The Railroad Commission of Texas issued its proposed rule for hydraulic fracturing chemical disclosure last week in the Texas Register. The proposed rule is part of the implementation process of HB 3328, which Governor Perry signed into law earlier this year. Many consider it to be landmark hydraulic fracturing legislation. The rule requires companies to submit their chemical ingredients and the volume of water used in the fracturing fluid to the website FracFocus, a joint project of the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. The proposed rule is open to public comment until October 11, 2011.

The proposed rule impose a new requirement on industry, and exempts unknown, unintentionally added, and trade secret ingredients from disclosure:

Proposed new §3.29(d), relating to disclosures not required, states that a supplier, service company, or operator is not required to disclose ingredients that are not disclosed to it by the manufacturer, supplier, or service company; disclose ingredients that were not intentionally added to the hydraulic fracturing treatment; 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 identify specific chemical ingredients that are eligible for trade secret protection based on the additive in which they are found or provide the concentration of such ingredients.

This language may also exempt the disclosure of ingredients present in the recycled water.

The trade secret provisions in the rule protects members of industry from having to disclose certain private information that could impact their business. Generally, the only way that industry would have to disclose such information is if it is “successfully challenged under Texas Government Code, Chapter 552.” Otherwise, the only person that the trade secret information must be disclosed to is a health professional or emergency responder, under certain circumstances, who must keep the information confidential.

The Railroad Commission found that the proposed rule would not affect the economy so no employment impact statement has been prepared. It also determined that it is not a major environmental rule, “because the rule does not meet the requirements set forth in Texas Government Code, §2001.0225(a).”