By Claudia O’Brien and Daniel Brunton

On October 24, 2012, a large group of environmental activists filed a petition with the U.S. Environmental Protection Agency (EPA) seeking new regulations to subject the oil-and-gas extraction industry to the Emergency Planning and Community Right-to-Know Act (EPCRA).  The petitioners include 17 environmental advocacy groups, including the Environmental Integrity Project—which is led by a former EPA official—the Natural Resources Defense Council, and the Sierra Club. 

A successful petition would have an immediate effect on the oil-and-gas extraction industry by requiring it to report its use of the approximately 682 chemicals and chemical categories listed in the Toxics Release Inventory (TRI).  In brief, under the TRI, a facility is subject to reporting if it has 10 or more employees and “manufactures, processes or otherwise uses” one or more of the approximately 682 listed chemicals and chemical categories above certain thresholds (25,000 pounds per year for manufacturing and processing; 10,000 pounds per year for facilities that “otherwise use” listed chemicals).[1]  These thresholds are for the amount of listed chemicals used—not the amount released.  In addition, the petition seeks to have multiple wells (and associated components) aggregated, to maximize the number of wells subject to the rule.

If a facility triggers the reporting thresholds, then, for each chemical exceeding the threshold, it must report:[2]

  • the uses of the chemical;
  • an estimate of the maximum amount present at the facility at any time during the prior year;
  • the waste treatment or disposal methods employed, and any waste treatment efficiency;
  • the annual quantity of the chemical entering the environment (with separate calculations required for air, water, etc.).

Thus, even though it is “only” information disclosure, it is not a low-cost proposition to do these measurements and calculations for oil-and-gas wells and related operations.

In addition, the petition specifically alleges that existing state-disclosure requirements are inadequate in part because they contain exemptions for trade secrets.  In contrast, EPCRA contains very limited, and likely inadequate, protections for trade secrets.[3]  Thus, if the petitioners prevail, industry participants in the oil-and-gas space face the specter of disclosing their use of listed chemicals, even when disclosure would reveal their proprietary trade secrets. 

Moreover, environmental groups have used the TRI to great effect to cast a negative spotlight on industries and individual companies.  For example, Environmental Defense Fund publishes an annual “Scorecard,” where anyone enter their zip code into the online database and see who the “biggest” polluter is in the area—based on TRI results.  But the scorecard goes further, and includes links to purported health data about each chemical—often painting those chemicals in as negative a light as possible.  Other groups publish reports of top emitters in the newspaper.  Thus, inclusion on the TRI would almost certainly result in significant negative publicity and additional public pressure on the industry.

Indeed, by the petitioners’ own account, this proposed listing petition is just the first step in a long-term effort to bring additional regulation to oil-and-gas exploration.  The petitioners assert that the federal government has failed to “adequately regulate the industry” and that state laws are “full of gaps and shortcomings.”  It seems likely that, if the industry is listed, the petitioners would pressure the EPA would to use the resultant data to justify further, substantive regulation of the industry.

In sum, though this EPCRA petition would “just” require additional disclosure from the oil-and-gas extraction industry, that disclosure would be burdensome and expensive in its own right, and it could be used as a tool by those seeking more substantive regulation of the industry. 

 

 

[1] 42 U.S.C. § 11023(a), (f).

[2] 42 U.S.C. § 11023(g).

[3] 42 U.S.C § 11042.