The Rising Influence of Rising Affluence

[DewDiligence]

RRC Agrees to Disclose Fracking Chemicals

[Mandatory disclosure seems like a fait accompli if companies don’t do it voluntarily; even Rex Tillerson is on board with the idea, although I haven’t heard that XOM has actually disclosed anything yet.]

http://online.wsj.com/article/SB10001424052748703834604575365360901763540.html

›JULY 14, 2010
By RUSSELL GOLD

Range Resources Corp. says it plans to disclose the chemicals used to hydraulically fracture natural-gas wells in Pennsylvania, confronting rising pressure from environmental groups worried that drilling could contaminate drinking water.

The decision, which Range said was voluntary, reflects the mounting distrust that energy companies face, especially in the wake of the ongoing oil spill in the Gulf of Mexico. Even before the offshore spill, the industry was facing increasing scrutiny as gas drilling in the Marcellus Shale spreads across Pennsylvania and neighboring states.

In a significant break from past practice, Range says it will begin submitting a detailed list of all chemicals and additives, and the volumes, used to fracture each of its gas wells to the state.

"There has been so much misinformation about the Marcellus, we think it's prudent" to begin making this information public, says John Pinkerton, chairman and chief executive of the Fort Worth, Texas, company. Range holds leases for 1.3 million acres in the Marcellus and its ability to develop the gas is central to future growth. "It's the right thing to do morally and ethically, but it's also right for our shareholders," he says.

Range plans to make the disclosures with state Department of Environmental Protection within 30 days of "frac" jobs, and post the information online.

The decision was praised by environmental groups and some members of Congress who have proposed a law to require similar levels of disclosure.

The industry has resisted disclosing the chemicals it uses, although that has been softening recently. Exxon Mobil Corp. Chairman and Chief Executive Rex Tillerson told Congress earlier this year he "wouldn't object to any disclosure."

Loosening gas molecules from dense shale rock requires drilling a well, then pumping in thousands of gallons of fluid under high pressure to crack the rock open. Range used 4.5 million gallons in a simple fracture of a recent well—the overwhelming majority being water, according to a sample of the disclosure provided by the company. It also used smaller amounts of chemicals such as sodium hydroxide, ethylene glycol, hydrochloric acid and benzalkonium chloride.

Range says the purpose of disclosure was to dispel concerns that chemicals added to fracture fluids are a risk. The fluid is being pumped a mile beneath the groundwater and is 99.8% water and sand, the company says. And the chemicals are "comparable to household chemicals in a very diluted form," says Ray Walker, a Range executive.

Some politicians and environmental groups that support increased use of natural gas as a cleaner alternative to coal have expressed frustration with the industry's disclosures. Tim Wirth, a former Democratic senator from Colorado who has been a prominent advocate for natural gas, says the industry's penchant for secrecy is making it harder to win over skeptics.

"If there's no problem, then disclose," Mr. Wirth said. "That's the price of admission in this day and age."

Amy Mall, senior policy analyst with the Natural Resources Defense Council, says the industry has used hundreds of different chemicals in fracture fluids in the past. She said the disclosure will help homeowners who have had difficulty figuring out what chemicals to test for when they grew suspicious that their water well had been contaminated. "Many of these chemicals aren't part of a standard test; you have to know what to test for," she says.

Also, John Hanger, secretary of the Pennsylvania Department of Environmental Protection, said he was pleased with Range's new policy. "If one company can do it, everyone can do it—and should do it. The holding back of information in this area has fueled public suspicion." He said these Range disclosures and an ongoing study by the federal Environmental Protection Agency into chemicals used in fracture fluids should go a long way to create confidence.

Jan Jarrett, president of Citizens for Pennsylvania's Future, an environmental advocacy group, applauded Range's disclosure program as a "step in the right direction." She said the state should make it mandatory.‹