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Halliburton’s Stonewalling Works in Pa., but Sparks Subpoena at EPA

by Marie C. Baca, ProPublica

On Nov. 9, the Environmental Protection Agency announced that Halliburton had refused to give the agency a complete list of the chemicals it uses for gas drilling, resulting in a subpoena for the energy giant. But the battle to keep much of this information confidential is one that Halliburton is winning in Pennsylvania.

Halliburton did not respond to requests for comment on this article, but a company spokeswoman told MSNBC.com that the EPA had approached Halliburton with "unreasonable demands" and that the company was working to supply the agency with the information it needs to complete its study of the relationship between water contamination and the controversial drilling technique known as hydraulic fracturing, or fracking. Of the nine companies the EPA asked to supply the information, only Halliburton -- the largest North American provider of hydraulic fracturing services -- refused.

Halliburton has worked hard to keep the contents of its fracking fluids secret, but the campaign has become more difficult as environmental advocates and researchers push for full disclosure. But in Pennsylvania, a state that is undergoing a natural gas drilling boom in the Marcellus Shale rock formation, regulators appear willing to accept Halliburton's argument that it should be allowed to keep details about its chemicals secret in order to maintain its competitive advantage.

Fracking shoots millions of gallons of water mixed with chemicals underground at high pressures to break rock and release natural gas. The process is currently exempt from federal regulation under the Safe Drinking Water Act as a result of assurances by the Bush-era EPA that fracking posed no harm to water supplies. In October 2009, after receiving reports of contamination near fracking sites and complaints that the agency's position was based on outdated and incomplete information, Congress ordered the EPA to conduct a comprehensive study of the technique.

The EPA said earlier this year that the study would examine a broad scope of activities associated with fracking, and that drilling companies would have to provide information about their chemicals so the effects of those activities could be tracked over time.

"There's just so much we don't know about the effects of fracking," said Gwen Lachelt, oil and gas accountability project director for the Colorado-based advocacy group Earthworks. "We deserve to have that question answered, and that can't be done without full public disclosure."

'Small But Critically Important'

Pennsylvania is also making an effort to address concerns about fracking by revising its oil and gas regulations, which haven't been updated since 1989. On July 10 of this year, the state environmental quality board released a draft of proposed amendments to the existing rules, including a provision for the Department of Environmental Protection to collect "a list of hydraulic fracturing chemicals used" in each completed well.

In the public comment period that followed, more than 2,000 individuals and organizations, including Halliburton, offered their feedback on the proposal.

Halliburton's nine-page letter (PDF), dated Aug. 9 and submitted by the law firm Manko, Gold, Katcher & Fox LLP, expressed concern for the "small but critically important universe of proprietary chemicals." "Operators and service companies already disclose substantial information regarding the fluids used in hydraulic fracturing operations," said the letter. "Pennsylvania has longstanding and strong policies that recognize and favor the protection of proprietary information and trade secrets because of the innovation that such protections support." The letter listed a series of cases in which Pennsylvania courts have "invoked a broad range of remedies in instances where trade secrets have been, or are threatened to be, misappropriated."

On Oct. 12, the Environmental Quality Board released the revised version of its proposed rule changes adjusted to incorporate the feedback collected during the comment period. Under the new disclosure guidelines, drillers are required to list only the names and concentrations of chemicals that have a Material Safety Data Sheet.

MSDS forms contain general information about potentially hazardous substances in the workplace, including appropriate handling protocol and the possible risks of exposure. The federal Occupational Safety and Health Administration mandates that employers make these documents available to their employees.

But MSDSs exist only for substances that are known to the public and have been tested to determine their toxicity. If a company claims that a chemical or some other material is a trade secret, it can withhold the name and the "specific identification" of the chemical as long as the chemical's general effects are listed on the MSDS, according to an OSHA spokeswoman.

Halliburton tried to persuade the EPA to accept MSDSs in lieu of the more detailed list of ingredients the agency requested -- but the EPA said that information was insufficient.

"The thoroughness of the study depends on timely access to detailed information about the methods used for fracturing," wrote the agency in a statement announcing that it would subpoena Halliburton for the details it needs. "Halliburton has failed to provide EPA the information necessary to move forward."

Scott Perry, director of Pennsylvania's Oil and Gas Bureau, said he doesn't know how many drilling chemicals don't have an MSDS or have an MSDS that contains only limited information. When asked how he would determine the number of chemicals that will remain undisclosed under the new regulations, he said he did not know.

Pennsylvania law also gives drillers another way to avoid disclosure: They can designate any information they provide to regulators as a trade secret, which means it would not be available to the public. Under the state's Right-to-Know Act, any information that a company says allows it to create "independent economic value" because it isn't generally known can be labeled a trade secret and made exempt from public disclosure requirements.

Perry said he doesn't think the state's broad protection of trade secrets will prevent him from executing his duties as a regulator, but he does worry that it might complicate his bureau's relationship with the public. "We want people to have the confidence that we are going to do what we are supposed to do when it comes to gas drilling," he said. "Transparency is a major part of that."

Looking Ahead

Pennsylvania's new drilling guidelines will be reviewed by the legislature and voted on this month by the Independent Regulatory Review Commission, the state agency that evaluates proposed regulations before they become law.

Halliburton announced this week that it has placed new information on its website about the contents of its fracking fluids that are being used in Pennsylvania. The description of its water, hybrid and foam fracking fluid formulations lists about a dozen substances along with their MSDSs. No information that was previously undisclosed is listed.

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