Hydraulic Fracturing Chemicals – Protected Trade Secret?
Hydraulic fracturing, or “fracking,” is the use of water, sand, and chemicals to fracture rocks deep in the ground in order to release and collect hydrocarbon products. Fracking is controversial due to its alleged negative environmental impact. One of the key battles between environmental and community groups and fracking companies is the identification of the chemicals used in fracking. Fracking companies have resisted divulging these chemicals, claiming they are protected trade secrets. The Supreme Court of Wyoming addressed this issue and provided some guidance as to whether the chemicals used in fracking can be classified as trade secrets.
In Powder River Basin Resource Council v. Wyoming Oil and Gas Conservation Commission, Powder River Basin Resource Council, Wyoming Outdoor Council, Earthworks and the Center for Effective Government (Appellants) asked the Wyoming Oil and Gas Conservation Commission (Commission) to disclose the chemicals used by several Wyoming fracking companies. 320 P.3d 222 (Wyo. 2014).
Under Wyoming law, fracking companies must disclose to the Commission chemicals used in fracking. The Commission refused to disclose the information, stating that the Appellants requested information exempt from public disclosure on the basis that it was a trade secret under the Wyoming Public Records Act (WPRA). The Appellants then sought review of this decision from the district court, which affirmed the Commission. The Appellants did not request that the Commission explain its decision, as required by WPRA procedural rules. The Appellants appealed the district court’s affirmation to the Wyoming Supreme Court.
The Wyoming Supreme Court held that the Appellants should have followed the WPRA procedural rules, but also that the Commission incorrectly relied on Wyoming’s Uniform Trade Secrets Act’s definition of a trade secret and instead, should have relied on the federal Freedom of Information Act’s (FOIA) definition of a trade secret. The Supreme Court reasoned that the FOIA’s narrower definition of trade secret was more in line with the public policy favoring the disclosure of information. The case was then remanded for determination of whether the Appellants’ request sought trade secret information as defined by the FOIA.
Although this issue was decided in Wyoming, the same types of issues are beginning to appear in Michigan, and Michigan courts will surely consider recent decisions on the same issues as they decide cases that make their way through the Michigan court system.
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