The state Supreme Court heard arguments Wednesday over whether a trade secrets exemption in Wyoming's public records law may be invoked to shield from disclosure many of the chemicals the petroleum industry uses in hydraulic fracturing.
The landowner group Powder River Basin Resource Council and environmentalists including the Wyoming Outdoor Council argued that individual ingredients in the various chemical products used during hydraulic fracturing can't be considered trade secrets. Therefore, they say, the information on file with the state must be disclosed to the public.
Attorneys for the Wyoming Oil and Gas Conservation Commission and Houston-based oilfield services company Halliburton Co. argued that individual chemicals can be trade secrets because they often constitute enough information to potentially betray competitive advantage to other companies.
"They've got different ingredients that make a Coke different from a Pepsi," commission attorney Eric Easton told the justices.
He gave another example: Ingredients, in part, are why Wonder bread differs from French bread. But Chief Justice Marilyn Kite was skeptical.
"I'm not sure that's a good analogy, because you sure look at the ingredients every time you buy a loaf of bread," she said.
Fracking involves pumping water, sand and chemical products into oil and gas wells to break open deposits and boost the flow of fossil fuels. The chemical products are individually formulated to perform a variety of specific functions during the fracking process.
The case originated in 2010, when Wyoming became the first state to require companies to disclose the ingredients in the fracking products they use. The idea was that the Wyoming Oil and Gas Conservation Commission, the state agency which oversees oil and gas development, could call up the information later to help determine the cause of any future groundwater pollution that might be linked to oil and gas development.
The rule inspired environmentalists, also, to find out more about the chemicals. They filed a records request with the commission to obtain copies of the ingredient lists that were submitted.
The commission withheld many of the lists on trade-secret grounds. The groups filed suit, saying the commission had rubber-stamped companies' requests for trade secret status without scrutinizing whether such protection was justified.
Companies often provided short, boilerplate, one-size-fits-all justifications when they applied to the commission for trade-secret status, Earthjustice attorney Tim Preso told the justices.
Yet he said the state oil and gas supervisor, who directs the commission, had granted 201 of 202 company requests for trade-secret status.
"The commission was applying a consistently inappropriate standard," he said.
He also described inconsistency between companies' responses to the disclosure rule. Some wanted long lists of chemicals withheld, he said, while others sought secrecy for a couple chemicals.
"We disclose some ingredients but not others. Yes, that is the point," said Steven Leifer, an attorney for Halliburton, which intervened on the state's side.
Leifer said Wyoming has a tough fracking chemical disclosure law but California's is somewhat tougher. He said the risk of trade secrets disclosure discourages Halliburton from using its least toxic products in California.
"I don't want to see that happen in Wyoming," he said.
Kite said the justices would take the arguments under advisement and rule in writing later.