Two out of every three times oil and gas companies have publicly disclosed the chemicals in their hydraulic fracturing fluid, they've left something out.
At least one chemical was kept secret in 65 percent of fracking disclosures by companies that said they needed to protect confidential business information, according to a review of PIVOT Upstream Group's D-Frac database done for EnergyWire.
Critics of drilling say the widespread use of such "trade secret" exemptions undermines the industry's assurances that drillers are being open with the communities where they are "fracking" wells and producing oil and gas.
"It's outrageous that citizens are not getting all the information they need about fracking near their homes," said Amy Mall, who tracks drilling issues for the Natural Resources Defense Council. "Companies should not be able to keep secrets about potentially dangerous chemicals they're bringing into communities and injecting into the ground near drinking water."
But companies say they spend millions of dollars researching and developing new formulations of frack fluid and shouldn't have to give away their secret recipes.
And, industry groups say, the trade secret debate shouldn't overshadow just how much information their member companies are now disclosing.
"In just the past 18 months, the industry has spearheaded an effort that took us from an idea on paper about disclosure to a fully functional and user-friendly disclosure system," said Steve Everley of Energy in Depth, a campaign of the Independent Petroleum Association of America. "That kind of commitment and progress cannot be overstated in a discussion about industry disclosure."
In Utah, where disclosure is not yet mandatory, 94 percent of disclosures have at least one trade secret claim. That is the highest of any state with more than 100 disclosures. New Mexico was second with 84 percent. Disclosure is mandatory in New Mexico but not to the commonly used FracFocus.org registry from which PIVOT draws its information.
All of BP America Production Co.'s 230 disclosures included at least one trade secret, according to the data. BP and Howell Oil & Gas, a small Texas company, were the only firms with more than 100 disclosures to have trade secret claims in all of their wells. Rounding out the top five were Exco Resources Inc. (98 percent), Devon Energy Corp. (97 percent) and Noble Energy Inc. (97 percent).
At the other end, 38 percent of disclosures for wells fractured in Pennsylvania had trade secret claims, and West Virginia's rate was 9 percent.
The trade secret debate
Trade secret protection has been one of the biggest sticking points in the fracking fluid disclosure debate, if not the biggest.
For years, oil and gas companies opposed the disclosure of the contents of their fracking fluid by saying that giving away their proprietary recipes would put them at a competitive disadvantage. Now, environmentalists say trade secret provisions have created big loopholes in the laws that states are passing to require public disclosure.
Drillers have rallied behind the privately run, industry-funded FracFocus site. And many state governments have adopted the site for mandatory disclosure of chemicals used in their states.
Environmentalists and others suspect that companies cite "trade secret" information when they simply don't want to disclose the toxic chemicals they have pumped underground. They say the oil and gas industry gets preferential treatment over other industries because state oil and gas officials allow drillers to claim trade secret protection without oversight.
In New Mexico, for example, state rules allow companies to decide what they consider trade secrets. That decision can be challenged in court if someone disagrees.
Environmental groups have sued the Wyoming Oil and Gas Compact Commission for allowing trade secret protection too easily (EnergyWire, March 27). Environmentalists had praised Wyoming as a leader in disclosure when the rules were announced, but now they say the state's handling of trade secrets undermined its achievement.
The National Resources Defense Council issued a report in July that criticized the ease with which state officials grant trade secret protections to oil and gas companies (EnergyWire, July 30). The report said that no states are providing comprehensive disclosure and state-level enforcement is uneven.
The trade secret data was provided by PIVOT Upstream, which is the only company that has managed to convert the PDF documents provided by FracFocus into tabular data that can be used for broader analysis. Its D-Frac database combines data from FracFocus and other sources. PIVOT provided EnergyWire with data on any disclosures with "secret," "confidential," "CBI" (confidential business information) or "proprietary" in the categories of trade name, ingredient, purpose or "CAS Number," the unique identifier for each chemical.
The analysis did not include any trade secret claims about the amount of chemicals in the fracturing fluid.
Some of the chemicals kept secret are toxic. Wyoming granted trade secret status to the ChemEOR product Inflo 250 W. But a chemical information sheet filed in Ohio indicates the product contains toxic methanol and 2-Butoxyethanol, a fracturing ingredient cited in several contamination allegations, and other hazardous components (Greenwire, Dec. 20, 2010).
But drilling companies, and the service companies that provide fracturing fluid, say disclosing those chemicals to the public would also give away valuable information to their competitors.
Halliburton Co. said it spent "tens of millions of dollars" across five years researching new fracturing fluids. The oil field services company said that public disclosure of its proprietary formulas could cost it $375 million (Greenwire, Jan. 20). ChemEOR, a Los Angeles-based oil-field chemical company, told Wyoming regulators it spent more than $400,000 directly on research and development of InFlo 250 W.
Companies also have argued that too much disclosure also could hinder efforts to develop new, less toxic fracturing chemicals. They say they have no incentive to invest in research if their innovations will simply be given away.
An Obama administration panel that looked at fracking and drilling was dismissive of industry fears about public disclosure but also said there needs to be "an exception for genuinely proprietary information" (Greenwire, Aug. 11, 2011).
Industry notes that U.S. EPA allows companies to withhold trade secret information from its well-known Toxics Release Inventory. The FracFocus site says companies that have agreed to voluntarily disclose their frack fluid chemicals except for chemicals that qualify as trade secrets under the Occupational Safety and Health Administration's worker safety laws.
Service companies like Halliburton and chemical manufacturers are known to be the most interested in zealously guarding the confidentiality of their recipes. But some drillers see the secrecy as overblown. Jim Felton, a spokesman for Bill Barrett Corp. in Denver, said his company expects to reduce the number of trade secret claims in its disclosures.
"After all, virtually all our operations currently are in areas involving other operators," Felton said, "the point being that we are all using the same frac crews and performing essentially the same fracs into the same formations."
Click here to see more on PIVOT Upstream's D-Frac database.
Click here to see OSHA's interpretation of trade secret rules.
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