LITTLE ROCK — The Arkansas Oil and Gas Commission is in the final stages of formulating a rule to provide more information about chemicals used in natural-gas wells.
Arkansas would be the second state to implement this kind of measure, as states and the federal government address worries about how the process of natural-gas drilling might affect the environment, including drinking water.
Federal legislation that would require companies to disclose the chemicals they use in hydraulic fracturing has been introduced in Congress, and Amy Mall, senior policy analyst with the National Resources Defense Council, said several states, including Pennsylvania, are considering similar rules.
Last month, Wyoming approved a measure that requires operators to disclose all chemicals used in “fracking.”
Kent Walker, a Little Rock attorney whose clients include landowners and small businesses dealing with natural-gas issues, said more transparency about drilling chemicals is important for landowners, particularly in case of spills.
“After the gas companies are gone, that’s still their property. [Landowners] should have the accessibility and understanding of what’s being put in the ground that they own, and, more importantly, once thegas companies leave, what remains there,” he said.
Under the Arkansas rule, the operator would report the specific names and concentrations of the chemical additives in the fluid it used in the hydraulic fracturing process, said commission Director Larry Bengal, who proposed the rule in August.
This information would be available on the commission’s website, so people can see what chemicals were used in any given well.
The rule also mandates that well operators provide information before beginning hydraulic fracturing to show that well casings can withstand pressure and won’t leak fluids.
Hydraulic fracturing is a method of extracting natural gas from shale rock formations underground. Millions of gallons of a fluid composed of water, sand and other chemicals are pumped into a well to break apart the rock and allow natural gas to flow freely. The process as part of horizontal drilling of gas wells has made development of shale resources around the country more economical, including in the Fayetteville Shale in north-central Arkansas.
The month-long public comment period on the proposed Arkansas rule will end Monday. Then commission staff could make adjustments and respond to comments before the nine commissioners vote on the final rule in December.
Shane Khoury, the Oil and Gas Commission’s deputy director and general counsel, said he’s “fairly confident” the commission will approve the rule - it already approved the current version before sending it for public comment. But if the commission staff proposes amendments in response to public comments, he said, there is a chance that could spur more discussion.
The rule must then be reviewed by the Legislature’s rules committee, which does not have approval authority. The earliest it could go into effect is mid- to late December, Khoury said.
Fracking fluid, according to information on the commission’s website, is more than 99.5 percent sand and water. But it also includes trace amounts of chemicals used to reduce bacteria buildup in the well, reduce friction and prevent corrosion, among other things. A list of 13 broad categories of chemicals used in fracking fluid is available on the commission’s website, aogc.state.ar.us/Fay_ Shale_Data.htm.
Escalating complaints about purported groundwater contamination have fueled concerns about the toxicity of the mixtures. The Arkansas Department of Environmental Quality has inspected hundreds of oil and gas sites but has not found a conclusive link between complaints about water quality and drilling in the shale area.
Mall, of the National Resources Defense Council, an environmental advocacy group, said fracking fluids have in some cases been found to be toxic and have been linked to livestock deaths.
“It’s mostly sand and water, but that’s not a reflection of how toxic or nontoxic it is. Some chemicals are toxic in minute amounts, and we’ve seen examples of that,” she said.
The Environmental Working Group said in January that its investigation into drilling fluids used in hydraulic fracturing found that they often contain petroleum distillates with cancer-causing elements, such as benzene. The Washington, D.C.-based advocacy group has called on the federal government to require companies to disclose the specific chemicals they use.
Until recently, many companies operating in shale formations have been reluctant to release this information, claiming that the mix is proprietary information. But as the federal government has shown more interest in regulating hydraulic fracturing, and amid mounting pressure from environmental groups, that is beginning to change.
Under Arkansas’ proposed rule, the specific formulation of chemicals used in the fluid will still be considered proprietary, and companies will not have to disclose it, Khoury said.
Range Resources Corp., which primarily operates in Pennsylvania’s Marcellus Shale formation, announced in July that it would begin disclosing the chemicals it used in natural-gas wells and posting the information online. Exxon Mobil Corp. Chairman and Chief Executive Rex Tillerson has said he wouldn’t object to more disclosure.
Khoury said the commission has not met resistance from companies operating in the Fayetteville Shale. Chesapeake Energy, the second largest producer in the Fayetteville Shale, said in a prepared statement that it would not oppose the commission’s rule and would comply if it is implemented. Southwestern Energy, the largest producer in the Fayetteville Shale, declined to comment.
“It appears that most companies understand that these requirements are going to be imposed in one form or another,” Khoury said.
The Environmental Protection Agency requested last month that nine drilling companies voluntarily disclose the chemicals they have used in hydraulic fracturing.
The Wyoming law requires producers to release information about the chemicals being used prior to fracking a well, and then again after the process is complete.
Wyoming also asks for a more comprehensive list of chemical additives than Arkansas would, as the rule stands now, Mall said. The Arkansas rule only requires that companies disclose chemicals included in documents called Materials Safety Data Sheets, which are available at drilling sites under Occupational Safety and Health Administration regulations.
The data sheets are not necessarily comprehensive - chemicals that are only used in very small amounts don’t have to be reported, Khoury said.
Khoury said in an e-mail Thursday that the commission staff originally was not aware that there could be chemicals not reported in the data sheets and is considering a proposal to address the issue at the December hearing.
Unless it does, Mall said, the rule is “better than other states that don’t have disclosure requirements, but still not where we’d like it to be.”
A spokesman for the state Environmental Quality Department said the agency became aware of the rule this week and has not reviewed it to decide whether to register a public comment.
The department, which regulates above-ground activities associated with gas drilling, usually only comments on rule proposals when asked to, and has not been contacted about the new rule, spokesman Cecillea Pond-Mayo said Thursday.
Front Section, Pages 1 on 10/30/2010