Federal Task Force Chairman Says Trade Secret Claims Hurt Industry

The chairman of the panel that led the Obama administration's inquiry into the safety of hydraulic fracturing said yesterday the oil and gas industry is hurting itself by withholding information about the chemicals used in the process.

"The industry, by saying, 'We're going to hold something back,' is paying a cost," said John Deutch, a Massachusetts Institute of Technology professor who led a subcommittee of the Secretary of Energy Advisory Board (SEAB) sometimes dubbed the administration's fracking panel.

Deutch and that panel were critical of the amount of information that oil and gas drillers withhold as "trade secrets" when they report the chemicals they use on the FracFocus website (Greenwire, Aug. 11, 2011).

Now, Deutch has been selected again to head an SEAB task force on FracFocus, the privately run fracturing chemical disclosure site. He made the comment at the task force's first meeting yesterday at Department of Energy headquarters.

FracFocus is the industry's preferred method of disclosure of the fracking chemicals. The site has come under fire from environmentalists and government transparency advocates who say it doesn't satisfy government disclosure requirements and states shouldn't depend on it (EnergyWire, Sept. 6, 2013).

Scrutiny has intensified since the Obama administration proposed using it for disclosure of fracturing chemicals on federal land.

Deutch's FracFocus Task Force is charged with reviewing how the latest version of FracFocus, sometimes called FracFocus 2.0, houses the information that federal and state agencies collect "with regard to disclosure of the composition and quantities of fracturing fluids injected into unconventional oil and gas wells," according to a Dec. 23, 2013, Federal Register notice announcing yesterday's meeting.

Deutch said industry has made great progress on disclosure. He and others who have followed drilling and fracking don't see chemical disclosure as "the biggest issue."

But, he added, "The public is dramatically interested." And the industry's insistence on keeping the name of some chemicals secret erodes public confidence, he said.

But Erik Milito, director of upstream and industry operations for the American Petroleum Institute, said the industry doesn't agree.

"I think it's adequate," Milito said.

Cal Cooper, manager of special projects at Apache Corp., said the information often isn't the operator's to give out. Service companies and chemical manufacturers often won't tell the operator what is in the mix.

"We don't have a clue ourselves," Cooper said. "Short of a lawsuit against every chemical company in the country, I don't know how we could do it."

Stephen Holditch, a task force member who retired last year as director of the Texas A&M Energy Institute, said he doesn't buy the importance that some chemical companies and service providers place on their "secret" ingredients.

"They say if you buy my 'Magic Mocus,' your well will be better," Holditch said.

FracFocus was launched in 2011 by the Ground Water Protection Council, a private nonprofit group in Oklahoma City governed by a board of state water and oil and gas regulators, along with the Interstate Oil and Gas Compact Commission. Two industry trade groups, the American Petroleum Institute and America's Natural Gas Alliance, pay the operational costs.

The oil and gas industry has heralded the site as the answer to questions about the transparency of the drilling process. Disclosure of hydraulic fracturing chemicals is now required in at least 18 states. At least 11 allow or direct drilling companies to report on FracFocus.

But the site allows some ingredients to be withheld as "trade secrets," as do the states. That has become a key point of contention. Environmentalists sued in Wyoming, saying the state allowed too many trade secret exemptions.

A report last spring from Harvard Law School's Environmental Law Program added that keeping the data in private hands makes it difficult for the public to challenge such trade secret claims. Director Kate Konschnik testified yesterday that in other industries, the more often trade secret claims are challenged, the higher the disclosure rate.

An EnergyWire review of the site in 2012 found that two-thirds of the reports filed by oil and gas companies had some information omitted as trade secrets (EnergyWire, Sept. 26, 2012).

The FracFocus data is stored as a database but is not presented to the public in a searchable format. When a user clicks, the data is converted into a PDF file and served up one well at a time.

That brought a protest yesterday from the Center for Effective Government (formerly OMB Watch).

"This makes it very difficult for the public and for researchers," Sofia Plagakis, an analyst with the group, said during the public comment section of the meeting.

Ground Water Protection Council officials have not said that the FracFocus system is unable to deliver the reports in spreadsheet format. States get information from GWPC in Excel spreadsheet files each month. Mark Bohrer of the North Dakota Department of Mineral Resources yesterday noted that his agency downloads FracFocus information into its database on a regular basis.

Instead, GWPC and state officials say it fulfills its original intended purpose: allowing a person living next to a well site to look up the chemicals that went into that well.

Industry groups oppose making the fracking data available in such spreadsheet format for fear that drilling opponents might misinterpret it and use it for political purposes. One fear is that opponents would use such data to add up how much of some toxic chemicals were used in a year.

Mike Soraghan, E&E reporter

Republished from EnergyWire with permission. EnergyWire covers the politics and business of unconventional energy. Click here for a free trial

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