OIL AND GAS:

Final Ohio drilling bill dampens Kasich's robust chemical disclosure plans

Drilling rules first regarded by some environmentalists as pioneering emerged from the Ohio Legislature last week without the full oomph some activists had expected.

The rules, included in a broad energy bill supported by Republican Gov. John Kasich, address chemical disclosure, water quality testing and other oil and gas drilling issues that have arisen in the state's newly bustling portions of the Marcellus and Utica shale formations.

Kasich's original proposal would have required the disclosure of fluids used throughout the life of a well, during drilling, stimulation, production and plugging.

"The important thing Governor Kasich did is reframe the debate and put a spotlight on the fact that we need to be looking at more than just hydraulic fracturing fluids," said Matt Watson, a senior energy policy manager for the Environmental Defense Fund.

But during negotiations, legislators bowed to industry pressure and softened the disclosure requirement. Disclosure will now be required only during well stimulation -- which includes hydraulic fracturing, itself -- and until surface casing is installed in the well (surface casing is the upper section of piping that lines a well to keep fluids from contaminating soil or groundwater).

Under the new legislation, drillers will not have to disclose fluids used while lower bits of casing are yet to be added. Chemical-laced fluids used to enhance production and plug the well would also not have to be disclosed.

Watson said EDF was disappointed that the final version of the bill did not live up to Kasich's original proposal, which would have been the most robust state disclosure requirement for drillers. But, he said, the proposal at least shed light on the need for comprehensive chemical oversight (EnergyWire, April 30).

"The fact is that Ohio cracked the door open on a very important conversation," Watson said. "These chemicals can find their way into the environment at any point in the production process."

How secret is a trade secret?

Another fiercely debated element of the chemical disclosure language was the strength of a trade secret exception. Under Kasich's proposal, chemicals used in the drilling process that are considered proprietary would be protected but still reported to the state's Department of Natural Resources. The information's classified status would then be subject to challenges by anyone under public records laws.

But the final bill eliminates the department's role. Instead, companies can keep trade secrets to themselves but are required to reveal them to the state during an environmental or health emergency. Landowners and few others can challenge the trade secret claims.

"That was the straw that broke the back for us," said Ohio Environmental Council attorney Trent Dougherty. "We couldn't fully support [the bill] with that language in it."

Industry representatives, on the other hand, were pleased with the final iteration of the rules.

"We believe that the legislation is balanced," said the Ohio Oil and Gas Association in a statement, "and will help provide the public with the information that they require, while protecting the competitiveness of the state's oil and gas industry."

Despite the changes to his proposal, Kasich praised the final bill, which also includes a clean energy standard.

"I'm so excited about what this legislation accomplishes and what it means for Ohio's future," he said in a statement. "Because we were able to come together and look at energy consumption and production from every angle -- from shale gas to waste heat to work force training to alternative fuels and renewables -- we've accomplished something truly unprecedented."

The bill now awaits Kasich's signature.