Texas Railroad Commission Adopts Hydraulic Fracturing Chemical Disclosure Rule, Effective February 1, 2012

December 14, 2011 Authors: Barclay Richard Nicholson, Andrea Fair

On December 13, 2011, the Railroad Commission of Texas adopted the Hydraulic Fracturing Chemical Disclosure Rule, pursuant to HB 3328 passed by the Texas Legislature in June 2011.[1] Although the Legislature required the regulations to be adopted by July 1, 2013, the Railroad Commission issued proposed regulations and approved the Rule in less than six months.[2] The adopted Rule requires operators to disclose chemical ingredients—with exemptions for trade secrets—and water volumes used in hydraulic fracturing activities in Texas.[3] It will apply to all wells for which the Railroad Commission issues an initial drilling permit on or after February 1, 2012.[4] Disclosure must be made to the hydraulic fracturing registry site http://fracfocus.org.

Also on December 13, 2011, the Colorado Oil and Gas Conservation Commission adopted hydraulic fracturing disclosure regulations.[5] Like Texas, Colorado's regulations require disclosure of chemical ingredients and water volumes. Unlike Texas, the regulations further require disclosure of concentrations of chemicals in hydraulic fracturing fluid.[6] Additionally, if an operator is granted trade secret protection, the chemical family name of each ingredient must still be disclosed.[7] Colorado's regulations take effect on April 1, 2012 and apply to all wells hydraulically fractured in Colorado. Disclosure must be made within 60 days of completion of hydraulic fracturing to http://fracfocus.org.

Texas and Colorado join approximately thirty states that have enacted or proposed regulations affecting hydraulic fracturing activities.[8] Eight of those states have established or proposed new regulations since June 2011: Michigan, Montana, Louisiana, New York, North Dakota, Idaho, Texas, and Colorado. Recently, New York extended the public notice and comment period for its proposed regulations from December 12, 2011 to January 11, 2012.[9] Michigan, Montana, and Louisiana issued their regulations, effective during the summer and fall of 2011, joining Arkansas, Wyoming, and Pennsylvania as states with regulations in place designed specifically to address hydraulic fracturing.[10]

The states with applicable rules vary in what aspects of hydraulic fracturing activities are controlled and how those activities are regulated. Some regulations focus on specific disclosure requirements, such as Texas and Colorado; some focus on construction and casing requirements; some focus on operation and continued monitoring of the wells; and others focus on flowback water storage and removal.

This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) and Andrea Fair (afair@fulbright.com or 713 651 3782) from Fulbright's Litigation Practice Group and Heather M. Corken (hcorken@fulbright.com or 713 651 8386) from Fulbright's Environmental Law Practice Group.

Learn more about Fulbright's Shale and Hydraulic Fracturing Task Force at www.fulbright.com/fracking.

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[1] Press Release, R.R. Comm'n of Tex., Railroad Commissioners Adopt One of Nation's Most Comprehensive Hydraulic Fracturing Chemical Disclosure Requirements (Dec. 13, 2011), available at http://www.rrc.state.tx.us/pressreleases/2011/121311.php. The new rule will be available at http://www.rrc.state.tx.us/rules/index.php one week after the effective date of adoption.
[2] See HB 3328, 2011 Leg., 82 Sess. (TX 2011), available at http://www.capitol.state.tx.us/tlodocs/82R/billtext/pdf/HB03328F.pdf#navpanes=0. The proposed rule, issued in September 2011, is available at http://www.sos.state.tx.us/texreg/pdf/backview/0909/0909prop.pdf.
[3] Press Release, R.R. Comm'n of Tex., supra note 1.
[4] Id.
[5] P. Solomon Banda, Colorado to Require Disclosure of Fracking Chemicals, USA TODAY (Dec. 13, 2011), available at http://www.usatoday.com/money/industries/energy/story/2011-12-13/colorado-fracking-two/51882992/1. Audio of the rulemaking deliberations is available at http://cogcc.state.co.us/.
[6] P. Solomon Banda, supra note 5.
[7] Id.
[8] This count incorporates general regulations that expressly include hydraulic fracturing, as well as specific hydraulic fracturing regulations. The proposed rule amendments are available at http://cogcc.state.co.us/RR_HF2011/FinalModifiedStaffProposal12_13_11V4.pdf.
[9] See High Volume Hydraulic Fracturing Proposed Regulations, NEW YORK DEP'T OF ENVTL. CONSERVATION, http://www.dec.ny.gov/regulations/77353.html.
[10] See 25 Pa. Code §78.55 (as part of the permitting process, drilling companies must disclose the names of all chemicals to be stored and used at a drilling site in the Pollution Prevention and Contingency Plan submitted to the Department of Environmental Protection); Wy. Oil & Gas Comm'n § 3-8(c) (operators must disclose chemical additives and proposed concentrations in the Application for Permit to Drill or Deepen); Ariz. Admin. Code § 12-7-117 (operators of wells using "artificial stimulation" must report the amount and types of material injected within 15 days of the procedure).