Innovation Asset Blog

Energy, chemical companies worry EPA provision could compromise trade secrets

As climate change research advocates in and out of government offices request stricter transparency for energy and chemical companies, business directors are pushing back with concerns that their continuous disclosure of proprietary processes may violate fundamental trade secrets management principles. These tensions were recently exacerbated by discussion of a potential Environmental Protection Agency proposal which would require companies to publicly release information relating to the exact methods by which the businesses calculate greenhouse gas emissions.

According to The Hill, industry officials contend that divulging detailed information regarding raw materials and production volumes could effectively allow foreign or domestic competitors to reverse engineer proprietary formulas from the data provided. As a result, companies could lose the incentive to innovate and a number of unfortunate market scenarios could play out.

"There have been a number of industry folks that are concerned about this and I think we could best say that we're hopeful that [the] EPA has listened to our concerns and the proposal contains some sort of path that would protect our trade secrets," Lorraine Gershman, director of environmental, regulatory and technical affairs for the American Chemistry Council, told the news outlet.

The line between corporate privacy and public transparency has grown even more contentious, however, as significant public safety implications shadow the energy and chemical production sectors. According to the Dallas Business Journal, Exxon Mobil is currently attempting to use a trade secret exemption clause to withhold inspection data for an Arkansas pipeline segment which ruptured this past March. The spill forced the evacuation of two dozen homes, endangered local wildlife and may have contaminated a water source which serves 400,000 Arkansas residents.

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.