NM regulators approve fracking disclosure rule

AP | Susan Montoya Bryan

November 18, 2011
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ALBUQUERQUE -- New Mexico oil and natural gas producers will be required to disclose the fluids used in hydraulic fracturing operations under a proposal approved Thursday by the state Oil Conservation Commission.

The commission made a unanimous decision to support the disclosure rule during a hearing in Santa Fe after taking testimony from industry experts and watchdog groups.

The New Mexico Oil and Gas Association submitted the proposal in an effort to address public concerns about the practice, which involves pumping water, sand and other chemical compounds underground to free oil and gas trapped in the rock.

Hydraulic fracturing, or fracking, has been used for decades to enhance well production, but federal regulators have been investigating whether the practice is contaminating drinking water supplies.

Industry officials in New Mexico contend the process is well regulated and that there have been no documented cases of contamination in the state that stem from fracking.

"We felt like it was appropriate to step out and advance a rule that would create a registry that would be accessible so people could view that and understand what is being injected deep underground to stimulate these wells," said Steve Henke, president of the New Mexico Oil and Gas Association.

Some companies operating in the state already voluntarily disclose details about their fracking fluids, but Henke said the practice should be mandatory.

The commission made some changes before adopting the rule. The final language is expected to be issued in January.

Instead of posting the ingredients of fracking fluids to an online registry called FracFocus, commissioners want companies to list the chemicals and their volumes on a form that will be submitted to the state Oil Conservation Division.

Gwen Lachelt with Earthworks' Oil and Gas Accountability Project was disappointed with the commission's decision.

"They went through all the motions to put in place a rule that requires nothing more than what's already required on material safety data sheets," she said.

Lachelt accused the commission of being "cozy" with industry and ignoring a recent recommendation by a U.S. Department of Energy panel that called for full disclosure. She said several other states are also considering adopting stronger disclosure rules.

"New Mexico is going to be the laughing stock of the rest of the states looking at these rules," she said, explaining that a recent law in Texas allows land owners there to challenge whether companies can keep secret their formulas for competitive reasons.

Oil and gas developers have worked with regulators and environmentalists in other states to develop disclosure rules, but Henke said he believes the association's proposal represented the first time industry had proposed such a rule on its own.

The oil and gas association said it was pleased with the commission's decision because it offers certainty for operators and provides the public an opportunity to know what is involved in fracking operations.

While the association touted its willingness to embrace transparency and accountability, environmentalists argued that more needs to be done to ensure groundwater safeguards.

Lachelt pushed unsuccessfully for advance public notice for fracking activities and more disclosure details, such as the type and volume of the base fluid used as well as each additive and the chemical ingredients in those additives.

"These disclosure rules are not for the industry, they're for the public," she said. "The industry knows it has lost the public trust around fracking. They're trying to show that states have it handled with these disclosure rules, but that's not our opinion."

Tagged with: regulation, new mexico oil conservation division, new mexico, hydraulic fracturing, fracking, disclosure

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