April 11 (Bloomberg) -- The shale gas boom sweeping the U.S. is prompting states to make energy companies disclose what chemicals they are pumping into the ground to extract natural gas through hydraulic fracturing.
The new rules, adopted in places such as Colorado, Pennsylvania and Texas, should provide a nervous public with information it needs. Unfortunately, many of the rules contain large loopholes that could jeopardize public health and will only cast further suspicion on fracking, a practice with no shortage of critics. Ultimately, the states’ haphazard efforts highlight the need for a tough federal disclosure law.
The disclosure requirements in several states allow energy companies wide latitude to claim “trade secret” status for the chemical makeup of their fracking fluids. And at least two states place unreasonable restrictions on doctors and other health officials who learn about any of these “proprietary” ingredients.
We agree that companies should be allowed to protect the recipes for their proprietary fracking mixes. But regulators need to know all the substances that are being pumped into the ground. In certain cases, where companies demonstrate to regulators a clear need to keep their recipes secret, the amounts of specific ingredients could be shielded from public view -- though still disclosed to officials.
As we have said before, fracking holds great promise: It enables the extraction of natural gas, which is abundant, cleaner to produce and burn than other fossil fuels, and cheap. (On Wednesday, the price dropped below $2 per million British thermal units.) And the gas boom is providing a rare bright spot in a stubbornly sluggish economy.
Yet there are well-founded concerns about safety. Some of the substances used in fracking fluids are relatively benign, such as guar gum; others are more worrisome, like benzene. Poorly constructed wells, improper handling of fluids as they return to the surface, or plain, old-fashioned spills can lead to the contamination of water.
It’s little wonder then that even those who support fracking have called for the disclosure of chemicals. To their credit, some companies have gone along willingly, even voluntarily providing information to a public website called FracFocus. But disclosure is spotty, with landowners and concerned citizens in some areas getting much better information than others.
Enter about a dozen states that have sought to address this failing by adopting disclosure laws. Wyoming, one of the first, requires companies to tell the state exactly what’s in their secret mixes. And any request to treat an ingredient as “proprietary” -- by shielding it from public view -- must be approved by regulators.
In practice, however, the state is giving companies too much discretion. Over the past two years, Wyoming’s Oil and Gas Conservation Commission has granted at least 50 exemptions for “trade secret” protection, often based on thin reasoning, according to a lawsuit against the commission filed earlier this year by environmental groups.
Pennsylvania and Colorado also require companies to report the chemicals they use. Yet companies can keep these ingredients to themselves simply by telling regulators the information is “proprietary.” Then, they do not have to disclose the ingredients to the state unless they receive a written request in the event of a spill or other incident.
More troubling, those states handcuff health officials. A doctor who may have concerns about an ill child who has been playing near a drilling rig can request information about the secret chemicals being used there. But he has to promise in writing not to tell anyone else what he learns -- even if he believes other people are at risk.
It’s clear that a federal law is necessary. Groundwater knows no boundaries and what happens in one state can affect other areas.
Federal regulators should require that companies disclose every ingredient in their fracking fluids, along with concentration levels. To protect trade secrets, companies should not have to reveal what purpose the substance serves (it shouldn’t matter to the public whether it is a gelling agent, prevents bacteria or increases viscosity). And federal regulators should keep confidential the relative amounts of each ingredient if operators can demonstrate the need for a proprietary exemption.
Shale gas is not a perfect fuel, but the risks of extracting it can be mitigated with proper oversight. Federal regulators should act quickly to help assuage growing public concerns so that we can all benefit from fracking’s potential.
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