Texas And Colorado Adopt Far-Reaching Hydraulic Fracturing Chemical Disclosure Rules

On December 13, 2011, Texas and Colorado agencies adopted far-reaching rules governing the disclosure of chemicals contained in hydraulic fracturing fluids. Both rules require oil and gas operators to disclose on a national public website, FracFocus (fracfocus.org), chemical ingredients and water volumes used to hydraulically fracture wells within their respective states. The Texas Rule applies to hydraulic fracturing treatments performed on a well with an initial drilling permit issued on or after February 1, 2012. The Colorado Rule applies to hydraulic fracturing treatments performed on or after April 1, 2012.

Required Disclosures – Texas

The Texas rule, codified at 16 Texas Administrative Code §3.29, sets forth disclosure requirements for suppliers, service companies, and operators involved in hydraulic fracturing operations. Specifically, it requires that, no later than 15 days following the completion of a hydraulic fracturing treatment on a well, suppliers and service companies must provide the operator of the well with the identity of each chemical additive and each chemical ingredient intentionally added to the hydraulic fracturing fluid. The list must include any chemical ingredient for which a Material Safety Data Sheet (MSDS) must be prepared pursuant to 29 C.F.R. § 1910.1200(g)(2) and all other chemical ingredients that were intentionally included in, or used for the purpose of creating, a hydraulic fracturing treatment for the well.

A "chemical ingredient" is defined under the Texas rule as "a discrete chemical constituent with its own specific name or identity, such as a CAS [Chemical Abstracts Service] number, that is contained in an additive." An "additive" is defined as "any chemical substance or combination of substances, including a proppant, contained in a hydraulic fracturing fluid that is intentionally added to a base fluid for a specific purpose whether or not the purpose of any such substance or combination of substances is to create fractures in a formation."

Operators, in turn, are required to submit information to the hydraulic fracturing chemical disclosure registry website of the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission known as "FracFocus," referred to in the rule as the Chemical Disclosure Registry, on or before a well completion report is submitted the Commission. As previously described in our August 31, 2011, V&E Shale Insights – Tracking Fracking E-communication discussing the proposed rule, among other information, operators are required to disclose:

  • Total volume of water used in the hydraulic fracturing treatment or the type and volume of the base fluid, if something other than water is used;
  • Each additive used in the hydraulic fracturing treatment and the trade name, supplier, and a brief description of the intended use or function of the additive;
  • Each chemical ingredient used in the hydraulic fracturing treatment for which an MSDS is required;
  • All other chemical ingredients intentionally added by the operator; and
  • The actual or maximum concentration of each chemical ingredient in percent by mass for which an MSDS is required.

The requirement to disclose the concentration of chemical ingredients in percent by mass is significant; and appears to contradict the language of the statute, which states that the "commission rule shall not require that . . . the concentration of such ingredients be provided." See Tex. Nat. Res. Code Ann. §91.851(a)(1)(E)(iii). The rule, however, does not require disclosure of the concentration of chemical ingredients for which an MSDS is not required, nor does the rule require operators to indicate the concentration of chemical ingredients as they relate to particular additives, thus allaying some trade secret concerns.

Trade Secret Protection – Texas

The Texas rule allows suppliers, service companies, and operators to claim that the specific identity and/or concentration of any additive or chemical ingredient is entitled to trade secret protection and to withhold disclosure of this information on this basis. If a supplier, service company, or operator withholds this information based on a claim that it is a trade secret, the withholding party must disclose to the Commission information that:

  • States that the specific identity and/or concentration of the chemical ingredient are entitled to protection as trade secret information; and
  • Discloses the chemical family associated with the chemical ingredient; or
  • Discloses the properties and effects of the withheld chemical ingredient.

As discussed in our August 31, 2011, V&E Shale Insights – Tracking Fracking E-communication, the Texas rule includes procedures and requirements for challenging a trade secret claim. A request to challenge a party's entitlement to trade secret protection initiates an administrative process through which the party claiming trade secret protection may respond to the challenge and seek to substantiate its entitlement to trade secret protection. Trade secret information may be withheld unless the Office of the Attorney General or a court of proper jurisdiction determines that the information is not entitled to trade secret protection under The Texas Public Information Act (Texas Government Code Chapter 552).

A supplier, service company, or operator, however, may not withhold information related to chemical ingredients used in a hydraulic fracturing treatment, including information identified as a trade secret, from any health professional or emergency responder who needs the information for diagnostic, treatment, or other emergency response purposes.

Required Disclosures – Colorado

Like the Texas rule, the Colorado rule, codified at 2 Colorado Code of Regulations §404-1:205A, requires vendors and service providers to provide the operator of the well with the identity of each hydraulic fracturing additive and each chemical intentionally added to the hydraulic fracturing fluid. Unlike the Texas rule, Colorado allows the vendor or service provider an additional 15 days, for a total of 30 days following the conclusion of the hydraulic fracturing treatment, to make the required disclosure.

A "hydraulic fracturing additive" is defined under the Colorado rule as "any chemical substance or combination of substances, including any chemicals and proppants, that is intentionally added to a base fluid for purposes of preparing a hydraulic fracturing fluid for treatment of a well." A "chemical" is defined as "any element, chemical compound, or mixture of elements or compounds that has its own specific name or identity such as a chemical abstract service number, whether or not such chemical is subject to the requirements of 29 Code of Federal Regulations §1910.1200(G)(2)(2011)."

Within 60 days following the conclusion of a hydraulic fracturing treatment, and no later than 120 days after the commencement of the treatment, the Colorado rule requires operators to complete the chemical disclosure registry form and post the form on the chemical disclosure registry.

Similar to the Texas rule, the Colorado rule requires operators to disclose:

  • Operator name;
  • Date of the hydraulic fracturing treatment;
  • County in which the well is located;
  • API number for the well;
  • Well name and number;
  • Longitude and latitude of the wellhead;
  • True vertical depth of the well;
  • Total volume of water used in the hydraulic fracturing treatment of the well, or the type and total volume of the base fluid used;
  • Each hydraulic fracturing additive used in the treatment, including trade name, vendor, and a brief description of the intended use of function of each additive;
  • Each chemical intentionally added to the base fluid;
  • Maximum concentration, in percent by mass, of each chemical intentionally added to the base fluid; and
  • Chemical Abstract Service (CAS) number for each chemical intentionally added to the base fluid.

The Colorado rule goes beyond the Texas rule, requiring disclosure by concentration of each "chemical" intentionally added to the base fluid, regardless of whether the chemical is considered hazardous in the workplace (i.e. for which an MSDS is required). Neither the Texas rule, nor the Colorado rule, require the operator to identify the name of the product, or additive to which the disclosed chemical/chemical concentration is a component.

Trade Secret Protection – Colorado

Similar to the Texas rule, the Colorado rule provides that a vendor, service provider, or operator may claim that the specific identity and/or concentration of a chemical is/are entitled to trade secret protection and withhold disclosure of this information on this basis. Any such claim must certify under penalty of perjury that the specific identity of the chemical and/or chemical concentration is a trade secret by submitting a Form 41 Claim of Entitlement to the Colorado Oil and Gas Commission.

All operators must disclose to the registry all information required under the rule that is not claimed to be a trade secret, and must also include in the chemical registry form the "chemical family or other similar descriptor" associated with the trade secret chemical.

A vendor, service company, or an operator must identify "the specific identity and amount of any chemicals claimed to be a trade secret" to any health professional who requests such information in writing if the health professional executes a confidentiality agreement and provides a written statement that:

  • The information is needed for purposes of diagnosis or treatment of an individual;
  • The individual being diagnosed or treated may have been exposed to the chemical concerned, and
  • Knowledge of the information will assist in such diagnosis or treatment.

Likewise, a vendor, service company, or operator must provide the specific identity and concentration of a chemical claimed to be a trade secret to the Colorado Oil and Gas Commission upon receipt of a letter stating that such information is necessary to respond to a spill or release, or a complaint from a person who may have been directly and "adversely affected or aggrieved" by a spill or release.

What This Means to You

The Texas and Colorado rules are two of the most comprehensive chemical disclosure rules for hydraulic fracturing fluids. Other states are likely to follow with their own rulemakings and interested parties should participate in the public comment process as new proposed rules are published in other jurisdictions. Additionally, interested persons should pay close attention to the implementation of the new Texas and Colorado rules and particularly efforts to make public that information claimed as trade secrets.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.