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Governor Polis Signs Bills to Require Disclosure of Chemical Additives in Oil & Gas Operations & Reduce the Use of PFAS Chemicals

July 12, 2022

Last month, Governor Jared Polis signed two bills into law in response to growing public concern in Colorado and elsewhere regarding chemicals used in oil and gas operations, other industrial operations, and in consumer products, with a particular focus on a broadly defined group of perfluoroalkyl and polyfluoroalkyl compounds (“PFAS chemicals”).[1] On June 8, 2022, Governor Polis signed House Bill 22-1348, implementing disclosure requirements for any chemical that may be used in oil and gas production in Colorado, including PFAS chemicals, to encourage less-toxic alternatives and enable the public to evaluate the environmental and public health impacts of these chemicals. Earlier, on June 3, 2022, the Governor signed House Bill 22-1345, prohibiting the sale or distribution of consumer and industrial products, including fire-fighting foam, that contain intentionally added PFAS chemicals (“PFAS-containing products”).[2]

House Bill 22-1348

Oil and gas operators utilize chemical additives to facilitate drilling and extraction of oil and gas. The chemical compositions of these additives may not be easily ascertainable, in part due to trade secret protections. HB 22-1348 promotes transparency regarding chemical use in oil and gas production by requiring “Disclosers” (i.e., operators, service providers, and direct vendors of what are broadly defined as “chemical products” used in “downhole operations”) to:

  1. disclose the chemical trade name of each product to the Colorado Oil and Gas Conservation Commission (the “Commission”);
  2. disclose a list of the names and Chemical Abstracts Service Numbers of each chemical used in the product to the Commission; and
  3. provide a written declaration to the Commission that the product contains no intentionally added PFAS chemicals.

If a Discloser is already selling, distributing, or utilizing a chemical product for downhole operations before July 31, 2023, the Discloser must complete the declaration and disclosures at least thirty days before July 31, 2023. If a Discloser begins to sell, distribute, or use such products on or after July 31, 2023, the declaration and disclosures must be completed at least thirty days before the Discloser begins selling, distributing, or using the product.

For oil and gas operations commenced before July 31, 2023, operators must provide the five disclosure requirements listed below to the Commission within 120 days after July 31, 2023. For oil and gas operations commenced on or after July 31, 2023, operators must submit the following disclosures to the Commission within 120 days after the commencement of downhole operations. The disclosure requirements include:

  1. the date of commencement of downhole operations;
  2. the county of the well site;
  3. the API number and the U.S. well number assigned to the well;
  4. the trade names and quantities of any chemical product; and
  5. provide a written declaration that the chemical product contains no intentionally added PFAS chemicals.

If upon the request by a Discloser or the Commission, a manufacturer refuses to disclose this information due to trade secret protections, they must at the very least provide the Commission with the name and Chemical Abstracts Service Registry Numbers of each chemical used. The Commission may promulgate rules necessary for the implementation of these requirements.

HB 22-1348 also requires the Commission to create a public chemical disclosure list for each covered well site, including the names and Chemical Abstracts Service Registry Numbers of each chemical used in downhole operations. To protect trade secrets, the Commission is directed not to publish the trade name of a chemical product or the amount of a chemical used in a chemical product. On or before July 31, 2023, operators using a chemical disclosed on the Commission’s list must provide “Community notification” to a long list of public entities and private parties, that includes mineral and surface owners and occupants, land management agencies, local governments, nearby schools, and public water systems.

During committee testimony, Commission Director Julie Murphy expressed concerns with the bill’s “significant operational challenges” that may undermine the Commission’s mission, by draining time and resources from the many regulatory and administrative responsibilities that the Commission has undertaken under the Well Bore Integrity, Mission Change, and Financial Assurance Rulemakings. For the Commission, this may prove to be a substantial undertaking, which will duplicate, in part, the national, multi-million-dollar FracFocus database, which provides similar information for downhole chemicals used in hydraulic fracturing nationwide.[3] The current bill posits a modest $61,500 fiscal note for Colorado to implement the public disclosure list for all downhole chemical usage. See HB 22-1348 § 3(1).

In requiring a declaration that the downhole chemical product does not contain PFAS chemicals, Colorado is now, albeit through a disclosure requirement, effectively the first state to try to ban PFAS-containing products used for oil and gas development. However, the impact of this effort may be limited, if the American Petroleum Institute is correct that drillers in Colorado do not use PFAS chemicals during hydraulic fracturing operations.[4]

House Bill 22-1345

HB 22-1345 requires manufacturers and distributors to phase out the sale and distribution of certain PFAS-containing products in light of increasing concerns about possible adverse health effects associates with PFAS chemicals, even at very low concentrations.[5] While the bill is titled a “Consumer Protection Act,” the PFAS-containing products ban extends to “oil and gas products” and the statute also further regulates the use of PFAS-containing firefighting foam. The prohibition on use and sale extends to PFAS-containing products in the following categories on a phased schedule:

On or after January 1, 2024:

  1. Carpets or rugs;
  2. Fabric treatments;
  3. Food packaging;
  4. Juvenile products (i.e., cribs, floor play mats, infant seats, nursing pads, strollers); and
  5. Oil and gas products (hydraulic fracturing fluids, drilling fluids and proppants).

On or after January 1, 2025:

  1. Cosmetics;
  2. Indoor textile furnishings; and
  3. Indoor upholstered furniture.

On or after January 1, 2027:

  1. Outdoor textile furnishings; and
  2. Outdoor upholstered furniture.

Additionally, cookware containing intentionally added PFAS chemicals must contain a consumer warning label and provide information about why the PFAS chemicals are present in the cookware.

Manufacturers of consumer products have been phasing out their reliance on PFAS chemicals for some time now given the health and environmental concerns associated with these chemicals. The outdoor recreation industry, which is so important to Colorado’s economy, was one of the first industries to pivot to new alternatives for PFAS’s repellent and retardant properties. Many brands, including Fjällräven and Keen, have already successfully phased out PFAS-containing products. Other brands are following suit, including Patagonia and The North Face, which both recently made public commitments to eliminate PFAS-containing products over the next few years. So, the actual impact on Colorado manufacturer and distributor operations could be limited. The fact that the statute posits an outright prohibition on the sale of certain products and is not just a notice statute, would seem to raise constitutional concerns under both the Commerce Clause and federal preemption. But that has not stopped other states, including California, Maine, Massachusetts, and a few others, from enacting similar statutes.[6]

Meanwhile, businesses should carefully evaluate any new restrictions or disclosure requirements associated with these statutes. Businesses and activities that emit or discharge PFAS chemicals into the environment, or whose other wastes contain PFAS chemicals (e.g., wastewater treatment sludge), are also likely to see stringent and costly control requirements in the near future and should plan accordingly. Also, if as currently planned, and certain PFAS chemicals get listed as CERCLA “hazardous substances,” any number of Superfund sites may need to be reopened and extensive litigation to redistribute at least some of the cost of expensive remediation requirements is likely.

[1] "PFAS chemicals" is defined as a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom. C.R.S. § 25-5-1302(7).
[2] For prior legislative action on firefighting foams see: C.R.S. §§ 25-5-1301 - 1308, §§ 24-33.5-1234(4), (5), (6), §§ 8-20-206.5(6), (7).
[3] Scott Weiser, “Polis signs new law mandating disclosure of fracking chemicals,” (June 2022).
[4] Id.
[5] On June 15, 2022, the EPA released four drinking water health advisories for PFAS chemicals at very low levels, including 0.004 parts per trillion (ppt) for PFOA. See Lifetime Drinking Water Health Advisories for Four Perfluoroalkyl Substances, 87 Fed. Reg. 36,848 (June 21, 2022).
See Product safety: textile articles: perfluoroalkyl and polyfluoroalkyl substances (PFAS), AB-2827, Cal. Leg., 2021-2022 Regular Session; An Act to Stop Perfluoroalkyl and Polyfluoroalkyl Substances Pollution, LD 1503, 130th Maine Leg. (2021); An Act Restricting Toxic PFAS Chemicals in Consumer Products to Protect Our Health, H 4818, Mass. Leg. 192nd Session (2022).