water pits indicating spills at the surface that migrated to groundwater and lack of clarity about what went down the well because of incomplete disclosure of the chemicals used in the fracturing process.

This draft report is Exhibit A on why stronger regulation and enforcement is necessary if the general public is EVER going to believe that shale gas development is a safe source of natural gas.  Indeed, the draft report says it best:

“Finally, this investigation supports recommendations made by the U.S. Department of Energy Panel (DOE 2011a, b) on the need for collection of baseline data, greater transparency on chemical composition of hydraulic fracturing fluids, and greater emphasis on well construction and integrity requirements and testing. As stated by the panel, implementation of these recommendations would decrease the likelihood of impact to ground water and increase public confidence in the technology.”

Having played a leading role in developing the DOE recommendations, we couldn’t agree more.   As this draft report makes clear, the time for action to improve regulation and enforcement is now.