A heated debate ensued Wednesday during a hearing on House Bill 448 requiring operators of oil or gas wells using hydraulic fracturing treatments to mail residents within 500 feet of the site a list of chemicals used in the fracturing process.
Filed by Rep. Dawnna Dukes (D-Austin), the bill was presented to the House Committee on Energy Resources by Rep. Lon Burnam (D-Fort Worth) Wednesday.
Burnam began by saying the distance of 500 feet was so small, that “one could argue that it shouldn’t be allowed, but that’s not what this bill is about. This bill is just saying that they have the right to know.”
“This one’s a no-brainer,” Burnam said, explaining that it would build on the disclosure requirements passed last session. “This bill protects private property rights, the right to know.”
Under HB 448, the Natural Resources Code would be amended, requiring an operator of a well on which a hydraulic fracturing treatment is to be performed, to mail each person residing within 500 feet of the well a list of the chemical ingredients that the operator anticipates will be used in the fracturing treatment and require that the notice be mailed no later than 30 days before the fracturing process begins.
However, the code also would allow the operator to withhold and declare the identity of a chemical ingredient anticipated to be used a “trade secret,” and the person to whom the notice is required to be sent to may challenge the trade secret protection.
As well as a mailed notice, the operators of the wells using fracturing treatments must post a list of the chemicals to be used online.
“This is so that likely consumers of water know what’s going on with the fracturing process,” Burnam said.
Cyrus Reed, Conservation Director of the Lone Star Chapter of the Sierra Club, testified for the bill Wednesday, saying that if passed, Texas would be one of five states with this requirement.
“Most states do not require pre-fracking chemical disclosure but some are starting to: Arkansas, Montana, West Virginia in certain cases and Wyoming. There is a precedent for doing this.”
With regard to the trade secrets outlined in the code, Reed said, “We were supportive of trade secrets in certain situations, but there’s no check.”
Reed explained that the only check is when the property owner decides to challenge the trade secret.
Dukes’ bill would not change current state law, but it would give a pre-notice of the additives being used before fracking occurs. Currently the information on the additives used in the treatment are available online after the treatment has occurred.
“There’s a lot of noise out there on whether fracking is safe or not safe and whether it could contaminate water or it couldn’t, and by disclosing that information, it’s a good way for people to actually test water and see in fact if there are any problems with contamination,” Reed said.
Mari Ruckel, vice president of governmental and regulatory affairs for the Texas Oil and Gas Association, testified against the bill, pointing out that in the last session, when HB 3328 filed by Rep. Jim Keffer (R-Eastland) was passed, Texas became the first state to require a well-by-well disclosure of all the constituent chemical compounds and water volume contained in fracking fluids, which is available online after the process has occurred.
“We find this problematic,” Ruckel said. “Operators don’t know what the situation is 30 days ahead of time — what water sources are going to be used, and different water sources require different chemicals. They have the information post-frack. That’s why it’s required with the completion report to the Railroad Commission.”
Burnam was not convinced, saying “surely at some point in time the industry knows what fracking materials will be used before they actually do it.”
“They have an idea, but it’s not exact,” Ruckel said.
The list of chemicals vary from well to well, which chemicals are used and in what amounts, and as Ruckel tried to convey, operators would not know 30 days before the fracturing treatment which chemicals they will be injecting into the ground.
Keffer, chairman of the committee, noted that the operator is ultimately the person liable, but there is a service company involved.
“Things do happen where they may not know the exact issue. Then if you’re giving a mailing out and you leave off something, are you opening yourself up for liability in that regard?” Keffer said.
Sharon Wilson of the non-profit organization Earthworks also testified in support of an anticipated list with no liability.
Wilson became involved with Earthworks after living around a shale extraction site for 16 years and losing $80,000 in property value.
“When your water is contaminated, your property is completely worthless,” said Wilson.
Wilson described that in one case, post-fracking water samples had been done less than a year later and high levels of MTBE (methyl tertiary butyl ether), an additive in diesel fuel, were found resulting in a 75 percent reduction in property value.
A Congressional investigation found that between 2005 and 2009, 32 million gallons of diesel were used in hydraulic fracturing fluids in 19 states. Half of that, 16 million gallons, was used in Texas.
“When landowners have proof of contamination, they sue, there’s a settlement and then a non-disclosure agreement,” Wilson said. “Those records, including all test results, are sealed forever. This pattern allows industry to continue to say they have been fracking for decades and there has never ever been one case of documented water contamination. Citizens are largely on their own when it comes to grappling with the oil and gas industry. The least the state of Texas can do is provide fair warning that they’re coming.”
Teddy Carter, vice president of Government Affairs for the Texas Independent Producers and Royalty Owners Association, testified against the bill.
“HB 3328 last session was highly debated among environmental groups and industry groups,” he said. “We believe it’s something to be proud of.”
“As far as what some refer to as a ‘trade secret loophole’ — that is current law for regulating any trade secret, regardless if it’s oil and gas or soda manufacturers. It would be a loophole for anybody that is subject to trade secret challenges,” Carter said.
“If the goal of giving the prior notice to know ahead of time what might be used is in order to initiate trade secret challenges, I would worry that would have the potential to hold up operations. It makes more sense to me to challenge based on what you know was used,” Carter said.