HYDRAULIC FRACTURING: Public interest trumps trade secrets — law professors by Ellen M. Gilmer, April 4, 2013, E&E News
A group of law professors are urging Alaska regulators to fend off industry pressure for the state to allow secret status for some chemicals used during hydraulic fracturing. Ten professors specializing in intellectual property and trade secrecy submitted comments to the Alaska Oil and Gas Conservation Commission this week endorsing the agency’s proposed fracking rules, which would require chemical disclosure for fracking fluid and would not make an exception for ingredients deemed proprietary, as most states do.
The professors wrote that withholding the identity of certain fracking chemicals for commercial interest marginalizes the general public’s interest in environmental health. “Put simply,” they wrote, “some trade secrets must give way when broader public interests are at issue.” The letter is part of a slew of comments spilling in ahead of the commission’s public hearing today on proposed fracking rules. Commissioner Cathy Foerster said the agency intentionally left out the familiar trade secret clause incorporated in every other state that requires fracking chemical disclosure…. But Foerster said she fully expected industry to advocate for itself during the rulemaking process. Indeed, Schlumberger Ltd., Halliburton Co. and the Alaska Oil and Gas Association have come out in favor of adding trade secret protection to the rules.
The law professors do not dispute the validity of many trade secret claims commonly made by industry. But, their letter says, the claims do not legally outweigh the public’s right to know the facts required for fully informed debate and discussion on drilling issues. David Levine, a law professor at Elon University who initiated the letter, said that at a minimum, full disclosure should be made to a regulatory entity. “I’d be much more comfortable knowing that the AOGCC has access to all the information that it needs,” he said yesterday, adding that the subject of full public disclosure was a broader question. “In order for regulators to do their job, they need access to not just general information, but specific information.” … The letter is the first significant weigh-in on trade secrecy from a group of experts in the legal field. Levine noted that there wasn’t consensus in the field, mostly because it hasn’t hit the radar of most intellectual property specialists. But Jim Pardo, a New York-based lawyer who tracks energy issues, said Levine and his group take their arguments too far by asserting that trade secrecy impedes informed discussion of oil and gas issues. “Trade secret protection is about balancing public disclosure against commercial reality,” he said in an email. Most states request enough general information about trade secret chemicals to do their jobs without spoiling companies’ commercial advantage, he said. Oil and gas operators have argued for years that trade secret protection is necessary in order to maintain a competitive edge on other drillers. Highly competitive companies like Halliburton and Schlumberger spend millions of dollars perfecting chemical cocktails to stimulate wells and release oil and gas. … Though the professors do not take a stance on whether such contamination is likely, they contend that any risk means that disclosure of all chemicals is essential to effective environmental management. “[T]he social costs of the original secret become greater with the passage of time,” the letter said, “as the effect becomes more costly to identify and remedy.” [Emphasis added]