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Business // Energy
What's being put in ground stays buried.
Jennifer Hiller
Feb. 2, 2013 Updated: Feb. 2, 2013 11:59 p.m.
A legal loophole that allows companies to withhold trade secrets means it's still largely unclear exactly which chemicals are being used in the fracking process.
William Luther/San Antonio Express-NewsShow MoreShow Less
Scroll down for a larger version of this graphic.
Mike Fisher/San Antonio Express-NewsShow MoreShow Less
4of14Three well heads, upper left, in Eagle Ford shale oil play are seen in this Friday Nov. 23, 2012 aerial photo near Kenedy. Red so-called "frac tanks" are positioned at the right edge of the pad site. The containers can each hold 500 barrels of fluid which can be material being prepared to go down the well or material that has come out of the well.William Luther/San Antonio Express-NewsShow MoreShow Less
5of14Red so-called "frac tanks", seen in this Friday Nov. 23, 2012 aerial photo, are positioned in a central facility just outside Kenedy. The containers can each hold 500 barrels of fluid which can be material being prepared to go down a well or material that has come out of a well.William Luther/San Antonio Express-NewsShow MoreShow Less
7of14A cluster of well pad sites, including one with an active drilling rig, in the Eagle Ford shale oil play near Kenedy are seen in this Friday Nov. 23, 2012 aerial photo.William Luther/San Antonio Express-NewsShow MoreShow Less
8of14A still-under-development RV park in Kenedy in the Eagle Ford shale oil play is seen in this Friday Nov. 23, 2012 aerial photo.William Luther/San Antonio Express-NewsShow MoreShow Less
10of14A finished well in the Eagle Ford shale oil play near Kenedy is seen in this Friday Nov. 23, 2012 aerial photo.William Luther/San Antonio Express-NewsShow MoreShow Less
11of14A so-called man camp, bottom, and a still-under-development RV park, top, are seen in this Friday Nov. 23, 2012 aerial photo in Kenedy, which lies in the Eagle Ford shale oil play.William Luther/San Antonio Express-NewsShow MoreShow Less
13of14Drilling rigs in the Eagle Ford shale oil play are seen in this Friday Nov. 23, 2012 aerial photo.William Luther/San Antonio Express-NewsShow MoreShow Less
It's been a year since the Texas oil and gas industry had to start disclosing the mix of water and chemicals it uses for hydraulic fracturing.
But thanks to a loophole in state law that allows companies to withhold trade secrets, it's still largely unclear exactly which chemicals are being pumped thousands of feet underground.
Of 12,410 instances of hydraulic fracturing in Texas between April 2011 and early December 2012, companies used terms such as "proprietary," "secret" or "confidential" 10,120 times while reporting data on the FracFocus.org website, according to data collected through early December by the Houston-based Pivot Upstream Group and analyzed by the San Antonio Express-News.
In the Eagle Ford Shale, the South Texas field that has become one of the hottest oil and gas plays in the nation, the trade secret exemption was used 2,297 times in 3,100 fracturing events.
"I think it's a loophole big enough you can drive a frack truck through," said Luke Metzger, director of Environment Texas, referring to the army of trucks that arrive at a well site for a fracturing job.
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As shale drilling boomed across the country — and in response to grass-roots concerns about potential environmental or health effects — the oil and gas industry launched FracFocus.org in the spring of 2011 as a national registry for companies to voluntarily report the composition of hydraulic fracturing fluids.
FracFocus.org
That same year, Texas lawmakers passed the nation's first rules requiring public disclosure of the chemicals used in hydraulic fracturing. The move was touted as a model for the rest of the country to follow and a way to remove some of the mystery about fracking.
The process involves blasting sand, water and chemicals deep underground to open up dense rock such as shale, releasing trapped hydrocarbons.
On Feb. 1, 2012, Texas started requiring operators to disclose the composition of fracking fluids on FracFocus.
But the law also allows companies to withhold the "identity and amount of the chemical ingredient used" as a trade secret. And it lets companies determine what is a trade secret.
"What's the point? Where is the value in that?" asked landowner Bill Sibley, whose family owns ranches in Atascosa, McMullen and Duval counties that once belonged to his great-grandfather. "I've heard they've used everything from formaldehyde to instant coffee. Who knows? Nobody knows for sure."
Among the many chemicals drillers use for fracking are hydrochloric acid, petroleum distillates and ethanol, according to FracFocus.
Sibley said he's glad to see the oil and gas activity — including 18 wells on his family's properties — but worries about the possibility of water contamination during drilling or hydraulic fracturing, or a pipeline leak as the product moves toward coastal refineries. One pipeline on the family's property was hand-dug in the 1930s, he said.
"There are some of us who have been on the land a long time. We really understand the value of water," he said. "We're all in favor of the Eagle Ford Shale. Bring it on. But let's be smart."
The only people who can challenge a trade secret claim are the landowner and someone who lives adjacent to them. State regulators also can also challenge the use of the exemption.
Because of that, Scott Anderson, senior policy adviser for the Environmental Defense Fund's energy program, said it's impossible to say whether the industry is relying too heavily on the trade secret rule.
"How many trade secret claims are too many?" he asked. "There's really no answer to that. It's a legal question. Until and unless there's some challenges brought to trade secret claims, we can't say whether people are abusing the system or not. But certainly, this many trade secret claims raises questions about whether some people are complying with the rules."
The industry's take
David Blackmon, a managing director of FTI Consulting and a spokesman for the industry website Energy in Depth, said trade secrets are a necessity for the industry to keep innovating.
"It doesn't surprise me that there are a lot of trade secrets being protected," he said.
Blackmon said service companies spend millions of dollars on research and development to perfect fracture fluids. He also noted about 99 percent of the fluid that goes down a well during fracking is water, and about 1 percent is chemical.
"You can say 99 percent of the fluid is the same," Blackmon said. "When it comes to the content of chemicals, there's a great deal of competition."
At 99 percent, every 1 million gallons of fluid blasted underground would include 10,000 gallons of chemicals.
Blackmon said anyone concerned about the environment should want to see the research and development continue.
"They've made incredible progress in developing fluids that reduce the overall water use, that allow us to use an ever increasing percentage of briny water rather than fresh water, and to reduce the number of chemicals used in frack jobs, and to use common everyday stuff that you use in your kitchen or your bathroom to replace more potent chemicals," he said. "They're in a very competitive situation with one another."
At an Eagle Ford forum last week at the Pearl Stable, Lance Robertson, vice president of Eagle Ford production operations for Marathon Oil Corp., said oil and gas operators fully disclose information provided to them by service companies but that those companies have competitive concerns.
He said he supports disclosure and encourages other companies to report data on FracFocus, regardless of whether a specific state requires it by law.
"There are more dangerous things under my sink than we pump," he said.
Marathon spokeswoman Lee Warren said by email that all operators are bound by requirements in the federal Community Right-to-Know Act to maintain at every well site detailed product information sheets for each additive used in the fracturing process. The information is available to first responders in an emergency.
Well by well
The quality of the data on the FracFocus website varies by well.
Joe McCord of Pivot Upstream Data, which scraped the data from digitized documents on FracFocus.org, said some companies report more complete information than others.
"They may tell you the ingredients but not the exact recipe," McCord said. "Some may say, 'Here's the trade name and we're not telling you what's in it or the percentages we used. We're telling you nothing.' They can claim degrees of proprietary information."
The Environmental Defense Fund in December looked at one month of Texas data, compiled by the nonprofit group SkyTruth, which has released a database created from more than 27,000 industry reports on FracFocus.
Among several issues that popped up in the July 2012 set of data: 29 percent of reported Chemical Abstract Service numbers were wrong. The CAS number is a unique numerical identifier for a chemical.
"It's like an epidemic of typos," Anderson said.
Mike Nickolaus, special projects director for the Ground Water Protection Council, which maintains the FracFocus site with the Interstate Oil and Gas Compact Commission, said the data often are entered by office workers without a chemistry background, and mistakes can happen.
"The operators are entering information that they've gotten from the service companies. They're getting information from chemical suppliers. They get it from the manufacturer," he said. "You've got a chain here that has errors inherent in the system."
It's also impossible to see broad trends by using FracFocus.
The website lets users search U.S. wells and has more than 35,000 records. But the results are in a digital format that can't be copied or pasted, and only one well at a time can be searched.
Nickolaus said the site is intended as a way to search by well, not a way to data crunch.
"The original purpose of the system was to allow a landowner to look and see what's happening on their land," Nickolaus said. "We've had discussion about making it a data system.
"We have concerns about the quality of the data and that the data is so easily misconstrued. It was decided by the stakeholders we're going to leave it as is."
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McCord said that makes the site simple to use, but a mess to aggregate.
"If you're searching for a well next to your house, it's great," McCord said. "For any sort of analysis or large picture, you're not going to get it. It's an industry-led site. You've got the fox guarding the henhouse."
Fewer errors
FracFocus in November changed the way it collects data from companies in hopes of making the reporting more uniform. By this summer, all companies should be reporting information the same way, Nickolaus said.
Under the new FracFocus reporting system, states will be able to download an underlying database.
If one state requests the database, that could open up the database to public view through open records requests.
"If they do it, anybody can get it," Nickolaus said.
But even then, that database won't include historic information on fracking — just new wells reported under the new system. FracFocus would have to scrape data from its own website the same way that Pivot Upstream Group and SkyTruth have done.
"We would also have to scrape it," Nickolaus said. "There were inherent errors in the scraping. We don't want to put the data out there if it's not accurate."
Metzger said the data from FracFocus has been a step forward but that Texas needs a more stringent definition of what constitutes a trade secret.
"If the companies argue that fracking is safe, why are they hiding behind these trade secret loopholes?" Metzger asked. "If you're concerned about your health and you're going to the doctor, you want to know what you might have been exposed to."
Rep. Jim Keffer, R-Granbury, who sponsored the 2011 legislation, said overall he's pleased with the outcome but that there's room for improvement.
"As far as the trade secrets, we knew going in that was going to be used (by drillers), and we knew the advocacy groups were not totally happy with the bill," Keffer said. Nevertheless, he said some in the oil and gas industry "fought it all the way to the bitter end."
He doesn't have legislation in the works for this session regarding FracFocus. But Keffer said he has talked with the Texas Railroad Commission about making sure companies report required well information and with FracFocus about what it's doing to improve both reporting and the website.
"I'm hopeful that what tweaking is needed can be done internally and that we see improvement on the searchability and enforcement. That's the whole reason for the bill," Keffer said. "We need to continually improve and make it usable."
So far this legislative session, lawmakers have filed just one bill about hydraulic fracturing. A measure filed by state Rep. Dawnna Dukes, D-Austin, would require companies to disclose the chemical compound information to residents who are within 500 feet of a well at least 30 days prior to the start of drilling.
Now, the Texas Railroad Commission requires public disclosure about fracking fluids by the time the well completion report is filed with the state — within 30 days after the well completion or 90 days after drilling is completed, whichever is earlier.
Anderson said the state should tweak some of the reporting rules.
But he also said the current system is better than nothing, which is what was publicly disclosed before the industry launched FracFocus voluntarily and states such as Texas started to require that operators use it.
"To give credit where credit is due, there is a lot of data that was not there before," Anderson said. "There's also a lot of data that's not there (now)."
jhiller@express-news.net
Twitter: @Jennifer_Hiller
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