Fracking Fluid Dynamics: New Trade Secrets Movements

It is no secret that America’s energy industry depends upon the trade secret status of its products, techniques, and procedures for much of its continued success. As oil prices remain volatile, trade secret and intellectual property protection continues to be a key component of ensuring profitability. But the law in this area may be evolving quicker than industry insiders would like. READ MORE

Settlement Reached in Wyoming Fracking Disclosure Lawsuit: Heavier Burden of Proof for Companies Claiming Trade Secret or Confidentiality Protections

As we’ve previously discussed, a patchwork of state regulations requiring disclosure of chemicals used in fracking have been enacted by several states in recent years.  One such regulation was by the State of Wyoming.  While environmental groups initially lauded Wyoming’s new rule, the applause was short-lived as the Wyoming Oil and Gas Conservation Commission began granting trade secret exemptions that prevented disclosure of this information to the public under the state public records act.  This led the environmental groups to sue the Commission.  After nearly three years of litigation, including an appeal to the Wyoming Supreme Court, the parties reached a settlement that was approved by the state district court late last month.


North Carolina Enacts Criminal Penalties for Disclosure of Fracking Trade Secrets

North Carolina is officially open for fracking, after lifting a ban on the practice—and enacting criminal penalties for spilling trade secrets associated with it. With passage of the Energy Modernization Act, North Carolina joins the growing ranks of states that have legislated to protect confidential fracking information.

North Carolina’s new law prompted us to update our chart summarizing the key provisions of similar legislation in other states. It can be seen hereREAD MORE

Pyrrhic Victory For Parties Seeking Fracking Fluid Disclosures

Parties advocating public disclosure of the chemical makeup of fracking fluids may have won a recent battle in Wyoming, but are they losing the war?  On March 12, 2014, the Wyoming Supreme Court in Powder River Basin Resource Council v. Wyoming Oil and Gas Conservation Commission reversed a district court’s order exempting fracking fluid information from public disclosure.  The court made two key findings.  First, the court clarified that parties seeking disclosure in Wyoming are entitled to de novo district court review of administrative decisions exempting fracking fluid information from disclosure as trade secrets.  Second, it held that the “narrow” definition of trade secrets under FOIA applies to exemption claims. READ MORE

Fracking Trade Secret Rules: A Tug of War Without Winners

In the approximately 31 states with known reserves amenable to hydraulic fracturing, or “fracking,” a tug of war is being waged between an oil and gas industry seeking to protect its proprietary processes and environmental groups that want to know the secret sauce.  Because fracking was carved out of federal oversight in 2005, determining where the balance lies has been left to the states.  Not surprisingly, consensus is not the order of the day.  Trade Secrets Watch prepared a state-by-state chart that highlights the key provisions of the states currently requiring disclosure.  To view the chart, click here: flipbook / PDF.


UPDATE: California Bill Requiring Fracking Chemical Disclosure Advances in Legislature

California is one step closer to requiring energy companies to disclose to state regulators the chemicals they use in hydraulic fracturing, also known as “fracking.”

On Wednesday, the state Senate passed S.B. 4.  As we have reported previously, the bill requires, among other things, the disclosure to state regulators of potential trade secrets in the form of fracking fluid chemicals. The regulators may, in turn, disclose this information to first responders and health care professionals in the event of an emergency.  The information would not, however, be publicly accessible.  The bill contains stiff civil penalties for noncompliance.

As we discussed in our original post on this issue, California’s law adds to the uncertainty associated with patchwork fracking disclosure rules, particularly because California has significant coastal and inland shale deposits that will undoubtedly be a prime target for oil and gas companies.

The bill will now be considered by the state Assembly.  If that chamber passes the measure with no amendments, it then goes to Gov. Jerry Brown.  If the Assembly does amend it, the bill returns to the Senate.

Time for the White House to Step In? Patchwork State Fracking Regulations Will Spawn FOIA and Trade Secrets Lawsuits

Revised post available here.

With a growing number of states demanding disclosure of its fracking recipes, the oil and gas industry is fighting to plug what it views as government-mandated leaks in its trade secrets pipeline.

Battles are brewing in state capitals and courts as the industry faces fourteen states (and counting) that now require disclosure of the chemicals they use for fracking (aka hydraulic fracturing), a liquid-based process of drilling and extracting oil and gas from shale rock below ground.  These regulations are intended to allow government agencies to evaluate the environmental and health impacts of fracking.  Some state agencies are mandating disclosure directly to the agency (California is considering this approach), while other agencies are taking a permissive approach and rely on information submitted to an industry-developed registry for fracking.

Once collected by a state agency, the receiving agency can generally disclose corporate fracking information to third parties.  These parties may include doctors in the case of a spill under California’s fracking bill, or any member of the public in response to state freedom of information act (FOIA) requests.  Environmental and public-health groups are advocating for a robust disclosure policy, while oil and gas companies argue that their fracking approaches are trade secrets and READ MORE