It’s considered the home of the oil and gas industry, so it’s of special significance that Texas Governor Rick Perry has signed a law requiring drillers to disclose the chemicals in their so-called “fracking” fluids.
Hydraulic fracturing has led to a new energy boom in America. Hundreds of trillions of cubic feet of natural gas locked up in shale in Texas, Louisiana, Pennsylvania and other states is now being tapped.
Ten years ago, it looked like the U.S. was running out of natural gas and would have to increase imports. Now there is so much of it that terminals built to accept gas from overseas are being converted to export it.
But the fracturing process has been fraught with controversy.
Faulty well casings have allowed natural gas to contaminate aquifers. And several high-profile spills of fracking fluid – the most recent in April in Pennsylvania – have fueled protests against drilling.
The spills are important, because while fracking fluids are 98% water, they also include thousands of gallons of potentially harmful chemicals – which aid the fracturing process – prevent corrosion – and inhibit the growth of algae and bacteria in the well.
Maryland’s Attorney-General has sued the company responsible for the April incident – Chesapeake Energy - because Towanda creek, which the fluid spilled into, empties into the Susquehanna River and ultimately, Chesapeake Bay.
Pennsylvania has recently required drilling companies to disclose the chemicals in their fracking fluid, but the state doesn’t post individual well data publicly. Wyoming and Arkansas have similar regulations.
Some companies, including Chesapeake and Range Resources, voluntarily disclose chemicals in their fluid in either well completion reports on the website RangerResources or on the joint state/industry website FracFocus.
The Texas law ups the ante – in part, because the industry supported it. But the gas companies are not dummies. There are billions of dollars at stake developing a resource that could produce for a hundred years or more. Opposition to fracking is bad for business.
Keeping the chemicals in the frac fluid a secret only fuels suspicion and more opposition.
Not only that, but thanks to the 2005 Energy Policy Act, hydraulic fracturing remains outside the jurisdiction of the Safe Drinking Water Act. The industry isn’t exactly clamoring for new federal regulations, and found disclosure to be preferable to a new push for federal oversight.
The Texas law also allows drillers to withhold information about certain chemicals in their frac fluids if the company declares them to be proprietary.
Companies still have significant leeway to protect their competitive advantage and the public still doesn’t get the whole story – (though landowners who lease to gas companies can get around the proprietary shield to find out what’s being used on their land).
For that reason, environmental groups have only mild applause for the Texas bill. They say it’s a good start, but contains significant loopholes.
It also would not be implemented until 2013, which they believe is too long for no good reason.
Meantime, some companies – which at one time used diesel fuel to help crack wells - are working to make their frac fluids more environmentally friendly.
Range Resources CEO John Pinkerton told me on a visit to his company’s wells in Pennsylvania that his ultimate goal is come up with a non-toxic formula that truly is "green."
“As an industry,” he told me, “one of the things we are trying to do is lessen the use of chemicals that we put in these frac jobs. We’ve gotten our fracs up here to three simple chemicals that are household chemicals that we use every day. And they’re being used in such a diluted form that they would have no issue in terms of human consumption whatsoever.”
Gas companies are acutely aware that bad publicity could shut them down.
New York state has imposed a moratorium on hydraulic fracturing pending an environmental review, keeping thousands of acres of potentially lucrative leases off-limits.
The industry appears to have learned a big lesson from the BP disaster last year. Namely, that tighter regulations – like the new Texas law – are an acceptable tradeoff to keep bad players out of the market and enhance best practices.
Industry analyst Amy Meyers Jaffe of the Baker Center at Rice University agrees.
“The balance has to come on regulation,” she says. “If we learned something from the Macondo [BP] accident last year, it is that if you have the proper regulation, you can avoid something that will stop drilling altogether.”