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NC officials would review trade secrets under fracking proposal

RALEIGH North Carolina’s fracking commission is set to resume its work next week on creating a chemical disclosure standard everyone can live with, now that the state legislature appears have backed off from its recent attempt to seize control of the contentious issue.

On Friday the state Senate approved a bill that would give select members of the Mining and Energy Commission the authority to review any “trade secret” claim made by energy companies before the chemicals used in fracking are brought out to a drill site and pumped into the ground.

The legislative proposal came after James Womack, chairman of the Mining and Energy Commission, sent a strongly worded letter to lawmakers complaining about earlier efforts by a Senate committee to create a loophole for energy companies to avoid disclosure. The loophole would have allowed energy companies to use a trade secret claim if they didn’t want to disclose chemicals they deemed to be sensitive or competitive.

The N.C. Mining and Energy Commission, which is writing 120-some rules to govern fracking, had vowed to write one of the nation’s strictest chemical disclosure standards: full disclosure of all chemicals used to frack in the state, providing maximum protection to the public and to the environment.

The resolution approved Friday is the result of a private meeting earlier this month between Womack, fellow Mining and Energy Commissioner Vikram Rao, Republican Sen. Bob Rucho of Mecklenburg County and Jeffrey Warren, a senior policy adviser for Sen. Phil Berger, the state Senate’s President Pro Tempore.

Still, the legislature’s delicate solution shows just how thorny the subject remains. Under the legislative proposal, review of trade secrets would be strictly controlled. The corporate secrets wouldn’t be accessible to the public, while Mining and Energy Commissioners would have access on a limited basis.

Chemical disclosure is one of the most important safety rules governing fracking, and usually the most controversial aspect of shale gas exploration. The dozens of chemicals used in fracking range from benign household cleansers and food additives to potent industrial solvents. They are diluted in the fracking fluid, typically in concentrations of 2 percent or less of the fluid.

About three dozen states allow shale gas exploration through horizontal drilling and hydraulic fracturing. With regard to disclosing the highly competitive chemical recipes used in fracking, all those states have some sort of exemption for corporate trade secrets and proprietary intellectual property, Womack said.

Womack said the Senate’s move still leaves the commission with plenty of room to operate. The fracking provision is part of House Bill 74, an omnibus environmental package, with changes made during the process that will have to go back to the House for approval to become law.

Womack said the Mining and Energy Commission’s authority to review a trade secrets is crucial. It grants the commission power to reject bogus trade secret claims, and to safeguard against unsafe chemicals.

“We’ll have some affirmation of what’s being put in the ground,” Womack said. “You can deny the trade secret status. You can deny the use of that material in North Carolina.”

The Mining and Energy Commission, and its various committees, are scheduled to meet in Raleigh on Thursday and Friday. The full commission will discuss chemical disclosure and could vote on a proposed rule Friday, Womack said.

The legislation now says an energy company would have to disclose the chemical recipe it plans to use in fracking. But any trade secret claim would be subject to review by a committee of the Mining and Energy Commission.

That committee, comprising between two and six commission members, would meet in closed session, off-limits to all except lawyers, scientists and other experts needed to advise the committee members. All who enter the room would likely have to sign confidentiality forms, promising not to discuss the trade secrets they saw. The committee would vote behind closed doors, either approving or rejecting the secret chemicals for use in this state.

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Those terms are too restrictive to fracking skeptics.

“The Senate is still trying to preclude with the Mining and Energy Commission’s intensive research and study on this matter,” said Molly Diggins, director of the Sierra Club’s North Carolina operations.

The key protection for the industry is that the committee would not keep the trade secret information on file. The documents would be returned to the energy company and taken away. This precaution is designed to protect the state government from becoming a target of freedom-of-information lawsuits filed to pry loose intellectual property.

“This is new ground we’re treading,” acknowledged Rao of the Mining and Energy Commission.

The Mining and Energy Commission will also have to come up with an emergency plan to access the trade secrets in the event of an explosion, a spill, exposure, inhalation or some other accident. Womack said the data has to be accessed quickly, “without having to go and hunt someone down.”

Rao said the mechanism will have to be foolproof, providing immediate access to doctors and emergency responders.

Said Womack: “If someone has ingested the stuff, or has blisters on their arms, then it won’t be acceptable to say, ‘We’ll get back to you.’ ”

Murawski: 919-829-8932
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