The Alaska Oil and Gas Conservation Commission has proposed a revised set of changes to state rules on hydraulic fracturing that will allow companies to keep the composition of fracking fluids secret, the commission's chair said Tuesday.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
"We've made some changes in what we proposed earlier, the most significant being that we will allow hydraulic fracturing contractors to protect the proprietary formulas of their frac fluids as trade secrets," said Cathy Foerster, chair of the AOGCC, in an interview.
The commission has set a January 15 date for hearings before final regulations are adopted, she said.
The lack of protection for proprietary fluid composition and formulas had been industry's biggest objection to the new rules, according to Kara Moriarty, executive director of the Alaska Oil and Gas Association.
Foerster said the proposed new rule would still allow public interest groups or others to challenge the protection as trade secrets, but they would have to do so in state courts.
"We want to recognize the right for a challege, but we don't want to be the judge and jury. We want it in court," Foester said.
Moriarty said her association has not concluded a detailed review of the latest proposal but said the concern with the commission's previous proposal was that it went well beyond requirements of other states.
"We are very concerned about extensive pre-approvals that would be required by the state before hydraulic fracturing can be done, which we believe would add costs and delays. Also, the rules would require monitoring and testing of water wells and notification of landowners within half a mile of a well. All other states require monitoring of wells within a quarter of a mile," she said.
"We appreciate the commission's transparency on this, and the openness to revisions, but we are concerned that the rules could add significant costs to our operations," Moriarity said.
Hydraulic fracturing has been done safely and efficiently for years in Alaska, she said.
The concerns over water-well monitoring and notification of property owners apply mostly in the Cook Inlet basin in southcentral Alaska. On the North Slope there is permafrost to the 2,000-depth level and no conventional water wells. However, the pre-approval process could complicate companies' ability to do fracturing applications to wells even on the North Slope.
The bulk of the fracturing jobs on wells done to date in Alaska has been relatively limited in size. However, one North Slope producers, Pioneer Natural Resources, applied larger-scale, multi-stage fracturing earlier this year to some of its producing wells at the Oooguruk field there.
Also, there are companies, like independent Great Bear Petroleum, who are exploring potential shale oil resources on the slope, which would involve large-scale fracturing similar to that done in the Bakken and Eagleford shale oil plays of the Lower 48 states.
Foerster said the AOGCC's intent with its new rules are to deal in advance with an issue that has attracted wide public attention, even in Alaska.