Wyoming Fracking Law Keeps Too Many Chemicals Confidential, Environmental Groups Allege

By Laura Zuckerman

SALMON, Idaho, March 26 (Reuters) - Environmental groups are asking a state court to force Wyoming to provide a more complete list of chemicals used in hydraulic fracturing, or fracking, a drilling technique vital to natural gas and oil production in the state.

Wyoming in 2010 became the first state to require disclosure of chemicals that energy companies inject - along with sand and water - deep underground to free gas or oil from rock. But the state exempted products and chemicals that qualified as confidential commercial information, or trade secrets.

The Wyoming Outdoor Council and others contend in a legal petition in state court that the Wyoming Oil and Gas Conservation Commission has illegally allowed energy drillers to claim exemptions where they were not warranted.

The groups claim such secrecy is impeding efforts to protect public health and water quality.

"There are 150 chemicals in Wyoming that these companies have asked to be protected under trade secret status," said Steve Jones, watershed program protection attorney for the Wyoming Outdoor Council.

"Since these chemicals pose a potential threat to ground water and to people's heath, we need to know what they are."

The court challenge in Wyoming may have broader implications as other states, including Pennsylvania and Texas, have adopted similar standards for disclosure.

Fracking and other drilling advancements have unlocked vast supplies of domestic natural gas, but health and environmental groups worry fracking operations near homes and schools can polllute air and water.

The effort to force disclosure comes after the U.S. Environmental Protection Agency agreed earlier this month to work with Wyoming to retest water supplies in Pavillion, the Wyoming town where a 2011 EPA draft study linked natural gas fracking to pollution of a nearby aquifer.

Industry representatives said disclosure of so-called "recipes" will hamper marketplace-driven efforts to develop more benign - or greener - fracking chemistry.

"If companies can't get the benefit of their intellectual capital, we don't get the benefit of their innovation," said energy company advisor Jason Hutt of Bracewell & Giuliani LLP, an international law firm headquartered in Texas.

The outdoor council, Powder River Basin Resource Council and others are asking a Wyoming judge to find that the state Oil and Gas Conservation Commission's actions in granting trade secret exemptions in certain cases were "arbitrary, capricious, an abuse of discretion" or otherwise illegal.

They also are asking the court to set aside the commission's approval of insufficiently supported and overly broad exemptions and to make new findings that abide by Wyoming's public records law and environmental rules.

Wyoming Governor Matt Mead, chairman of the commission, on Monday said the state's "well done" disclosure requirements were crafted under the principle that states, rather than the federal government, should regulate hydraulic fracturing.

"We will watch this case closely to determine if either the rules or the administration of the rules need work. If improvements need to be made we will make them," he said in a statement.

Wyoming has been at the center of a national debate over fracking since the release in December of the EPA draft report suggesting fracking fluids likely contaminated the aquifer in Pavillion. The study was launched after area residents complained about the smell and taste of drinking water from private wells.

The industry and the state, which produced 10 percent of U.S. natural gas in 2010, criticized the report and asked for more state participation and more sampling in another study, which is now under way. (Reporting By Laura Zuckerman; Editing by Richard Pullin)