Harvard Law: Fracking Disclosure Site Fails the Test

The national database registry, FracFocus.org has come under scrutiny by a Harvard Law team, which says the voluntary registry that is used by oil and natural gas extraction companies has some “serious deficiencies” in the way it reports fracking disclosures.

The website, FracFocus.org was created in 2011 in response to public concerns about chemicals used an oil and natural gas extraction procedure called “fracking.” The procedure uses a water-based chemical process to fracture rock below the earth’s surface. To date, only 18 states require public disclosure of the chemicals used in the process. Eleven of those states direct or permit companies to utilize the privately run database for disclosure purposes.

But according to Harvard Law’s report, Legal Fractures in Chemical Disclosure Laws, the website falls far short in promoting transparency of the fracking chemicals and methods used by companies.

For example, the extent of the information disclosed by a given company may be determined by its own definition of trade secrets – information that the company feels would jeopardize proprietary information. There is no governmental oversight to validate whether the use of a specific chemical or combination of chemicals is actually a trade secret. The report notes that what one company may feel is public information may be determined by another company to be secret and outside of the bounds of what it is required to disclose.

Other problems include:

• A failure on the parts of FracFocus and state agencies to make sure that companies are recording information accurately. The authors found that 29 percent of the Chemical Abstract Services numbers (CAS; the numbers assigned to specific chemicals that are used in the process) were fictitious or entered incorrectly.

• A lack of state reporting forms, leading to inconsistent disclosure procedures.

• An online search system that was not user-friendly and actually prevented users from cross-checking documents against each other for accuracy.

• Poor oversight of when disclosures are actually posted. Most states assign penalties to companies that file disclosures late, and according to the state, the penalties can amount to ten of thousands of dollars. However, FracFocus does not notify states when a disclosure is posted. The report notes that this makes it harder for states to enforce disclosure laws.

“(When) state laws direct companies to make disclosures on FracFocus, states cede oversight of these provisions to a non-regulatory third party. FracFocus does not notify a state when the site receives a disclosure form about a well in that state. Nor can most states readily determine when a disclosure is made.”

Policy Director of Harvard Law’s environmental program, Kate Konschnik, said that the deficiencies also make it harder for the public to obtain accurate information on the very chemicals being used in fracking operations in their communities.

“In many instances, states have written tough disclosure requirements, backed by robust public information laws. However, when those same states direct companies to report to FracFocus, they give up a lot of oversight authority. Meanwhile, the public’s ability to seek additional information or challenge trade secret claims is lost when an agency is not in possession of the disclosures.”

FracFocus.org was created by the Interstate Oil and Gas Compact Commission and the Groundwater Protection Council in April 2011. Konschnik and her team members, Margaret Holden and Alexa Shasteen, point out that the website isn’t a regulatory body, “nor does it verify the information submitted by producers and suppliers.”

Therefore the report suggests that “reliance on FracFocus by numerous states as a de facto regulatory mechanism sends a strong signal to industry that careful reporting and compliance is not a top priority. Thus, it is worth reconsidering reliance on FracFocus as a regulatory compliance tool."

The report recommends that states enforce minimum standards for compliance.

“Only two states have required anything of FracFocus – Colorado and Pennsylvania - directed FracFocus to become a searchable database by January 1, 2013 – and the registry failed to comply,” says the report. Both states had mandated further action if the registry was not available by that date, and according to the report, neither state has yet to follow through with additional oversight requirements.

The report also raised concerns about the Bureau of Land Management’s tentative plans to use the site as a disclosure method for fracking operations on public lands.

The team made several recommendations, including that “BLM should set forth basic requirements for a third-party disclosure registry that must exist for publication on that site to be deemed in compliance with the federal disclosure law …If FracFocus cannot meet the new standards, perhaps a competitor site can.”

In short, Konschnik and the team recommend a more vigorous oversight by states and the federal government of voluntary disclosure systems like FracFocus to ensure requirements are being met, that the information is satisfactorily accessible by the public and that companies are not obscuring information under the guise of trade secrets.

“Congress should debate the implications of submitting reporting requirements to a non-regulatory third party,” concludes the report, noting that some legal issues may not have been considered at the time of its implementation. “A hearing could review these implications and suggest ways to improve public access to information.”

Photo of natural gas site courtesy of Daniel Foster.

Photo of shale oil extraction site courtesy of A-M-Jervis.