California Fracking Rules Plan Stirs Trade Secrets Fight

California Fracking Rules Plan Stirs Trade Secrets Fight by Alison Vekshin, April 24, 2013, Bloomberg
A California proposal to regulate the chemicals used by oil companies in hydraulic fracturing is stirring a battle over industry assertions of trade secrets protection and environmentalist calls for disclosure to shield public health. State officials developing rules for fracking say they have to walk a fine line to avoid lawsuits by both the public and the industry, circumscribing their proposal.
“What we’re doing with the regulation is limiting how often we would get sued,” said Jason Marshall, chief deputy director of California’s Conservation Department, which oversees oil and natural gas production.
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California’s initial proposal on fracking, released in December, would call for companies to disclose a trade secret to a public agency if it’s needed to investigate or respond to a spill. It would also require disclosure to a physician to diagnose or treat a patient or respond to a medical emergency. “We would be having it available when we need it,” Marshall said. “The operators are required to maintain that information, they just don’t have to tell it to us until we need it as regulators.” California’s constitution requires public access to government records unless exempted by law. The agency could face a lawsuit from the public if it withheld requested data, or a lawsuit from an oil company for violating trade-secret protections if it released the information.
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Houston-based Halliburton Co. (HAL), the world’s largest provider of hydraulic-fracturing services, spends years and millions of dollars developing its products, spokeswoman Susie McMichael said. There are different fracturing-fluid formulas for different geological formations, she said. “If disclosure requirements from governing bodies took away protection for this intellectual property, requiring that certain ingredients and recipes of these products had to be publicly disclosed, Halliburton’s competitors could use the information to unlock our proprietary product formulas,” McMichael said. [Emphasis added]