Lawmakers quiz regulator on gas shale rules

Editor’s note: Roby Brock, with our content partner Talk Business, wrote this report. He can be reached at [email protected]

The Joint Agriculture, Forestry and Economic Development committee quizzed Larry Bengal, director of the Arkansas Oil and Gas Commission, over new rules the regulatory agency has instituted.

The rule that sparked the most interest was Rule B-19, which requires Arkansas drilling companies to disclose the chemicals used in the fracking process.

A QUICK HISTORY
Rule B-19 was adopted by the Arkansas Oil and Gas Commission on January 15, 2011. It required all drilling permits for new wells to comply.

The effort spawned from local residents who complained about water catching fire or turning different colors in the vicinity of gas drilling. State regulators have not found a correlation between the drilling and the water quality issues to date, although an EPA study is still underway.

Industry officials were supportive of Rule B-19, although they did ask for license to apply for trade secret exemptions to prevent competitors from, in effect, stealing their fracking formulas and proprietary ingredient combinations.

Some environmental groups applauded the agency’s disclosure effort, but called for more transparency in the process by not allowing for exemptions for trade secrets. Other environmental leaders said the rule was an industry PR stunt.

A number of bills were filed in the recent legislative session to further regulate the natural gas industry; however, no bills introduced were passed. As a matter of fact, only a handful were given a hearing due to a lack of legislative support and many were steered to interim study for future debate.

ADDITIONAL DEVELOPMENTS
In today’s testimony, Bengal said that 8 companies have disclosed a total of 354 chemicals used in the process to the agency. 62 of those chemicals have been declared trade secrets.

Bengal said that the chemicals  which are used to prohibit corrosion, kill bacteria and thicken the water — are used in nearly 1,000 wells annually. He stressed that it would be impossible without "extensive inspection staff" to monitor every drilling rig in the Fayetteville Shale play.

Sen. Mary Ann Salmon, (D-North Little Rock, asked Bengal if more inspection staff would be needed in the future.

"We have been looking at that issue and will be looking at an increase in inspection staff," he answered.

Bengal also addressed questions from lawmakers regarding water quality issues, which are currently being studied by the Environmental Protection Agency and the U.S. Geological Service. There were no baseline water studies done in the region since the late 1960’s, Bengal reported, which may make the final results that may be produced difficult to interpret.

Sen. Jason Rapert, R-Bigelow, told the committee that some individual citizens in the region have paid for independent groundwater testing in advance of drilling. Rapert said that in Van Buren County, local landowners have told him that "no contamination has been found."

The joint committee also reviewed several other oil and gas commission regulations. They included regulations to streamline penalties, conforming state pipeline regulations with national standards, and changing timelines for drilling applications.