RALEIGH — A state Senate committee voted Tuesday to allow shale gas drilling companies to engage in fracking in North Carolina without disclosing all the toxic chemicals they plan to inject into the ground.
The unexpected move could sideline the N.C. Mining & Energy Commission – which had vowed to write the nation’s strictest chemical disclosure rule – from developing safety standards for one of the most important and controversial aspects of shale gas exploration.
The Senate Committee on Agriculture, Environment and Natural Resources overwhelmingly approved the bill. It would allow energy companies to keep secret the chemicals they use in fracking if they deem them to be competitive trade secrets. The data would have to be revealed in the event of a fracking accident that became a public emergency.
“There is no rule the public cares about more than public disclosure, what is being put in their water,” said Molly Diggins, director of the state office of the Sierra Club. “The path has been toward maximum disclosure. This legislation is a pre-emptive strike to prevent the development of such a rule.”
James Womack, the chairman of the Mining & Energy Commission, said he wasn’t given advance notice on the legislation, which was negotiated without his knowledge.
“I feel, No. 1, a little bit disappointed, and No. 2, blindsided,” Womack said. “We were headed on a full-disclosure path. We can’t knee-jerk a rule into existence and just pass on reviewing trade secrets.”
To become law, the legislation would still need approval from the full Senate and the House. A Senate vote could happen this week. The omnibus bill spans 43 pages and includes a host of environmental provisions.
Womack said the Mining & Energy Commission will continue its discussions of the chemical disclosure issue when it meets this Thursday and Friday in Raleigh.
Fracking refers to hydraulic fracturing, a method of releasing natural gas trapped in deep shale rock formations by blasting the rock with a high-pressure cocktail of water, sand and chemicals.
The N.C. Department of Environment and Natural Resources requested the disclosure rule in the bill that senators overwhelmingly approved Tuesday. Assistant DENR Secretary Mitch Gillespie said the agency’s motive was that it didn’t want to be a repository for corporate trade secrets that could be subject to endless litigation.
“We don’t want to hold a trade secret that’s going to be litigated,” Gillespie said after Tuesday’s vote. “If you got attorneys that are disagreeing, then you know there’ll be litigation.”
Womack, a Lee County commissioner and Army veteran who earned a Bronze Star in Operation Desert Storm, called the trade-secret exemption a cop-out.
“You can’t have the industry come in and say, ‘It’s a trade secret so I’m not going to disclose it,’ ” he said. “Someone needs to verify the assertion of a trade secret; otherwise it’s ripe for exploitation.”
House Bill 94 would allow property owners affected by drilling to challenge trade-secret claims in N.C. Business Court, an option Womack finds unrealistic for a private citizen.
Supporters of fracking have said it’s important to prevent rules from becoming so onerous that they discourage energy exploration in the state. In 2005, Congress exempted the shale gas industry from disclosing chemicals used in hydraulic fracturing. That has resulted in states being forced to create their own standards.
Fracking is under a moratorium in North Carolina until the Mining & Energy Commission adopts rules and the legislature approves those rules. Lawmakers are negotiating a bill that would lift the moratorium in 2015, even if the Mining & Energy Commission hasn’t completed its task of writing 120 fracking rules to ensure public protections and environmental safeguards. The commission, created a year ago, has yet to adopt its first rule.
The creation of North Carolina’s fracking rules is being closely monitored by the energy industry.
The Mining and Energy Commission was prepared to approve its chemical disclosure rule last month, until the effort was sidetracked by industry concerns.
Energy conglomerate Halliburton privately expressed concern to state officials about any requirement that would force drilling operators to disclose their secret formula to competitors.
The Mining and Energy Commission delayed its vote so it could revise the chemical disclosure rule it has been working on for months.
Womack said in recent months he has discussed the complex issue with officials in at least 20 other states as well as representatives of Halliburton and Baker Hughes, two energy companies that produce fracking fluid for the industry. Halliburton’s Raleigh lawyer, D. Bowen “Bo” Heath, who attended Tuesday’s Senate committee vote, declined comment afterward.
“The Mining & Energy Commission’s plan is to move forward with the chemical disclosure rule … until we’re told to cease and desist,” Womack said. “As stewards of the environment, we have a moral, an ethical and a legal obligation to protect the environment of North Carolina.”