In the case of Powder River Basin Resource Council, et al. v. Wyoming Oil and Gas Conservation Commission and Halliburton Energy Services, Inc., in the Seventh Judicial District Court, County of Natrona, State of Wyoming, Civil Action No. 94650-C, four environmental plaintiffs challenged the trade secret exemption of the Wyoming Oil and Gas Conservation Commission’s hydraulic fracturing fluid disclosure rules. The plaintiffs asserted that the Commission had unlawfully withheld the identification of hydraulic fracturing chemicals used by various oil and gas producers, including Baker Hughes, BJ Services Company, CESI Chemical, Champion Technologies, Core Laboratories, Halliburton Energy Services, Inc., NALCO Company, SNF, Inc., and Weatherford International. They complained that the oil and gas producers did not provide sufficient factual support to uphold their claim of trade secret and want all the chemicals publicly disclosed. Halliburton Energy Services, Inc., who intervened in this litigation, warned that uncovering the hydraulic fracturing formula could hamstring project development efforts in the state.
On March 21, 2013, the Court ruled that the Commissioner “acted reasonably when he established a policy for evaluating trade secret requests and that policy is in accordance with the Wyoming Public Records Act” and that the plaintiffs failed to demonstrate that the Commissioner’s “decisions to grant trade secret protection requests were arbitrary, capricious, or not in accordance with the law.” The Commission’s decision to withhold the hydraulic fracturing formula information was upheld by the Court. In its conclusion, the Court expressed its awareness of the “important issues of public policy” implicated in the parties’ positions. The plaintiffs’ position that the “identity of hydraulic fracturing chemicals is key to understanding the potential environmental and health impacts of hydraulic fracturing” and the defendant’s position that hydraulic fracturing has a positive economic impact on Wyoming and that disclosure would adversely affect the industry have “substantial merit, however the Court feels these competing concerns are best addressed through legislative action, or further rule promulgation and are not properly within the Court’s purview.”
Wyoming’s hydraulic fracturing disclosure rules require owners, operators or service companies to disclose to the Commission the chemical additives, compounds and concentrations or rates proposed to be mixed and injected. The required information includes additive type, compound name and Chemical Abstract Service (CAS) numbers, and proposed rate or concentration for each additive. The Commission retains discretion to request the formulary disclosure for the chemical compounds. However, this formulary information only needs to be disclosed to the Commission and confidentiality protection shall be provided for trade secrets. Before granting trade secret exemptions, the Commission requires the party seeking the exemption to submit details of the chemicals whose identities they want to withhold, along with a cover letter justifying their trade secret position. The Commission staff then reviews the chemical information and the justification to ensure compliance with the disclosure rule and the Wyoming Public Records Act. If there is compliance, the Commission withholds the information.
Read The Court’s Order
This post was prepared by Barclay Nicholson (bnicholson@fulbright.com or 713 651 3662) fromFulbright's Energy Practice.
