Secret sauce, setbacks among fracking issues mined

by Michelle Saxton
Wednesday, October 30, 2013

Balancing the public’s right to know and businesses’ right to protect trade secrets regarding chemicals used in fracking and determining setback distances from homes and water were among issues being discussed by North Carolina’s Mining and Energy Commission.

The commission is developing a regulatory program to manage oil and gas exploration and development, including horizontal drilling and hydraulic fracturing — or fracking. The General Assembly must give approval before permits take effect. 

North Carolina has strong laws for both government transparency and trade secret protection, Commission Chairman Jim Womack said Monday, Oct. 28, adding other states’ rules are all over the map, with some allowing full disclosure, some taking an “ostrich-type” approach and most somewhere in the middle.

Mining and Energy Commission members in North Carolina could review trade secret laws and, without taking possession, put trade secrets in escrow so they could be compelled for disclosure if needed in the future, said Womack, a county commissioner for Lee County in the state’s Triassic Basins, a region the state is studying for potential oil and gas resources.

“You just don’t know about some of these chemicals and what the long-term effects could be,” Womack said. “I can’t believe that this state, and I don’t believe we ever will, would ever be satisfied with not ever having access to that information.”

He offered the example of a farmer’s cows that started dying near a well pad years down the road, and the farmer wanted to know what had been pumped in the ground, Womack said.

Trade secrets and public disclosure

An escrow, or electronic lockbox, may be a happy medium, Commission Vice Chairman Ray Covington of Whitsett said.

“In case there’s any type of emergency you want to be able to get to that information as quickly as possible,” said Covington, a North Carolina Oil and Gas partner whose commission membership description includes a nongovernmental conservation interest.

“… We do want full disclosure on what could possibly go into the ground in North Carolina. The question becomes, ‘Who holds those trade secrets?’ Who decides if it actually is a trade secret?”

Commissioners said they want to provide disclosure while also allowing companies to compete after investing time and money developing new technologies and techniques.

“If you want to promote innovation and creativity and encourage companies to develop new ways of doing things you have to protect intellectual property rights so that they at least have some period of time … to employ their new innovation,” Commissioner Charles Holbrook, a geologist retired from the petroleum -industry, said.

Use of any potentially hazardous substances could not be held in confidence from medical or emergency responders in the event of an accident, Holbrook added.

Womack noted 98 to 99 percent of information about what will go in the ground during fracking will be publicly noted on an online chemical registry such as FracFocus. The rest was being debated now, he said.

“Their competition wants to know what’s in the secret sauce,” Womack said of undisclosed chemicals. “Some of them are greener than others, and they don’t want those disclosed to competitors.”

Setback distances

Another rule being discussed deals with setbacks, or distances set between fracking wellheads and water bodies, occupied housing and roads, Womack said.

“I’m insisting that for every setback, we establish that we have a definitive health and safety purpose,” Womack said.

There is very little rationale with how other states came up with numbers for their setbacks, Covington said.

“We’re trying to find the science,” Covington said. 

Some critical issues for surface owners could be noise, dust and light pollution, as well as water concerns, Covington said. 

Other issues

Fracking should not affect coastal areas like New Hanover County, Womack said, adding there was no chance the state would pass an injection well rule to deal with fracking waste — a concern state lawmakers addressed earlier this year.

Commissioners were instead writing rules about the treatment and reuse of slick water that flows from wells, Womack said.

“That is the most efficient and effective way of disposing of waste water,” Womack said. “We are not going to allow injection wells to be used in the state.” 

Fracking rules were expected to be completed by mid-fall of 2014, while permits could start being issued between March 2015 and July 2015, Womack said.

Commissioners last met Oct. 24-25; their next meeting is scheduled for Nov. 21-22.

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