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NC fracking rule pulled after Halliburton objects

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RALEIGH, N.C. (AP) — A new rule set for approval by the North Carolina Mining and Energy Commission requiring some disclosure of chemicals used in hydraulic fracturing has been withdrawn at the request of industry giant Halliburton.

The News & Observer of Raleigh reported Thursday that the state commission had been set to vote on the new rule Friday. The standard spells out which chemicals operators must publicly disclose when drilling natural gas wells.

But commissioners were surprised to learn the rule was pulled from their agenda last minute so that it could be reworked by staff at the North Carolina Department of Environment and Natural Resources. The commission had already approved the standard in committee.

"Is this the way the commission is going to work?" asked Commissioner Charlotte Mitchell, a Raleigh lawyer. "There seem to be conversations happening offline and not in public about this rule that has already come out of committee."

Lawyers for Halliburton say regulations requiring disclosure of chemicals pumped into the ground during drilling would reveal trade secrets. Landowners and environmentalists, pushing for public disclosure, worry about the potential for groundwater and well contamination.

Hydraulic fracturing, which is also called fracking, uses dozens of chemicals, ranging from products used as food additives to industrial toxins and carcinogens. The additives are used to maintain fluid consistency, prevent well corrosion and to kill bacteria.

North Carolina is believed to have a small region with shale gas, concentrated around Lee, Chatham and Moore counties. But the precise amount of gas in the ground will not be known until drillers sink test wells.

The developments raise questions about the independence and integrity of the state commission, a panel created by the legislature last year to create safety rules for shale gas exploration. Hydraulic fracturing refers to fracturing shale rock formations using high-pressure water and chemicals to release the natural gas trapped inside.

The rule-writing panel is under intense pressure from the Republican-controlled legislature to create rules that don't discourage hydraulic fracturing and energy exploration. Those pressures were exposed in full view this year when legislation was proposed to remove two members from the commission, including the state geologist.

The chemical disclosure rule, as approved March 25 by the commission's Environmental Standards Committee, would exempt certain chemicals from public disclosure if the company demonstrated they are trade secrets. But the rule is contentious because it would require operators to submit those trade secrets under seal to the N.C. Department of Environment and Natural Resources, in case the data is needed to treat injuries during an emergency.

Agency officials, however, don't want to keep sensitive data on file because the information is a likely target for legal challenges. And Halliburton doesn't want the government to safe-keep proprietary information that competitors could try to pry loose under freedom of information laws.

Halliburton's local lawyer, D. Bowen Heath of the McGuireWoods firm in Raleigh, referred questions to the Texas corporation's media department. Halliburton spokeswoman Susie McMichael said by email that key people were in meetings or traveling.

Mitch Gillespie, assistant secretary at DENR, later confirmed that the agency and Halliburton don't want the government safekeeping sensitive information, but declined to elaborate.

"The process is ongoing," he said.

Commissioner Amy Pickle, state policy program director at Duke University's Nicholas Institute for Environmental Policy Solutions, was also frustrated that the commission's work is subject to veto by the energy industry.

"I'm very sensitive to surprising the public, the (lack of ) transparency, and wasting time," Pickle said. "This rule does not have full support in conversations that are taking place outside this process."


Copyright 2013 The Associated Press