Last week, California regulators proposed new rules to oversee hydraulic fracturing across the state, and depending on whom you ask, they are either a move toward stronger oversight of the extraction of the state’s oil reserves, or a thinly veiled capitulation to industry.
The regulations come as a result of SB 4, which was introduced by Democratic state senator from southern California Fran Pavley, and that became law in September. SB 4 is the state’s first attempt at statewide regulation of the controversial extraction technique, in which water and other chemicals are injected underground at high pressure to shatter hydrocarbon-bearing formations to release oil or gas. According to the California Division of Oil, Gas and Geothermal Resources, the technique has been used in the state for decades. Yet, until now, fracking has received hardly a glance from state regulators. A 2012 report from the Environmental Working Group found that by the mid-1990s more than 600 wells had been fracked in a single California oil field – in spite of the insistence of state regulators that the process was “occasionally used for a brief period.”
The draft regulations proposed under SB 4 are the culmination of a long and contentious process and come amid efforts in other Western states to more carefully regulate or ban fracking. As HCN reported earlier this week, several cities along Colorado’s Front Range have banned the practice, and Wyoming recently introduced rules to monitor groundwater impacts of oil and gas development.
The California rules would require neighborhood notification, a groundwater monitoring plan that would “prioritize monitoring of groundwater that is or has the potential to be a source of drinking water,” and public disclosure of the cocktails of chemicals used in fracking operations. The new law also stipulates that oil companies must report any earthquakes caused during drilling and disclose the amount of water to be used in the stimulation of each new well, where that water will come from and how it will be disposed of. (Currently, the state does not require oil companies to disclose this information.)
Many environmental groups have complained that last-minute alterations to the rules seek to exempt old wells from the new requirements, and future gas and oil development from the California Environmental Quality Act (CEQA). "The oil industry wants a free pass from environmental review for any fracking or acid jobs at existing wells, seeking preferential treatment for fracking over how any other large industrial projects are reviewed in the state," Damon Nagami of the Natural Resources Defense Council’s Southern California Ecosystems Project said in a press release. Environmentalists also say that many of the coveted areas for exploration are found amid the Central Valley’s farmlands, atop already ailing aquifers. Critics fear that fracking could lead to further contamination of groundwater as well as some of the state’s most productive farmland.
Last week, a group of scientists – including noted climatologists Michael Mann, James Hansen and Ken Caldeira – sent a letter to Gov. Jerry Brown, urging a moratorium on development until studies determine whether the state’s shale oil can be exploited in “a manner that protects public health and safety, the conservation of the State’s natural resources, and helps to achieve the climate goals set out by AB 32," California’s greenhouse gas reductions law that requires the state to cut carbon emissions 80 percent by 2050.
Energy company reps, too, are pushing back against new requirements of the bill, characterizing it as a move toward stronger, and sometimes overly aggressive, oversight. “While SB 4’s requirements went significantly farther than the petroleum industry felt was necessary, we now have an environmental platform on which California can look toward the opportunity to responsibly develop the enormous potential energy resource contained in the Monterey Shale formation,” Catherine Reheis Boyd, president of the Western States Petroleum Association, said in a statement.
A number of other California bills seeking to more rigorously regulate, or ban, hydraulic fracturing were defeated over the last year. One bill would have placed a 9.5 percent severance tax on oil and gas production. (California is one of the only states in the country without a severance tax on oil.) Another bill, authored by state senator Hannah-Beth Jackson, D-Santa Barbara, would have regulated produced water as a hazardous material.
While much of the public attention over hydraulic fracturing is currently centered on natural gas production in places such as the Marcellus formation, which spans from Alabama to New York, and the Barnett in Texas, companies are also seeking large deposits of oil trapped in deep shale deposits in California, which is likely to see even more fracking in coming years. In 2011, the federal government’s Energy Information Administration estimated that 15 billion barrels of oil are potentially recoverable in the ground here. To put that figure in perspective, consider that the Bakken shale in Montana, North Dakota and Canada, the site of the country’s fiercest oil rush right now, is believed to contain a mere 4 billion barrels of recoverable oil.
Though the bill and proposed regulations zero in on the practice of hydraulic fracturing, it’s unclear how they will apply to ongoing “enhanced oil recovery” operations throughout Kern County , Calif., the state’s largest oil producing region. One EOR technique known as steamflooding, a precursor of fracking, uses huge volumes of water converted to steam, injected into the ground to release heavy oil. This process, used since the 1960s, generates billions of gallons of wastewater each year. Much of this waste has been dumped into unlined ponds strewn across Kern County, some of which has already leaked into groundwater. And yet,the new regs explicitly exempt steam flooding from the bill’s definition of “well stimulation.”
A public comment period for the SB 4 rules is set for this spring, and final regulations are expected to be implemented by January 2015. In the meantime, the division of oil and gas says interim regulations will come into effect in just a few weeks. Those rules aren’t available yet, according to a Department of Conservation spokesperson, but will be a “distillation ” of the permanent rules and released by early 2014.
Jeremy Miller is a contributing editor to High Country News. Photographs by Jeremy Miller.
Correction: An earlier version of this story indicated that SB 4 had not yet passed, but it in fact became law in September. The story has been updated.