Fracing Disclosure Main Concern In Senate Energy Bill; Incentives For NG Vehicles Included

September 2010 Vol. 65 No. 9

The energy bill the Senate is to finally take up in September is primarily a "BP-response" bill. It contains none of the greenhouse gas emission reductions that Democrats had hoped to bring to a vote in a "Climate Change" bill, which is dead for this year. The Clean Energy Jobs and Oil Company Accountability Act of 2010 focuses mostly on oil spill liability and response issues.

Natural gas production offshore doesn't appear to be a concern, obviously because there is no such thing as a gas "spill." Moreover, there don't appear to be any provisions applicable to pipelines, offshore or on. However, Senate Majority Leader Harry Reid (D-NV) slipped in a provision dealing with disclosure of "fracing" chemicals which has drawn the ire of some big natural gas producers.

The fracing disclosure provision in the Senate bill differs from a House bill -- which has not been approved by any committee, much less the full House -- called the Fracturing Responsibility and Awareness of Chemicals Act (FRAC ACT). The House bill authorizes the EPA to regulate fracing liquids under the Safe Water Drinking Act. That led companies such as ExxonMobil and XTO to oppose the House bill.

The Senate bill says a state "may" require any person using hydraulic fracturing to disclose a list of chemicals used, identified by well location and number, including the chemical constituents of the mixtures, Chemical Abstracts Service registry numbers and material safety data sheets. If a state does not require that disclosure by Dec. 31, 2011, the drilling company would have to disclose the information to the public on its website.

Ken Cohen, vice president of public and government affairs for ExxonMobil, says, "We feel disclosure should be made at the state level without additional and unnecessary regulations from the Environmental Protection Agency and the federal government. States are acting on the fluid disclosure issue, with several important unconventional gas production states recently enacting or proposing new disclosure requirements (such as Colorado, Wyoming, Arkansas, Pennsylvania, and New York). We’ve been following these state guidelines and are working with industry to develop best practices."