Task Force Draft for public comment

1 

# Secretary of Energy Advisory Board
Task Force Report on FracFocus 2.0
February 24, 2014

U.S. Department of EnergyTask Force Draft for public comment

2 Executive Summary

This report presents the findings and recommendations for the Secretary of Energy Advisory Board (SEAB) Task Force on FracFocus. This Task Force report builds upon and extends the 2011 SEAB Subcommittee report on the environmental impacts of
unconvention al gas production.

The Task Force believes that the FracFocus experience to date demonstrates the ease of disclosure of chemicals added to fracturing fluid for companies, the value of this disclosure for the public, and the importance of public confidence in the quality and accessibility of the FracFocus chemical registry data. It has accomplished a good deal and shows the capacity to make improvements at modest additional cost. FracFocus has greatly improved public disclosure quickly and with a significant degree of uniformity.

The Task Force recommends a number of actions that will further improve the effectiveness of the FracFocus dis closure of chemical additives and improve transpare ncy for regulators, operating compani es, and the public. R ecommendations are made for improving the accuracy and completeness of registry submissions. In addition, t he Task Force believes that an independent audit to assess the accuracy and compliance of the process will be useful for all stakeholders

. A large fraction of reporting wells claim at least on e trade secret exe mption. The Task Force favors full disclosure of all known constituents added to fr acturing fluid with few, if any exceptions

. A “sy stems approach” that reports the chemicals added separately from the additive name s and product name s that contain them , generally should provide adequate protection of trade secrets. The Task Force further calls for state and federal regulators to adopt standards for making a trade secret claim and establish an
accomp a n y ing compliance process and a challenge mecha nism.

The Task Force also makes recommendations for improvin g data storage and retention collected by FracFocus, the budget required for FracFoc us to operate and upgrade itsTask Force Draft for public comment

3 service and system, as well as for how these activities might be financed by a combination of DOE support and/or a user charge.

All members of the Task Force support this report.

Context for the Task Force Deliberations

On Nov ember 26, 2013 Secretary of Energy Moniz charged the SEAB to establish a Task
Force to review FracFoc us 2.0, the registry for public disclosure of chemical constituent s added to hydraulic fracturing fluids used in unconventional oil and gas production. The Ground Water Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC), two quasi

- public organizations dedicated to conservation and environmental protection, operate the FracFocus registry

. 1 The Secretary’s charge to the Tas k Force inclu ded in Appendix A, instructs the Task Force to examine seven topics related to the operation of FracFocus. Task Force membership is given in Appendix B.

The Task Force was formed to respond to a request from Senator Wyden, chair of the
Senate Energy Committee , to review FracFocus. The Secretary turned to SEAB because a subcommittee of the board had undertaken a study to identify measures to reduce the environmental impacts of unconventional gas production in 2011

. 2 President Obama had di rected former Secretary Chu to form this Subcommittee as part of the President’s " Blueprint for a Secure Energy Future

. " 3

The 2011 SEAB Subcommitt ee report made over twenty recommendations for reducing the environmental i mpact of unconventional gas operations. 4 A central find ing of the 2011 Subcommittee report was the importance of a process of continuous improvement in various aspects of shale gas production that relies on best practices and is tied to

1 Information about FracFocus can be found on the web at http://fracfocus.org/

. 2 The Subcommittee’s interim and final repo rt in August and November 2011, respectively can be found at http://www.shalegas.energy.gov/

. 3 Available at Blueprint for a Secure Energy Future (pdf) , The White House, March 30, 2011. 4 Page 1, August 2011 Subcommittee report.Task Force Draft for public comment

4 measurement and disclosure in order to achieve progressively lower levels of environmental impact. 5 Whi le the focus of the Subc ommittee was unconventional shale gas production the Task Force believ es that most, if not all, of its findings apply to both unconventional oil and gas exploration and production.

Se veral of the 2011 Subcommittee recommendations were directed at increasing transparency and disclosure in order to su pport state and national r egulations and to meet public concer ns about hydraulic fracturing. The Subcommittee specifically recommended DOE support for (1) the then new FracFocus website for voluntary disclosure of fracturing fluid composition ; (2) STRONGER (the State Review of Oil and Natural Gas Environmental Regulation ) ; and (3) the Groundwater Protection Council for expansion of the Risk Based Data Management System (RBDMS) , so that similar projects might be expanded to other aspects of shale gas and oil development. As discuss ed below several additional suggestions were made bearing on the disclosure of fracturing fluid chemicals a nd on the operation of FracFocus. Acc ordingly, it was appropriate for Secretary Moniz to turn to SEAB to review and extend its findings on disclosure of fracturing fluid chemical composition and the operation of FracFocus in response to Chairman Wyden’s request

.
Questions for the Task Force to address

The terms of reference suggest s the Ta sk Force examine seven matte rs:
(1) Evolution of the operation of FracFocus 2.0 toward timely, complete, and accurate data storage

. (2) The extent to which state and federal regulatory bodies are using FracFocus to meet regulatory disclosure requirements.

5 P ages 1 to 5 , August 2011 Subcommittee Report

.Task Force Draft for public comment

5 (3) Under standing the breadth of data maintained by FracFocus , how frequently companies are using the proprietary exemption to avoid disclosure of fracturing fluid composition , and the st andards for the use of this exemption

. (4) Understanding the difference in federal data custody requirements and FracFocus practices. (5) Increasing the utility of FracFocus by maintaining it as a data base with tool s suitable for analysis by regulatory bodies, companies, and the public. (6) Expanding the s cope of the FracFocus registry to other areas, such as the water quality data in neighboring water wells collected pr ior to well stimulation or post production. (7) Adequacy of funding for FracFocus activities and sugg estion for possible alternative arrangements. The 2011 Subcommittee addressed several of these issues, in particular , (2), (3), (5), and (7). The current report is informed by this work and, where noted, the 2011 findings have been confirmed and/or extended

. Addressing the Questions

(1) Evo lution of the operation of FracFocus 2. 0 toward timely, complete, and accurate data storage

. The following table summarizes the rapid growth of key
FracF o cus operating factors and the map below displays the states that require chemical disclosure. It is notable that between 2011 and 2013 the number of registered wells increased more than four fold.Task Force Draft for public comment

6 Operating Factors 2011 2012 2013 States requiring FF disclosure 2 8 14 # of wells registered 14,246 24,570 62,410 FF budget 6 $000 $5 27 $1,4 38 $1,4 06

The two important trend s are the growth in the number of wells entered into the registry and the increase in the number of states that use FracFocu s as part of their disclosure requirement fo r the composition of fracturing fluids. The evolution of FracFocus from version 1.0 to 2.0 enables the system to respond to several of the 2011 Subcommittee recommendations. The registry ’s back end has als o converted from spread sheet based to a web

- based data entry process.
Initially FracFocus directed those using the site to disclose all chemical s used in frac turing fluids that appear on Material Safety Data Sheets ( by common name and , more importantly, by their Chemical Abstract Service, or CAS , identif ication number).
Chemicals on these sheets are believed to be hazar dous to workers in an occupational

6 Source: FracFocus. These funds come from the DOE, th e American Petroleum Institute, American Natural Gas Alliance, Environmental Defense Fund and other organizations.Task Force Draft for public comment

7 setting as determined by the Occupational Safety and Health Administration , ( OSHA )

. MSDS reporting does not include other chemicals that might be hazard ous to humans in an environmental setting or that might be harmful to the environment

. Thus the 2011 Subcommittee recommended that disclosure include all chemical s intentionally added to fracturing fluid, not just th ose that appear on MSDS. FracFo cus 2 .0 follows this
recommendatio n now asking for “additional ingredients not listed on MSDS.”

Full disclosure means the public reporting of all constituents ad ded to fracturing fluid injected into a well. Constituents include both “chemicals” and “additives ” such as surfactants , friction reduction agents , and tracers that are composite material

co mposed of several, perhaps many, molecules. As discussed below this distinction is important because companies frequently believe that it is the chemical compositi on of additives (or formulated materials ) as a product that is most like ly to have proprietary value that deserve exemption from disclosure as a “trade secret.” Most states currently require disclosure of both chemicals and additives.

C urrently , disclosu re does not require any information about the chemistry of the make

up water that is traditionally 90% by weight of the fracturing fluid. The water used to mix the fracturing fluid is normally fresh water taken from water wells, lakes or rivers. However, during the past few years, it is becoming increasingly common to recycle fracture fluid that is pro duced from wells that have recently experienced physical or chemical fracture t reatment . In either case, the chemicals that are part of the make

- up
water a re not always measured and usually not reported as part of FracFocus 2. 0. Disclosure of the wat er analysis of the make

- up water used in hydraulic fracturing would be appropriate , if data were available

. It is important to assess the accuracy of well data disclosed on FracFocus since transparency implies correct information has been filed. Examination of a limited sample of records from FracFocus 2.0 indicate s a variety of errors, partly due to many different companies contributing data to an in dividual FracFocus record, b esides the operator of the well. We recommend:Task Force Draft for public comment

8 (a) Frac Focus should examine the entire data entry workflow and structure, looking for opportunities to simplify data structure and steps for data entry to reduce the probability of da ta entry errors, and assuring accuracy. Simple data entry reduces errors. (b) FracFocus should improve the quality of the data entered into the system , especially the accuracy and completeness of reported CAS numbers. CAS numbers are the unique and univer sal identifier of individual chemicals that might go under a variety of different names. F rac F ocus 2. 0 has introduced basic error checking that alerts users if an entered CAS number is in the proper format, but not whether the CAS number matches the chemic al name, or even if the CAS number is currently in use. While FracFocus does not assert authority to reject operator entries, the automatic validation system should be expanded and improved. (c) When FracFocus discovers an error in a company submission FracFocus should inform the company and indicate on the web site that the submitted data are in some doubt. Such a notice on the FracFocus web site would inform the regulatory authorities and th e public that there is an issue and serve as in centive to the company to revise the submission. (The Task Force understands that the
FracFocus variant in use in British Columbia contains this feature). This practice would also encourage operators to assure that CAS numbers received from manufacturers and suppliers are accurate. (d) FracFocus should make provisions for submissions to include more information about the water used as a base fluid, for example whether it is 100% fresh water

or does it contain a percentage of r ecycled fracturing fluid

. Such data in
FracFo cus would be available to EPA, state regulators and the public. (e) In some instances, the FracFocus disclosure form does not explicitly call for information required by state disclosure rules. For example, with respect to chemical concentrations, some states require actual concentrations, while the form only requests maximum concentrations. The Task For ce re commends thatTask Force Draft for public comment

9 states be attentive to ensure compliance with more specific state disclosure requirements, especially where FracFocus requires less or different information.

FracFocus and the states that require disclosure , through FracFocus or more gen erally, have different ways of assessing compliance with respect to timing, accuracy, and substance of the disclosure. The Task Force believes that an understan ding of how well this disclosure system is working would be enhanced if an independent audit we re conducted to assess the accuracy and compliance of the process

. This would benefit all stakeholders in FracFocus

– regulators, companies, and the public. The audit should be sponsored by an independ ent entity with the objective of shedding light on Fra cFocus system operation s in addition to the information it houses

. Accord ingly, the Task Force recommends that DOE ’s Office of Fossil Energy contract with a suitable audit or consulting firm to perform this audit . The audit should include (1) the accuracy of the operator's field records; (2) a comparison of the operator's field records to th e service company field tickets; (3) a comparison of the service company's field ticket to t he service company final report; and (4) the accuracy of the data entry into FracFocus 2.0. The audit firm should consider sample size and diversit y to ensure a meaningful review and should examine, among other factors, trade secret exemption claims



## .
(2) The extent to which state and federal regulatory bodies ar e using FracFocus to meet regulatory disclosure requirements

. FracFocus has evolved beyond a strictly voluntary effort as state regulators and firms have recogniz ed the level of public concern about possible health and environmental consequences of chemical
constituents used in fracturing fluid to water supplies. Voluntary disclosure offered an immediate and practical response to growing public concern about chemi cal use for both industry and regulatory bodies.

As of November 1, 2013, over 20 states have adopted some level of disclosure requirements, of which 14 states require the use of FracFocus. Inspection andTask Force Draft for public comment

10 enforcement will require increased effort on the par t of state regulators

. 7 FracFocus makes an important contribut ion by facilitating the flow of information to states through the Risk Based Data Management System ( RBDMS)

. (3) Understanding the breadth of data housed in FracFocus, how frequently companies are invoking the trade secret exemption to avoid disclosure of fracturing flui d composition, and the standards for the use of this exemption

. The Task Force believes that full disclosure of all known constituents added to fractur ing fluids is desirable. It is desirable because transparent disclosure addresses the public concern, justified or not, about the risk these chemicals present to drinking water supplies.
T rade secre t claims that shield disclosure are made to protect per ceived intellectual property value of the chemical treatment. The Task Force has no wish to constrain innovation for improved environmental characteristics or perf ormance/cost attributes
of chemical stimulation , or to limit the role of proprietary informa tion as part of the innovation process . Indeed, as discussed below , the Task Force believes this disclosure can be accomplished with little or no risk to disclosing proprietary information. Regulatory bodies have the authority to adopt binding disclosure requirements. The Task Force is challenging FracFocus to operate in a manner that encourages full disclosure with few, in any trade secret exceptions.

The 2011 Subcommittee strongly endorsed full disclosure of the chemical composition of fracturing fluids:

Disclosure of fracturing fluid composition: The Subcommittee shares the prevailing view that the risk of fracturing fluid leakage into drinking water sources through fractures made in deep shale reservoirs is remote. 8 Nevertheless the Subcommittee believes there is no economic or technical reason to prevent public disclosure of all chemicals in fracturing fluids, with an exception for genuinely proprietary information. While companies and

7 Hydraulic Fracturing

– Chemical Disclosure Requ irements , Congressional Research Service, Brandon Murrill & Adam Vann, June 19, 2012. R42461. 8 Fracturing fluids can reach surface and near

- surface water supplies , for example, if there is poor well completion or surface accidents during production

.Task Force Draft for public comment

11 regulators are m oving in this direction, progress needs to be accelerated in light of public concern. 9
The Subcommittee believes that the high level of public concern about the nature of fracturing chemicals suggests that the benefit of immediate and complete disclosure of all chemica l components and composition of fracturing fluid completely outweighs the restriction on company action, the cost of reporting, and any intellectual property value of proprietary chemicals. The Subcommittee believes that public confidence in the safety of fracturing would be significantly improved by complete disclosure and that the barrier to shield chemicals based on trade secret should be set very high. Therefore the Subcommittee recommends that regulatory entities immediately develop rules to require di sclosure of all chemicals used in hydraulic fracturing fluids on both public and private lands. 10

The Task Force endorses this finding.

The FracFocus disclosure exemption is based on “trade secret” as defined in OSHA regulation 1910.1200(i)(1). 11 The Task Force has learned from FracFocus that 84 % of the registered wells invoked a trade secret exemption for at least one chemical , with the range by state extending from 57 % to 100% , since FracFocus 2 .0 went operational in June of 2013. O n average, tr ade secret exemptions were claimed for 16% of the chemical entries recorded in the FracFocus database between June and December
2013. 12 (See Appendix C). While there are many different ways to assess the incidence of the trade secret exemption claim ( for examp le, by well, by chemical, by mass, by state, or by operating company) 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

. More can be done.

9 Page 3, August, 2011 Subcommittee Report. 10 Page 24, August 2011 Subcommittee Report. 11 This report uses the narrower “trade secret” term rather than “proprietary information” or “confidential business information” because it is more consistent with the call for a “high bar” for disclosure. 12 A chemical entry occurs each time that a chemical is dis closed in an individual well. The percentage of chemical entries is not the same as the percentage of unique chemicals claimed as a trade secret, but it is one of the more useful metrics for understanding the incidence of trade secret claims. But, recall the reporting complication s mentioned on page 11

.Task Force Draft for public comment

12 There may be reporting complication s that can be masking , to some extent , the number of trade secret exemptions on FracFocus and the number of trade secrets claimed. If a submission leaves the CAS field blank or reports zero concentration of uses the “less than” symbol, the FracFocus users may interpret such instances as a trade secret claim. One company reviewed for the Task Force their internal records of the 1500+ disclosures made to FracFocus after 6/1/2013 and found 120 separate trade secret claims, involving 400 chemicals from almost 58,000 chemicals reporte d in all the disclosures. The company was unable to de termine f rom the FracFocus data base the chemical agent claims attributed to this particular 1500+ sample. There seems to be a discrepancy between the trade secret claims data indicated by FracFocus and the internal records of some companies that suggest a much low er incidence of trade secret claims for those companies . The work recommended by this Task Force should shed light on this important issue.

This Task Force believes that the goal should be to have very few trade secret exemption claim s from discl osure. The public is clearly concerned about the nature of the chemical s used in hydraulic fracturing . It is much to industry’s advantage to meet this concern

.

The federal Emergency Planning and Community Right to Know Act 13 and laws enacted in several states give officials access to chemical trade secret i nformation in times of crisis in order to give emergency first resp onders and health officials access to information they need. So the impression that trade secrets bar public access to information in all ci rcumstances is incorrect. The Task Force endorses strong provisions

to provide access to trade secret information in em ergency situations but goes f urther in advocating disclosure

.

13 Th e objective of the Emergency Planning and Community Right

- To

- Know Act (EPCRA) is to: (1) allow state and local planning for chemical emergencies, (2) provide for notification of emergency releases of chemicals, and (3) address communities' right

- to

- know about toxic and hazardous chemicals. However, the access formally is only to chemicals that appear on Materials Safety Data Sheets (MSDS) See http://www.epa.gov/oecaagct/lcra.htmlTask Force Draft for public comment

13 The Task Force urges industry to pursue complete disclosure rather than pr o tecting trade secrets of uncertain tech nical merit , especially since compliance ha s very low , if

any, risk of disclosing proprietary information if submission is organized by the chemicals rather than the additives or pr oducts to the fluid. A list of che micals that includes the contributions from all the constituents added makes it extremely difficult to reverse engineer to determine which chemicals and in what proportions these chemicals are present in a particular additive or product with specific trade name. Thus trade secret protection generally can be accomplished by reporting a list of products and chemicals added without disclosing which chemical is in each product. In sum, t he
T ask Force recommendation for chemical disclosure is

• No trade secret disclaimers unless documented and attested as they do in Wyoming or Arkansas

- but the fewer the better

.
• Repor t the complete list of chemical by their CAS numbers and quantities added

.
• Report a complete list of products without linking to the list of chemicals 14

Operators report that chemical suppliers or pumping services demand trade secret protection for their products. The Task Force believes that if the leading operators and oil field servic e companies establish practical protocols for data transfer across the supply chain , and clear requirements for their suppliers , then supplier insistence of trade s ecrets will be greatly reduced and possibly disappear.

The Task Force believes three steps should be taken to further explore way to reduce the use of the trade secret exemption :
(a). Assemble accurate data about the nature and extent of trade secrecy claims

ac ross chemical, states, operators, suppliers and time

. Under the auspices of DOE

14 The reporting by disaggregated chemicals in known in indu stry practice as the “systems approach” and it is used by at least one large oil field service supplier

.Task Force Draft for public comment

14 Fossil Energy and w ith the cooperation of FracFocus, it should be possible to complete this study within four to six months

.

T h e study should include: (1) trends in trade secret claims; ( 2 ) the percentage of wells with one or more hydraulic fracturing chemicals that are claimed to be trade secret; ( 3 ) for wells with trade secret claims , the average number of claims , the average percentage of chemicals used in such wells tha t have been claimed as trade secret, and the percentage by mass of chemicals used in such wells that have been claimed as trade secret ; (4) the degree to which the incidence of trade secret claims varies by operator and supplier; (5) the overall percentage of hydraulic fracturing chemicals , on a state and national basis , that are claimed to be trade secret; and ( 6 ) how commonly particular chemicals claimed as trade

secret are used

. (b). States and federal regulators should establish a s tandard for claiming the exemption . T he Task Force notes the criticism that has been raised that while trade secret law is generally standardized across the country, there is no accepted standard for asserting a trade secret exemption in the hydraulic fracturing context and no st andardized compliance procedure to verify the claim for protection. 15
The Task Force believes the standard for disclosure exemption should be very high. We recommend that states use the State Review of Oil and Gas Regulations, ( STRONGER ) mechanism to craf t and adopt stringent criteria for trade secret exemption to disclosure and a process for validating compliance. STRONGER should begin by reviewing the practices in different states to determine the effect iveness of different approaches and, when availabl e, draw on the results of the DOE Fossil Energy review in subsection (a) above and the independent audit we recommend above of the FracFocus disclosure system, in particular the data collected on trade secret claims.

15 K. Konschnik, M. Holden, and A. Shasteen, Legal Fractures in Chemical Disclosure Laws , Harvard Law School, Environmental Law Program, April 23, 2013.Task Force Draft for public comment

15 (c). State and federal regulators should e stab lish compliance of trade secret claims and challenge mechanisms once a procedure is in place. Every trade secret exemption procedure adopted by a state should be accompanied by mechanisms for determining compliance (including certification by the company invoking exemption that the procedure has been followed) and for interested parties from the public to raise challenges.

Th is work and its results will be of interest to the U.S. Environmental Protection Agency

an d the Bureau of Land Management ( B LM ) of the Department of Interior. Therefore the study and work recommended on trade secrets should be coordinated with these federal agencies. The BLM recently proposed disclosure policy regulations. 16 The se proposed disclosure regulations do not yet me et the high disclosure standards that the 2011 Subcommittee recommended that BLM adopt. 17 Therefore, the Task Force recommends that any trade secret exempti ons permitted by BLM in its regulations for hydraulic fracturing on federal lands include a rigorous process of claiming trade secret exemptions and robust trade secret verification and challenge mechanism s.
(4) Understanding the difference in federal data custody requirements and FracFocus practices . The Task F orce understands that there are difference s in the data custody practices of FracFocus and the more stringent and comprehensive federal data custody standards. It is not unusual to find private sector data practices different from and/or below federal standards with respect to security , storage, and retention. The Task Force would encourage and welcome improvement s in FracFocus data custody practices.

16 Department of Interior, BLM, 43 CFR Part 3160 , [WO

- 300

- L13100000.FJ0000] RIN 1004

- AE26 , Oil and Gas; Well Stimulation, Including Hydraulic Fracturing, on Federal and Indian Lands

. The BLM proposed rule allows companies to identify confidential inform ation that is exempt from public disclosure under the Trade Secrets Act or other Federal law. However, if BLM determines that the asserted confidential information is not prohibited from disclosure by Federal law, BLM may make that information available to the public. The rule does not specify the process by which the BLM would assess or deny the protection , nor a procedure for public challenge of the claim

. 17 Page 6, November 2011 Subcommittee Report.Task Force Draft for public comment

16 FracFocus has an informal policy for permanent data retention. The Task Force recommends that FracFocus formalize a more robust policy for its public data custody, data management , security, storage and retention practices and adopt an explicit policy of long

- term data retention . This policy should include provision for data custody if the organizations that currently sponsor FracFocus decide in the future to drop the activity.

The Task Force is aware of discussions underway between FracFocus and DOE’s Energy Information Administration to include FracFocus as an element of EIA’s contemplated National Oil and Gas Information Gateway

. This relationship should prove productive for FracFocus , and the RBDMS with which it is now integrated, as a means to identify further opportunities for improvement of data management

. Standards that are important for FracFocus to adopt include: protecti ons against unauthorized alteration or deletion of data; long

- term data retention policy including both original and any updated submissions , and audit trails

. Additionally, FracFocus should amend its “terms of use” to eliminate restrictions on sharing an d aggregation of data on the site.

To ensure that data will be subject to government open records policies that apply to publicly held data, the T ask F orce also recommends that any state or federal agency that adopts FracFocus as a reporting venue should e xplicitly adopt a policy to download data or otherwise take possession of information from FracFocus on a regular basis (e.g. , weekly)

.

T he Task Force reco gnizes that the RBDMS program, the oil and gas regulatory agency datab ase used by the majority of oil and gas producing states to manage and analyze oil and gas program data and water r esources information, has developed a module to interface with the FracFocus website. This module will allow regulators to automatically download and parse raw data submitt ed to FracFocus, streamlining the data transfer process and permitting statistical analyses and auditing functions. Putting this module to work in individual states can be done quickly but requires certain additionalTask Force Draft for public comment

17 programming. GWPC should accelerate the rollout of this RBDMS module to states that receive chemical disclosure data through FracFocus.

(5) Increasing the utility of FracFocus by maintaining it as a database with tool s suitable for analysis by regulatory bodies, companies, and the public . The 2011 Subcommittee report noted that the FracFocus regist ry was not maintained as a data base and tools were not available to analyze the information to answer questions of interest to regulators, operating companies, and public interest groups.

By 2013, Fr acFocus had made important progress in upgrading the reg istry to act as a database, with varying levels of access for the public and for state regulators. T he Task Force recommends that DOE fund FracFocus to upgrade its website to be a more usable interactive database

. 18 DOE’s Office of Fossil Energy should commission an independent

cost estimate of a project to con struct a fully interactive data base

.

T he following are a non
- exhaustive list of improvements that FracFocus should consider making :

a. All ow for searching by any field included in a FracFocus submission record (including additive trade name, additive purpose, chemical supplier, date submitted, etc

. ). b. Eliminate the 2000 record display lim it, or allow a “next” function. FracFocus currently returns a maximum of 2000 records for any search, without indicating which 2000 are being presented

. FracFocus should either return all results, or allow for a “next 2000” functionality.

c. Solve the CA S number concatenation problem. T o the exten t that the public is using data scrapers in order to transfer information from FracFocus PDFs to private databases (an activity that promotes better understanding of the
Frac Focus data in the absence of raw database availability), researchers are

18 Pages 13

– 15, August 2011, Subcommittee ReportTask Force Draft for public comment

18 running i nto problems that arise from how CAS numbers are sometimes entered in batch instead of separately, resulting in CAS numbers appearing together on one line in an unbroken string. F racFocus should modify how the PDFs are created to eliminate this problem. d. A l low batch downloads of PDFs. C urrently, the system only permits the downloading of a single well’s chemical disclosure PDF at a time

.
e. Address the SEAB 201 1 report recommendation that the system “include tools for searching and aggregating data by chemica l, well, by company, and by geography

. ” 19 One way to do so would be to release the full contents of the FracFocus database in raw, machine

- readable form on the FracFocus website.

There is interest in understanding the value of FracFocu s and who is using t his resource. The Task Force recommends that FracFocus include on its website a dropdown menu requiring the user when entering the s ystem to identify their affiliation or perspective :

o State government official

o Federal government official

o Local government official

o Non

- Governmental Organization

o Operating company

o Service company

o Landowner

o Mineral owner

o Educator

o Research Organization

o General public

o Other (6) Potential for broadening the scope of FracFocus to include any water quality data regarding surrounding water sources both before and after hydraulic fracturing drilling activity. There have been several other proposals for broadening the sco pe of FracFocus as well. Examples of these suggestions are to require disclosure at the registry of (a) theTask Force Draft for public comment

19 chemical composition of flow back and produced water from hydraulically fractured wells; (c) concentration of radioactive elements in the flow back water from the geologic al formation; (d) disclosure of pre

- fracturing information such as chemicals planned for use; and (e) “master lists” of chemicals used by particular companies in a state in a given year.

Each of these suggestions (and others) is of potential interest as part of the regulatory process. But each of these measures also poses challenges for a registry for which companies’ disclosure submissions remain

– in many instances

– voluntary . Some of these suggestions would require, for example, definitions that respect highly variable geologies, quality control of data submitted by producers with diff erent technical sophistication, and the necessary complex rules for inclusion. T he exploration of possible extensions of the concept of the registry to a wider range of use may indeed be productive but we note that the success of FracFocus to date is very much a consequence of its narrow focus and therefore we do not endorse any specific extensions at the present time

. However, within the scope of hydraulic fracturing chemical disclosure, the Task Force notes that the current functionality of FracFocus 2

. 0 does not meet all of the state requirements, such as pre
- frac turing disclosure in Wyoming and “master list” requirements in Arkansas. The se are matters that need to be addressed by the RBD M S mechanism of the Groundwater Protection Council and the Interst ate Oil and Gas Compact

. The 2011 Subcommittee recommended the creation of a web portal that would aggregate a wide range of public information on shale gas development. 20 Th is Task
Force supports this recommendation, and stresses the importance of making data from state and federal regulatory agencies and other sources public

-- including statistics regarding methane emission measurement s, enforcement information, and other

20 Pages 13

– 15, August 2011 Subcommittee Report.Task Force Draft for public comment

20 material

– as part of a comprehensive national database. The portal should be open to the public fo r use to study and analyze oil and gas operations and results.

(7) Stable funding for FracFocus activities

. The Task F orce like the 2011 Subcommittee,
i s concerned that FracFocus have a stable source of funding. Up to the present, support has come from a combination of sources: the DOE, the API, and other organizations. The current level of funding is about $700,000 per year. Currently, the annual cost of maintaining Frac Focus is approximately $1 milli on. Measured initiatives to update the
FracFocus 2 .0 website, provide training for the use of the FracFocus system, and to increase capability, ( e.g. , well finder emergency response, implementation of integration between FracFocu s and RBDMS ), are programmed for an additional expenditure level of $500,000 per year for the period 2014 to 2016.

The Task Force believes that a funding level of about $1.5 million per year is justified to cover the current FracFocus 2.0 activities mentioned above and the additional wor k recommended in this report: (a ) making the website a use r
- friendly database; (b ) carrying out some audits of the accuracy of data deposited in the registry; and (c) coordinating with STRONGER to craft and adopt stri ngent criteria for trade secret exemption and a process for validating compliance

. Additional initiatives put forward by FracFocus could well justify a higher budget especially projects that are integ rated into the RBDMS.

At present the modest (< $1 million) budget for FracF ocus is covered by a DOE grant, occasional contributions from a state, and from two oil and gas industry association s

. The Task Force believes that the importance of FracFocus justifies a stable source of funding. There are t wo options for accomplishing this: (a) a higher multi

- year grant or contract from DOE or (b) a modest user fee assessed on each well registered. For every
1 0,000 wells registered each year, a $50 registration fee per well would produce a revenue stream of $ 0.5 million for FracFocus. A combination of DOE support and use fee wi ll comfortably provide for Frac Focus. Accordingly, The Task Force recommends that DOE move to establish a stable multi

- year budget for FracFocus employing one orTask Force Draft for public comment

21 both of these mechanisms

. To ensure public confidence in the integrity of FracFocus, it should take steps to make clear that any industry contributions do not appear to influence FracFocus operations in any way.Task Force Draft for public comment

22 Appendix A

– Secretary Moniz charge to SEAB fo r the Frac Focus Task ForceTask Force Draft for public comment

23 Appendix B

– Task Force membership
Organization affiliations are listed for identification purposes only. The Task Force report integrates the contributions of individual members and should not be associated with the view of any of the listed organizations.

* Frances Beinecke President, Natural Resources Defense Council

* Rafael L. Bras Provost and Executive Vice President for Academic Affairs, Georgia

Institute of Technology

* John Deutch MIT Chemist and Former Under Secretary of Energy

– Task Force Chair

* Persis Drell Professor of Physics, Stanford University and Former Director, SLAC

National Accel erator Laboratory

– Ex Officio SEAB Co

- chair
Stephen Holditch Professor of Petroleum Engineering, Texas A&M
Fred Krup p President, Environmental Defense Fund

* Dan W. Reicher Executive Director, Steyer

- Taylor Center for Energy Policy and Finance,

Stanford University and faculty member, Stanford Law School and Graduate School of Business

* Ram Shenoy Chief Technology Officer, ConocoPhillips
Susan Tierney Managing Principal, Analysis Group; Former DOE Assistant

Secretary for Policy

* Daniel Yergin Vice Chairman, IHS and Founder of IHS Cambridge Energy Research

Associates

* SEAB memberTask Force Draft for public comment

24 Appendix C

- Data from FracFocus2