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DOE Panel: Too Many Errors, Trade Secret Exemptions in FracFocus

Oil and gas companies are claiming too many trade secret exemptions in FracFocus disclosures of chemicals used in hydraulic fracturing (fracking), and the registry contains several errors, according to a U.S. Department of Energy (DOE) task force charged with reviewing the website.

In a 24-page report released on Feb. 24, the Secretary of Energy Advisory Board (SEAB) Task Force said it learned that since the June 2013 launch of FracFocus 2.0, companies have invoked trade secret exemptions for at least one chemical at 84% of the wells in the registry. By state, wells with such an exemption ranged from 57% to 100%, but on average the industry claimed the exemptions 16% of the time between June and December 2013.

"While there are many different ways to assess the incidence of the trade secret exemption claim...this data does not suggest the level of transparency and disclosure urged by this task force or by the 2011 subcommittee and supported by this task force," the report said. "More can be done.

"This task force believes that the goal should be to have very few trade secret exemption claims from disclosure. The public is clearly concerned about the nature of the chemicals used in fracking. It is much to industry's advantage to meet this concern."

The task force said it believes the number of trade secret exemptions could be reduced if:

  • DOE completes a study and collects accurate data about the nature and extent of trade secret claims, taking into consideration the chemicals, states, operators, suppliers and time; and
  • State and federal regulators establish a standard for claiming an exemption, and determine compliance with trade secret claims and challenge mechanisms.

Another issue the task force discovered was errors in the registry. It said that after examining a limited sample of FracFocus 2.0 records, it found "a variety of errors, partly due to many different companies contributing data to an individual FracFocus record, besides the operator of the well."

The task force recommended that FracFocus examine the entire data entry process and look for ways to simplify it, citing the accuracy and completeness of Chemical Abstract Service numbers as an example. It also recommended that the registry inform companies about errors, include more information about water used as a fracking fluid, and that states be more attentive to whether companies are complying with state disclosure laws.

Although recognizing a difference between how the federal government and FracFocus handles the security, storage and retention of data, the task force recommended that the latter adopt more robust policies, including protecting against the unauthorized alteration or deletion of data, a long-term data retention policy, and eliminating restrictions on sharing and aggregating data.

"To ensure that data will be subject to government open records policies that apply to publicly held data, [we also recommend] that any state or federal agency that adopts FracFocus as a reporting venue should explicitly adopt a policy to download data or otherwise take possession of information from FracFocus on a regular basis (e.g., weekly)," the task force said.

Other recommendations included increasing the utility of FracFocus by making it available for use by various regulatory agencies, companies and the public; broadening the registry's scope by including water quality data from water sources near fracking operations, both before and after drilling; and finding a stable source of funding for the registry, whose maintenance costs are an estimated $1 million per year.

According to the task force, as of Nov. 1, 2013, more than 20 states had adopted some level of disclosure requirements, of which 14 are required to use FracFocus. By comparison, only two states had mandated that oil and gas companies use the registry in 2011. The number of wells in the registry has also increased substantially, from 14,246 in 2011 to 62,410 in 2013.

Last November, DOE Secretary Ernest Moniz instructed SEAB to set up the task force to review FracFocus 2.0. The registry was launched in 2011 by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission (see Shale Daily, April 6, 2011).

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