May 22 The North Carolina Senate on Thursday
voted to make it a crime to disclose the chemicals used in
hydraulic fracturing, or fracking, even as big U.S. oil
companies elsewhere consider releasing more information about
the fluids to address public concerns about the environment.
The legislation, proposed by three Republican state senators
and passed by a vote of 35-12, aims to protect trade secrets
about fluids used to extract oil or gas from wells using
fracking, which blasts sand, water and chemicals deep beneath
the earth's surface.
Environmentalists concerned about groundwater contamination
and health risks want more information made public.
Under the "Energy Modernization Act," a state geologist
would be the custodian of confidential information about
fracking fluids. The information can be given to healthcare
providers, the public safety department or the fire chief in
case of an emergency.
The bill, which now goes to the House of Representatives,
would make releasing company secrets "knowingly or negligently"
a misdemeanor. The Senate reduced the penalty from a felony in
response to objections from Democratic lawmakers.
The Senate also added a requirement for the geologist to
report any banned chemicals found in the fracking fluids to the
state Mining and Energy Commission.
The U.S. Energy Information Administration says North
Carolina has no oil or natural gas production. The bill's
backers say the regulations will help attract resource
development and jobs.
Oil and gas producers say fracking does not pollute water
and many voluntarily, or following state laws, disclose the
chemicals they use in FracFocus, an online national registry.
U.S. public opinion is divided on fracking, with hundreds of
local jurisdictions banning it, said David Spence, energy
regulation expert at Texas' McCombs School of Business & School
of Law. Opting to punish disclosure of information could fuel
people's fears, he said.
The U.S. Environmental Protection Agency is gathering public
comment on whether to draft rules for chemical manufacturers to
disclose more details about fracking fluids.
"Understanding what chemicals are being used allows testing
to see if these chemicals are actually entering drinking water
sources," said Danielle Fugere, president of environmental group
As You Sow.
Oilfield services provider Baker Hughes Inc has said
it will disclose the fracking chemicals it uses, potentially
prompting other companies to follow suit.
Larger rival Halliburton Co said it would examine
Baker Hughes's new disclosure format, while industry leader
Schlumberger NV said it has followed a similar process
Companies are mostly concerned about protecting the specific
formulas they use in individual wells.
"There is no one uniform voice within industry on this
issue," said Hannah Wiseman, a law professor at Florida State
Critics say FracFocus allows companies to avoid declaring
certain chemicals. As many as 84 percent of the registered wells
invoke a trade secret exemption for at least one chemical, a
U.S. Energy Department Task Force said.
(Additional reporting by Swetha Gopinath in Bangalore; Editing
by Howard Goller and Lisa Von Ahn)