Published on April 27th, 2014 | by Tina Casey13
Baker Hughes Pledges Fracking Chemical Disclosure With Loophole
April 27th, 2014 by Tina Casey
The tubes are buzzing over the news that Baker Hughes, a major global oil and gas services company, has announced plans to voluntarily disclose the chemicals it uses in fracking fluids. That seems like a major step in the right direction, but if you look at it in the context of the Interior Department’s proposed new rules for fracking on federal public and Native American lands, there ain’t much there there.
For those of you new to the topic, fracking is an unconventional method of oil and gas drilling that involves pumping massive amounts of chemical brine underground. The voluntary disclosure thing is a big deal because fracking won a mandatory disclosure exemption from the federal Clean Water Act under the Bush/Cheney administration. Secrecy over the composition of fracking fluid has enabled the practice to continue with little opportunity for federal oversight despite mounting evidence of health and environmental impacts.
Baker Hughes And Fracking Disclosure
Baker Hughes certainly got some great publicity out of its announcement. For example, here’s how our friends over at Bloomberg.com reported it, under the headline “Baker Hughes Plans to Disclose All Fracking Chemicals:
Baker Hughes Inc. (BHI) plans to disclose all of the chemicals used in the rock-cracking technique used to unlock oil and natural gas from underground.
The world’s third-largest oilfield services provider hasn’t disclosed all of the ingredients used in fracking fluids in the past, citing competitive reasons, Melanie Kania, a spokeswoman for the Houston-based company, said today in a phone interview.
The article does go on to mention that the new policy hasn’t been fully hammered out yet with the supply chain, which leaves the door open for something that Kania apparently apparently did not disclose in that phone interview, namely, that the new policy includes its own mile-wide disclosure loophole.
Here’s the relevant bit from the Baker Hughes website (break added for readability):
Baker Hughes believes it is possible to disclose 100% of the chemical ingredients we use in hydraulic fracturing fluids without compromising our formulations – a balance that increases public trust while encouraging commercial innovation.
Where accepted by our customers and relevant governmental authorities, Baker Hughes is implementing a new format that achieves this goal, providing complete lists of the products and chemical ingredients used.
See what just happened here? Apparently deploying the Hobby Lobby concept of corporate personhood, basically all Baker Hughes is saying is while he/she “believes in” 100 percent disclosure, he/she is only going to apply that belief under specific circumstances, namely, when the customer agrees to it within the existing regulatory framework.
Baker Hughes does endorse FracFocus.org, an industry-funded disclosure registry, but that registry accommodates trade secrets.
The Fracking Chemical Disclosure Loophole
That pretty much leaves us right back where we started as far as EPA is concerned, since fracking already won its loophole from the Clean Water Act.
On the other hand, the Interior Department could update its 30-year-old fracking regulations for federally owned lands and Native American lands through the Bureau of Land Management, and that’s what is going on right now.
In 2012 DOI proposed new regulations including a public disclosure requirement, but unfortunately it included a mile wide loophole for trade secrets (see page 8):
The revised proposed rule allows operators to submit to the BLM an affidavit asserting exemption from disclosure of certain information having to do with the hydraulic fracturing fluid. The rule also gives the BLM the ability to demand the specific chemical details of any materials being proposed for trade secret exemption.
So, at best BLM could ask for trade secret disclosure on a case by case basis. That’s a pretty cumbersome ask considering that the proposed regs did not require any disclosure until after the operation is complete (yes, after).
It’s also cumbersome considering the number of wells involved. According to BLM, there are more than 92,000 oil and gas wells already drilled on public land, about 90 percent of which are fracked, with more coming on board every year.
Last summer, DOI issued a revised draft of the proposed regulations clarifying that the disclosure requirement will be in a format consistent with FracFocus.org (see p. 30), but unless we missed something that case-by-case trade secrets exemption is still in there.
If you’ve looked at the revised proposed rule and you have a correction, drop us a note in the comment thread and we’ll go back over that again.
Winning The Fracking PR Wars
Despite all the glowing headlines and a statement of encouragement from the Energy Department’s Deputy Assistant Secretary Paula Grant (still trying to figure out where that came from, help us out if you have an original source), Baker Hughes still seems to be holding its trade secrets close to its vest.
However, at least the publicity puts some pressure on other oil and gas service companies to make a disclosure statement of their own, and when they do we’ll take a look at that, too.
Meanwhile, the final rule is expected by the end of the year.
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