On March 5, 2014, the U.S. Department of Energy released a Task Force Report on FracFocus 2.0 concerning the website’s operating procedures, the timeliness, completeness and accuracy of the data, the extent to which information is withheld as being proprietary, data handling and retention practices, usefulness to regulatory officials and the public, the potential to include well-water quality data collected pre-stimulation and post-production and the adequacy of the existing data collection mechanism.
Composed of representatives from industry, environmental groups and academia, the Task Force found that, while FracFocus has provided increased knowledge of hydraulic fracturing operations, additional information must still be disclosed to lessen the public’s concerns about the chemicals being used.
FracFocus is a nationwide database in which companies voluntarily disclose information about their hydraulic fracturing activities, including the composition of the fluids being used with an exception for trade secrets. The Task Force found that about 84% of the wells reporting to FracFocus include at least one trade secret exception. “On average, trade secret exemptions were claimed for 16% of the chemical entries recorded in the FracFocus database between June and December 2013.”
The Task Force recommends “full disclosure of all known constituents added to fracturing fluid with few, if any exemptions. A ‘systems approach’ that reports the chemicals added separately from the additive names and product names that contain them, generally should provide adequate protection of trade secrets. The Task Force further calls for state and federal regulators [including the Bureau of Land Management] to adopt standards for making a trade secret claim and establish an accompanying compliance process and a challenge mechanism.”
The Task Force’s full disclosure recommendation requires operators (1) not to make trade secret disclaimers unless documented and attested as is done in Wyoming or Arkansas, (2) to report the complete list of chemicals by their CAS numbers and quantities added, and (3) to provide a complete list of products without linking to the list of chemicals. “The Task Force believes that if the leading operators and oil field service companies establish practical protocols for data transfer across the supply chain, and clear requirements for their suppliers, then supplier insistence of trade secrets will be greatly reduced and possibly disappear.”
In addition to suggestions for technical improvements to the website, such as searching by fields, expanding the 2000-record display, and allowing batch downloads, the Task Force suggests that the DOE provide stable funding for FracFocus and that oil and gas companies pay a registration fee of $50 per well.
Some critics object to the recommended full chemical disclosure, stating that this would be like disclosing the formula for Coca-Cola, and the registration fee, indicating that both would discourage oil and gas companies from voluntarily providing any information to FracFocus
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
