WASHINGTON (Reuters) - Natural gas drillers should reveal all chemicals they use in the drilling technique called "fracking" used to tap deep shale reserves, a government panel said on Thursday, even though the risk of water pollution from the technique is "remote."

The U.S. Energy Department's natural gas advisory subcommittee urged regulators to require drillers to release more information about the impact of hydraulic fracturing, which is essential to tapping the nation's plentiful shale gas reserves.

The panel said in an interim report that it "shares the prevailing view that the risk of fracturing fluid leakage into drinking water sources through fractures made in deep shale reservoirs is remote."

"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," the report said.

Some neighbors of drilling sites have claimed that fracking polluted their drinking water, and environmental groups and public health advocates have urged the government to require disclosure of chemicals used by drillers. But companies have insisted that they be allowed to safeguard that information because it is proprietary.

Critics and even some members of the industry have charged that companies have used intellectual property issues as an excuse to withhold information about fracking.

Tasked by the Obama administration with identifying steps to improve the safety of shale gas drilling, the seven-member panel outlined a series of recommendations for increasing transparency and strengthening oversight of the practice.

Hydraulic fracturing, or fracking, involves injecting a mix of water, sand and chemicals into rock formations at a high pressures to release oil and gas.

Innovations in the technique have led to an explosion of shale gas development, but the expansion has also prompted public backlash. Environmental groups and some landowners believe that the practice has fouled drinking supplies, making livestock and children sick and tap water flammable.


In response to public concerns, some companies have begun releasing more details about the composition of fracking fluids, but the panel said "progress needs to be accelerated."

The panel's report called for the creation of a national database to compile information about shale gas wells.

The industry should also establish an organization to improve operating techniques, the report said.

"The specific thing that we believe industry can do and are on the path of doing is to more consistently and with a greater commitment push for best practices and measuring and disclosing the results of what they're doing in the field," John Deutch, the panel's chairman, told Reuters in a phone interview.

The release of more data will not only help to reassure the public, but will help regulators develop new rules and better address potential environmental hazards, Deutch said.

The report also calls for overhaul of the management of the millions of gallons of water used in the process and an update to rules to fully protect surface and ground water.

States and local governments should create systems to measure water quality prior to shale gas production, to better evaluate the impact, the report said.


Concerns over fracking have led to calls for more federal regulation, which is currently mostly exempt from oversight by the Environmental Protection Agency under the Safe Drinking Water Act.

While this matter was outside the scope of the panel, Deutch said "it is a subject that deserves examination."

"My own experience would say that for private lands, the differences around the country in terms of both geology and practice mean that states are really the place to begin," said Deutch, an MIT professor and former under secretary for energy in the Carter administration.

Industry and green groups have complained about the composition of panel, which is made up of academics, energy analysts and environmentalists.

The American Petroleum Institute, a major oil and gas trade group, has said the panel lacks a member with shale gas development expertise, while green groups have argued that most of the panel has financial ties to the oil and gas industry.

The panel, which gathered its information over 90 days, will hold a public meeting discussing its findings next week.

A final report from the group is due in November.

(Editing by David Gregorio)