HELENA — Energy companies would have to justify claims that the chemicals they use in the hydraulic fracturing process to drill for oil and gas are trade secrets that must be kept from the public, under a bill that advanced Monday in the Montana Legislature.
The companies would submit their requests for confidentiality and a $25 fee to the Montana Oil and Gas Conservation Board, which would make the determination. The board would not be allowed to release chemical information considered confidential unless a court orders it to do so, according to the bill.
The measure, which is a vote away from passing the Montana Legislature, comes after an environmental organization and landowners filed a lawsuit in January over the current Montana rule that allows companies to conceal the ingredients of the chemicals they use during hydraulic fracturing, or fracking.
Under the current rule, companies don’t have to offer any proof that the chemicals are protected trade secrets or disclose them to the oil and gas board.
Republican state Sen. Tom Richmond, of Billings, a former administrator of the board, said he is sponsoring the bill in response to the public interest in disclosing the chemicals, though he disagrees with concerns that the chemicals could harm groundwater beneath adjacent properties.
“The public right to know is a strong right in our constitution,” Richmond told a House committee late last month. “This lets the board keep trade secrets confidential unless ordered by the court to release them.”
The measure is based on disclosure rules in Wyoming. It is supported by the Montana Petroleum Association, whose executive director, Alan Olson, told lawmakers it will allow the board to make a determination over a trade secret claim while protecting companies’ proprietary information.
The bill is opposed by one of the plaintiffs in the lawsuit, the Montana Environmental Information Center. MEIC lobbyist Derf Johnson told lawmakers that requiring energy companies to justify claims of trade secrets is an improvement over the current rule, but the proposed changes don’t go far enough to protect landowners.
Johnson said his organization wants to see a requirement that companies disclose the chemical content before a fracking operation begins so that adjacent landowners can test the groundwater and fully assess the threats to their property.
“That’s an absolute must for us to protect public health,” Johnson said.
On Monday, the bill passed an initial House vote 70-30. It faces a final vote on Tuesday before it goes to Gov. Steve Bullock.
Jim Halvorson, the current administrator of the board, has previously said between 4,000 and 7,000 oil and gas wells have been fracked in Montana dating back to 1951.
If the bill becomes law, the state Department of Natural Resources estimated that companies would make 30 requests for trade secrets the first year and about 25 requests per year after that.
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