SECTION 3.29. Hydraulic Fracturing Chemical Disclosure Requirements

(a) Definitions. The following words and terms when used in this section shall have the following meanings, unless the context clearly indicates otherwise.

(1) Accredited laboratory--A laboratory as defined in Texas Water Code, §5.801.

(2) Additive--Any chemical substance or combination of substances, including a proppant, contained in a hydraulic fracturing fluid that is intentionally added to a base fluid for a specific purpose whether or not the purpose of any such substance or combination of substances is to create fractures in a formation.

(3) Adjacent property--A tract of property next to the tract of property on which the subject wellhead is located, including a tract that meets only at a corner point.

(4) API number--A unique, permanent, numeric identifier assigned to each well drilled for oil or gas in the United States.

(5) Base fluid--The continuous phase fluid type, such as water, used in a particular hydraulic fracturing treatment.

(6) Chemical Abstracts Service--The division of the American Chemical Society that is the globally recognized authority for information on chemical substances.

(7) Chemical Abstracts Service number or CAS number--The unique identification number assigned to a chemical by the Chemical Abstracts Service.

(8) Chemical Disclosure Registry--The chemical registry website known as FracFocus developed by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission.

(9) Chemical family--A group of chemical ingredients that share similar chemical properties and have a common general name.

(10) Chemical ingredient--A discrete chemical constituent with its own specific name or identity, such as a CAS number, that is contained in an additive.

(11) Commission--The Railroad Commission of Texas.

(12) Delegate--The person authorized by the director to take action on behalf of the Railroad Commission of Texas under this section.

(13) Director--The director of the Oil and Gas Division of the Railroad Commission of Texas or the director's delegate.

(14) Health professional or emergency responder--A physician, physician's assistant, industrial hygienist, toxicologist, epidemiologist, nurse, nurse practitioner, or emergency responder who needs information in order to provide medical or other health services to a person exposed to a chemical ingredient.

(15) Hydraulic fracturing fluid--The fluid, including the applicable base fluid and all additives, used to perform a particular hydraulic fracturing treatment.

(16) Hydraulic fracturing treatment--The treatment of a well by the application of hydraulic fracturing fluid under pressure for the express purpose of initiating or propagating fractures in a target geologic formation to enhance production of oil and/or natural gas.

(17) Landowner--The person listed on the applicable county appraisal roll as owning the real property on which the relevant wellhead is located.

(18) Operator--An operator as defined in Texas Natural Resources Code, Chapter 89.

(19) Person--Natural person, corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, or any other legal entity.

(20) Proppant--Sand or any natural or man-made material that is used in a hydraulic fracturing treatment to prop open the artificially created or enhanced fractures once the treatment is completed.

(21) Requestor--A person who is eligible to request information claimed to be entitled to trade secret protection in accordance with Texas Natural Resources Code, §91.851(a)(5).

(22) Service company--A person that performs hydraulic fracturing treatments on a well in this state.

(23) Supplier--A company that sells or provides an additive for use in a hydraulic fracturing treatment.

(24) Total water volume--The total amount of water in gallons used as the carrier fluid for the hydraulic fracturing job. It may include recycled water and newly acquired water.

(25) Trade name--The name given to an additive or a hydraulic fracturing fluid system under which that additive or hydraulic fracturing fluid system is sold or marketed.

(26) Trade secret--Any formula, pattern, device, or compilation of information that is used in a person's business, and that gives the person an opportunity to obtain an advantage over competitors who do not know or use it. The six factors considered in determining whether information qualifies as a trade secret, in accordance with the definition of "trade secret" in the Restatement of Torts, Comment B to Section 757 (1939), as adopted by the Texas Supreme Court in Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex. 1958), include:

(A) the extent to which the information is known outside of the company;

(B) the extent to which it is known by employees and others involved in the company's business;

(C) the extent of measures taken by the company to guard the secrecy of the information;

(D) the value of the information to the company and its competitors;

(E) the amount of effort or money expended by the company in developing the information; and

(F) the ease or difficulty with which the information could be properly acquired or duplicated by others.

(27) Well--A well as defined in Texas Natural Resources Code, Chapter 89.

(28) Well completion report--The report an operator is required to file with the Commission following the completion or recompletion of a well, if applicable, in accordance with §3.16(b) of this title (relating to Log and Completion or Plugging Report.)

(b) Applicability. This section applies to a hydraulic fracturing treatment performed on a well in the State of Texas for which the Commission has issued an initial drilling permit on or after February 1, 2012.

(c) Required disclosures.

(1) Supplier and service company disclosures.

(A) As soon as possible, but not later than 15 days following the completion of hydraulic fracturing treatment(s) on a well, the supplier or the service company must provide to the operator of the well the following information concerning each chemical ingredient intentionally added to the hydraulic fracturing fluid:

(i) each additive used in the hydraulic fracturing fluid and the trade name, supplier, and a brief description of the intended use or function of each additive in the hydraulic fracturing treatment;

(ii) each chemical ingredient subject to the requirements of 29 Code of Federal Regulations §1910.1200(g)(2);

(iii) all other chemical ingredients not submitted under subparagraph (A) of this paragraph that were intentionally included in, and used for the purpose of creating, hydraulic fracturing treatment(s) for the well;

(iv) the actual or maximum concentration of each chemical ingredient listed under clause (i) or clause (ii) of this subparagraph in percent by mass; and

(v) the CAS number for each chemical ingredient, if applicable.

(B) The supplier or service company must provide the operator of the well a written statement that the specific identity and/or CAS number or amount of any additive or chemical ingredient used in the hydraulic fracturing treatment(s) of the operator's well is claimed to be entitled to protection as trade secret information pursuant to Texas Government Code, Chapter 552. If the chemical ingredient name and/or CAS number is claimed as trade secret information, the supplier or service company making the claim must provide:

(i) the supplier's or service company's contact information, including the name, authorized representative, mailing address, and telephone number; and

(ii) the chemical family, unless providing the chemical family would disclose information protected as a trade secret.

(2) Operator disclosures.

(A) On or before the date the well completion report for a well on which hydraulic fracturing treatment(s) was/were conducted is submitted to the Commission in accordance with §3.16(b) of this title, the operator of the well must complete the Chemical Disclosure Registry form and upload the form on the Chemical Disclosure Registry, including:

(i) the operator name;

(ii) the date of completion of the hydraulic fracturing treatment(s);

(iii) the county in which the well is located;

(iv) the API number for the well;

(v) the well name and number;

(vi) the longitude and latitude of the wellhead;

(vii) the total vertical depth of the well;

(viii) the total volume of water used in the hydraulic fracturing treatment(s) of the well or the type and total volume of the base fluid used in the hydraulic fracturing treatment(s), if something other than water;

(ix) each additive used in the hydraulic fracturing treatments and the trade name, supplier, and a brief description of the intended use or function of each additive in the hydraulic fracturing treatment(s);

(x) each chemical ingredient used in the hydraulic fracturing treatment(s) of the well that is subject to the requirements of 29 Code of Federal Regulations §1910.1200(g)(2), as provided by the chemical supplier or service company or by the operator, if the operator provides its own chemical ingredients;

(xi) the actual or maximum concentration of each chemical ingredient listed under clause (x) of this subparagraph in percent by mass;

(xii) the CAS number for each chemical ingredient listed, if applicable; and

(xiii) a supplemental list of all chemicals and their respective CAS numbers, not subject to the requirements of 29 Code of Federal Regulations §1910.1200(g)(2), that were intentionally included in and used for the purpose of creating the hydraulic fracturing treatments for the well.

(B) If the Chemical Disclosure Registry known as FracFocus is temporarily inoperable, the operator of a well on which hydraulic fracturing treatment(s) were performed must supply the Commission with the required information with the well completion report and must upload the information on the FracFocus Internet website when the website is again operable. If the Chemical Registry known as FracFocus is discontinued or becomes permanently inoperable, the information required by this rule must be filed as an attachment to the completion report for the well, which is posted, along with all attachments, on the Commission's Internet website, until the Commission amends this rule to specify another publicly accessible Internet website.

(C) If the supplier, service company, or operator claim that the specific identity and/or CAS number or amount of any additive or chemical ingredient used in the hydraulic fracturing treatment(s) is entitled to protection as trade secret information pursuant to Texas Government Code, Chapter 552, the operator of the well must indicate on the Chemical Disclosure Registry form or the supplemental list that the additive or chemical ingredient is claimed to be entitled to trade secret protection. If a chemical ingredient name and/or CAS number is claimed to be entitled to trade secret protection, the chemical family or other similar description associated with such chemical ingredient must be provided. The operator of the well on which the hydraulic fracturing treatment(s) were performed must provide the contact information, including the name, authorized representative, mailing address, and phone number of the business organization claiming entitlement to trade secret protection.

(D) Unless the information is entitled to protection as a trade secret under Texas Government Code, Chapter 552, information submitted to the Commission or uploaded on the Chemical Disclosure Registry is public information.

(3) Inaccuracies in information. A supplier is not responsible for any inaccuracy in information that is provided to the supplier by a third party manufacturer of the additives. A service company is not responsible for any inaccuracy in information that is provided to the service company by the supplier. An operator is not responsible for any inaccuracy in information provided to the operator by the supplier or service company.

(4) Disclosure to health professionals and emergency responders. A supplier, service company or operator may not withhold information related to chemical ingredients used in a hydraulic fracturing treatment, including information identified as a trade secret, from any health professional or emergency responder who needs the information for diagnostic, treatment or other emergency response purposes subject to procedures set forth in 29 Code of Federal Regulations §1910.1200(i). A supplier, service company or operator must provide directly to a health professional or emergency responder, all information in the person's possession that is required by the health professional or emergency responder, whether or not the information may qualify for trade secret protection under subsection (e) of this section. The person disclosing information to a health professional or emergency responder must include with the disclosure, as soon as circumstances permit, a statement of the health professional's confidentiality obligation. In an emergency situation, the supplier, service company or operator must provide the information immediately upon request to the person who determines that the information is necessary for emergency response or treatment. The disclosures required by this subsection must be made in accordance with the procedures in 29 Code of Federal Regulations §1910.1200(i) with respect to a written statement of need and confidentiality agreements, as applicable.

(d) Disclosures not required. A supplier, service company, or operator is not required to:

(1) disclose ingredients that are not disclosed to it by the manufacturer, supplier, or service company;

(2) disclose ingredients that were not intentionally added to the hydraulic fracturing treatment;

(3) disclose ingredients that occur incidentally or are otherwise unintentionally present which may be present in trace amounts, may be the incidental result of a chemical reaction or chemical process, or may be constituents of naturally occurring materials that become part of a hydraulic fracturing fluid; or

(4) identify specific chemical ingredients and/or their CAS numbers that are claimed as entitled to trade secret protection based on the additive in which they are found or provide the concentration of such ingredients, unless the Office of the Attorney General, or a court of proper jurisdiction on appeal of a determination by the Office of the Attorney General, determines that the information would not be entitled to trade secret protection under Texas Government Code, Chapter 552, if the information had been provided to the Commission.

(e) Trade secret protection.

(1) A supplier, service company, or operator is not required to disclose trade secret information, unless the Office of the Attorney General or a court of proper jurisdiction determines that the information is not entitled to trade secret protection under Texas Government Code, Chapter 552.

(2) If the specific identity and/or CAS number of a chemical ingredient, the concentration of a chemical ingredient, or both the specific identity and/or CAS number and concentration of a chemical ingredient are claimed or have been finally determined to be entitled to protection as a trade secret under Texas Government Code, Chapter 552, the supplier, service company, or operator, as applicable, may withhold the specific identity and/or CAS number, the concentration, or both the specific identity and/or CAS number and concentration, of the chemical ingredient from the information provided to the operator. If the supplier, service company, or operator, as applicable, elects to withhold that information, the supplier, service company, or operator, as applicable, must provide to the operator or the Commission, as applicable, information that:

(A) indicates that the specific identity and/or CAS number of the chemical ingredient, the concentration of the chemical ingredient, or both the specific identity and/or CAS number and concentration of the chemical ingredient are entitled to protection as trade secret information; and

(B) discloses the chemical family associated with the chemical ingredient; or

(C) discloses the properties and effects of the chemical ingredient(s), the identity of which is withheld.

(f) Trade secret challenge.

(1) The following persons may submit a request challenging a claim of entitlement to trade secret protection for any chemical ingredients and/or CAS numbers used in the hydraulic fracturing treatment(s) of a well:

(A) the landowner on whose property the relevant wellhead is located;

(B) the landowner who owns real property adjacent to property described in subparagraph (A) of this paragraph; or

(C) a department or agency of this state with jurisdiction over a matter to which the claimed trade secret information is relevant.

(2) A requestor must certify in writing to the director, over the requestor's signature, to the following:

(A) the requestor's name, address, and daytime phone number;

(B) if the requestor is a landowner, a statement that the requestor is listed on the county appraisal roll as owning the property on which the relevant wellhead is located or is listed on the county appraisal roll as owning property adjacent to the property on which the relevant wellhead is located;

(C) the county in which the wellhead is located; and

(D) the API number or other Railroad Commission of Texas identifying information, such as field name, oil lease name and number, gas identification number, and well number.

(3) A requestor may use the following format to provide the written certification required by paragraph (2) of this subsection:

Attached Graphic

(4) A requestor must file a request no later than 24 months from the date the operator filed the well completion report for the well on which the hydraulic fracturing treatment(s) were performed. A landowner who owned the property on which the wellhead is located, or owned adjacent property, on or after the date the operator filed with the Commission the completion report for the subject well may challenge a claim of entitlement to trade secret protection within that 24-month period only. The Commission will determine whether or not the request has been received within the allowed 24-month period.

(5) If the Commission determines that the request has been received within the allowed 24-month period and the certification is properly completed and signed, the Commission will consider this sufficient for the purpose of forwarding the request to the Office of the Attorney General.

(6) Within 10 business days of receiving a request that complies with paragraph (2) of this subsection, the director must:

(A) submit to Office of the Attorney General, Open Records Division, a request for decision regarding the challenge;

(B) notify the operator of the subject well and the owner of the claimed trade secret information of the submission of the request to the Office of the Attorney General and of the requirement that the owner of the claimed trade secret information submit directly to the Office of Attorney General, Open Records Division, the claimed trade secret information, clearly marked "confidential," submitted under seal; and

(C) inform the owner of the claimed trade secret information of the opportunity to substantiate to the Office of the Attorney General, Open Records Division, its claim of entitlement of trade secret protection, in accordance with Texas Government Code, Chapter 552.

(7) If the Office of the Attorney General determines that the claim of entitlement to trade secret protection is valid under Texas Government Code, Chapter 552, if the information had been provided to the Commission, the owner of the claimed trade secret information shall not be required to disclose the trade secret information, subject to appeal.

(8) The request shall be deemed withdrawn if, prior to the determination of the Office of the Attorney General on the validity of the trade secret claim, the owner of the claimed trade secret information provides confirmation to the Commission and the Office of the Attorney General that the owner of the claimed trade secret information has voluntarily provided the information that is the subject of the request to the requestor subject to a claim of trade secret protection, or the requestor submits to the Commission and the Office of the Attorney General a written notice withdrawing the request.

(9) A final determination by the Office of the Attorney General regarding the challenge to the claim of entitlement of trade secret protection of any withheld information may be appealed within 10 business days to a district court of Travis County pursuant to Texas Government Code, Chapter 552.

(10) If the Office of the Attorney General, or a court of proper jurisdiction on appeal of a determination by the Office of the Attorney General, determines that the withheld information would not be entitled to trade secret protection under Texas Government Code, Chapter 552, if the information had been provided to the Commission, the owner of the claimed trade secret information must disclose such information to the requestor as directed by the Office of the Attorney General or a court of proper jurisdiction on appeal.

(g) Trade secret confidentiality. A health professional or emergency responder to whom information is disclosed under subsection (c)(4) of this section must hold the information confidential, except that the health professional or emergency responder may, for diagnostic or treatment purposes, disclose information provided under that subsection to another health professional, emergency responder, or accredited laboratory. A health professional, emergency responder, or accredited laboratory to which information is disclosed by another health professional or emergency responder under this subsection must hold the information confidential and the disclosing health professional or emergency responder must include with the disclosure, or in a medical emergency, as soon as circumstances permit, a statement of the recipient's confidentiality obligation pursuant to this subsection.

(h) Penalties. A violation of this section may subject a person to any penalty or remedy specified in the Texas Natural Resources Code, Title 3, and any other statutes administered by the Commission. The certificate of compliance for any oil, gas, or geothermal resource well may be revoked in the manner provided in §3.73 of this title (relating to Pipeline Connection; Cancellation of Certificate of Compliance; Severance) (Rule 73) for violation of this section.

Source Note: The provisions of this §3.29 adopted to be effective January 2, 2012, 36 TexReg 9307