REGULATION:

Fracking trade secrets would get no protection under draft Alaska rule

Companies will not be able to keep trade secrets for hydraulic fracturing ingredients if a proposed Alaska rule is adopted.

The chemical disclosure rule, part of draft fracking regulations released late last month by the Alaska Oil and Gas Conservation Commission, is similar to other states' orders in every way except one major issue: trade secret exemptions.

In other states that require operators to report what they use in drilling, exemptions allow companies to withhold information they consider proprietary. Environmentalists have derided trade secret allowances as loopholes that allow industry to put unknown toxins in the ground, while operators have defended the exemptions as crucial to having a competitive edge on other drillers (EnergyWire, Sept. 26, 2012).

Cathy Foerster, one of three commissioners of the state agency, took the lead on developing the rules and said a trade secret exemption clause was left out on purpose. If oil and gas companies want the commission to consider a provision, she said, they can advocate for themselves at a public hearing scheduled for Feb. 5.

The Alaska Oil and Gas Association and the American Petroleum Institute did not respond to requests for comment, but it is likely that industry representatives will put heavy pressure on the commission to include trade secret protections.

Beyond that, the chemical disclosure language follows familiar lines. Drillers would have to disclose fracking fluid ingredients on the industry-supported website FracFocus.org, including the volume, description and Chemical Abstracts Service number.

Many Alaska operators already voluntarily disclose some fracking chemicals on FracFocus, but environmental watchdogs have criticized the website for using PDFs to present information, making it difficult to search and analyze data.

The suite of fracking rules proposed also addresses landowner notification, water testing and well construction standards. Foerster said the rules were developed to ease any public concern over fracking that takes place regularly on about 20 percent of conventional wells in Alaska, and to set the regulatory stage for any increase in unconventional drilling that would occur if more shale exploration is done in the North Slope. Shale wells would all be fractured.

"This will give the public ... an easy way to understand that we are regulating and that we are protecting all the things that matter," she said.

The North Slope region is home to a shale play that the U.S. Geological Survey has estimated to contain up to 2 billion barrels of oil and 80 trillion cubic feet of gas. For shale oil, that's second only to the prolific Bakken Shale in North Dakota. But the agency cautioned that the figures are uncertain, as the deep rock is untested.

According to the proposed rules, drillers would have to give notice to all landowners and operators within a quarter-mile of the well's path before fracking it. That path could be a long one in shale drilling, where fracking is often paired with horizontal drilling, which creates well bores that can run sideways for a mile or more.

Drillers in Alaska's shale would also have to evaluate nearby aquifers and take samples from water wells before and after completing an oil and gas well, testing for metals, methane, dissolved solids and other contamination indicators.

The rules would also beef up existing well construction standards in Alaska, requiring drillers to pressure-test well casing, evaluate well site geology to ensure that fluids don't pollute water and soil, and consider fault lines that could lead to seismic activity at the fracture site.

The oil and gas commission will hold a public hearing on the proposed rules next month.

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