- Associated Press - Monday, January 26, 2015

CHEYENNE, Wyo. (AP) - A legal settlement will require petroleum companies to provide justification when they claim the ingredients in the chemical products they pump underground during hydraulic fracturing in Wyoming are trade secrets that must be shielded from public disclosure.

Wyoming in 2010 became the first state to require companies to disclose to state regulators the ingredients they use during fracking, the process of pumping water mixed with sand and chemical products into oil and gas wells to crack open deposits and boost production.

Environmentalists praised the rule. But it soon faced a lawsuit over whether it also required disclosure to the public under Wyoming’s public records law, which contains an exception that blocks corporate trade secrets from public disclosure.

The settlement approved by District Judge Catherine Wilking on Friday resolves a state public-records case filed in 2012 by the Powder River Basin Resource Council, a landowners group denied state records of the ingredients in fracking chemical products. The group claimed the Wyoming Oil and Gas Conservation Commission rubber-stamped companies’ trade-secret exemption requests without adequately assessing whether the requests were justified.

Now, companies will have to describe to the commission the extent to which such information already is known within the company and to the public. A new form companies will fill out asks, for example, if an ingredient in a chemical product has been published in a trade publication.

“It’s a significant step forward in vindicating the public’s fundamental right to know what fracking chemicals are pumped into the ground in Wyoming,” Katherine O’Brien, an attorney for plaintiff Earthjustice, said Monday.

The commission is the state agency that regulates oil and gas development in Wyoming. The lawsuit challenged trade-secret status the commission granted for 128 chemical products, O’Brien said.

Such products can include surfactants, which aid the flow of oil by reducing the surface tension between oil and water, and biocides, which inhibit bacteria. Many of the ingredients in fracking chemical products are linked to health problems ranging from respiratory distress to organ damage and cancer, according to Earthjustice.

Companies and commission staff will need time to re-process the litigated trade-secret requests and more recent ones regulators set aside pending the outcome of the lawsuit, but the work isn’t insurmountable, said Tom Kropatsch, a program supervisor for the commission. “We think we can meet the requirements of what the agreement says,” Kropatsch said.

Trade-secret requests filed by oilfield services company Halliburton were among those the lawsuit contested. State approval of those requests were appropriate under Wyoming law, Halliburton spokeswoman Susie McMichael said by email.

“We look forward to working with the commission as it implements its new procedures,” she said.

The Powder River Basin Resource Council will be watching to make sure the commission implements the settlement correctly, council attorney Shannon Anderson said. “It does come down to implementation on the side of the commission. We hope they will do a good job of robustly reviewing these trade-secret determinations,” Anderson said.

The Wyoming Supreme Court last year sided with the council and sent the case back to Wilking, who in 2013 had sided with the commission in the case.

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