Oil

Friday, Nov 15 2013 08:16 AM

Industry backs, environmentalists question draft fracking rules

BY JOHN COX Californian staff writer jcox@bakersfield.com

State regulators released draft rules Friday that, for the first time, would require oil companies to apply for permission to perform hydraulic fracturing, or "fracking," the controversial but highly effective technique increasingly important to Kern County petroleum producers.

The proposed regulations call for a variety of measures ranging from groundwater monitoring and oil well pressure-testing, to public disclosure of chemicals used in fracking -- with exceptions for certain trade secrets -- and notifying neighbors a month before fracking begins.

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DRILLING DOWN

Friday's release of draft rules on fracking begins a 60-day public comment period, which would be followed sometime next year by a comment period of at least 45 days.

Comments can be sent by email to DOGGRRegulations@conservation.ca.gov, by fax to 916-324-0948, or by mail to the Department of Conservation Office of Governmental and Environmental Relations, 801 K St. MS 24-02, 95814, ATTN: Well Stimulation Regulations.

Text of the draft rules is available online at www.conservation.ca.gov/Index/Pages/Index.aspx.

PUBLIC MEETINGS

The state has scheduled five public hearings to gather comment on the proposed regulations:

* Sacramento: 3 to 7 p.m. Jan. 6 in the Sierra Room of the California Environmental Protection Agency Building, 10th and I streets.

* Long Beach: 3 to 7 p.m. Jan. 6 in the Cal State Long Beach Auditorium, 1212 Bellflower Blvd.

* Bakersfield: 3 to 7 p.m. Jan. 8 in the Kern County Administrative Center, First Floor Board Chambers, 1115 Truxtun Ave.

* Salinas: 3 to 7 p.m. Jan. 8 in the National Steinbeck Center, One Main St.

* Santa Maria: 3 to 7 p.m. Jan. 13 in the Santa Barbara County Supervisors Hearing Room, 511 E. Lakeside Parkway.

As it stands, oil companies in California can frack at will without having to provide almost any public information on their actions, though the state does hold them to construction standards to make sure oil wells do not rupture under pressure.

Industry representatives called the new draft workable, while environmentalists pressed for a fracking moratorium and stricter government oversight.

None of the draft rules came as a surprise. They had either been laid out in a new state law or discussed in public meetings around the state over the past year.

Friday's 13-page draft by the Department of Conservation's Division of Oil, Gas and Geothermal Resources kicks off a year-long rulemaking process that will involve public comment and informational workshops. It is to be accompanied by a formal environmental review and a wide-ranging study on fracking and other well stimulation procedures, to be conducted by a yet-unnamed panel of scientists.

Department director Mark Nechodom said the proposed rules balance environmental protection with economic opportunity.

"We believe that once these proposed regulations go into effect at the start of 2015, we will have in place the strongest environmental and public health protections of any oil- and gas-producing state in the nation while also ensuring that a key element of California's economy can maintain its productivity," he said in a news release.

Fracking has been used in Kern County for decades. It injects sand, large amounts of water and small concentrations of sometimes-toxic chemicals to break open oil-bearing rock formations that are otherwise difficult to reach.

While environmental groups see fracking as a threat to groundwater, air quality and wildlife, the oil industry says the technique is a safe procedure that could unlock the vast Monterey Shale oil formation underlying much of the southern Central Valley.

The proposed rules were required by Senate Bill 4, authored by state Sen. Fran Pavley, D-Agoura Hills, and signed into law Sept. 20 by Gov. Jerry Brown. But for more than a year, DOGGR, as the oil division is known, has been working on a version of the rules in consultation with industry groups, other state agencies and environmentalists.

A guiding principle behind the draft regulations is the idea that proper construction of oil wells will ensure that fluids associated with fracking do not "migrate" outside the intended injection zone and accidentally make their way into underground sources of drinking and irrigation water.

NEW DEMANDS ON INDUSTRY

The draft rules would force oilfield operators to pressure-test petroleum wells ahead of time and perform analyses of nearby wells and earthquake faults to make sure the underground cracks created by fracking do not open pathways that could allow toxins to spread in unexpected ways.

All of this would add significant delays, new paperwork demands and extra costs to fracking operations.

Catherine Reheis-Boyd, president of Western States Petroleum Association, said in a written statement that the trade group looks forward to working with the state and others on how to put the new requirements into effect.

"These regulations are extensive but strike the right balance that will result in an environmental platform which will ensure that the potential energy resources contained in the Monterey Shale formation can be responsibly developed," she wrote.

Added Rock Zierman, president and CEO of the oil trade group California Independent Petroleum Association: "The new regulations certainly are a lot to comply with but DOGGR has given us a clear path forward. We are prepared to comply."

ENVIRONMENTALIST DOUBTS

Environmental groups, however, found fault with the proposed rules, in part because they would allow industry to continue producing a resource that many believe contributes to global warming.

Organizations including Sierra Club California said Friday they will continue to push for a moratorium on fracking until its environmental and public health impacts are better understood.

Some others, such as the anti-oil Center for Biological Diversity, said the proposed rules need to be expanded to address methane releases associated with petroleum production. The center also asked for a means for the public to appeal plans for fracking near their homes, which the draft does not provide.

"These are extremely industry-friendly regulations," said Kassie Siegel, senior counsel and director of the center's Climate Law Institute.

Even so, there was a sense that the draft is a good first step to begin regulating a longstanding practice that has not received the scrutiny it deserves in California.

"In that way, (the draft rules) are welcomed," said Bill Allayaud, director of government affairs for the Washington-based nonprofit Environmental Working Group.

Besides fracking, the proposed regulations, environmental review and scientific study would also cover acid stimulation. That procedure pumps fluids such as hydrochloric acid, often at high pressure, to dissolve underground formations and open channels for oil to flow to well bores.

Not covered by the draft are certain techniques that are related to fracking but distinct from it, like underground disposal of fracking fluids and cyclic steaming, also known as "steam fracking." DOGGR has said it will come up with new rules on both processes within the next few years.

PRACTICES NEW AND OLD

Some of the proposed rules are already widely practiced, such as geological analyses and well cementing to ensure underground injections go where intended. But many other technical requirements would be new, such as well pressure monitoring during and after stimulation, as well as pre- and post-frack groundwater testing.

The required informational disclosures would also represent a significant shift. Oil companies would have to file well stimulation plans at least 30 days prior to fracking, then file a final notification to DOGGR three days before the operation so that regulators may witness the event.

A wealth of new information would be made available on a new website DOGGR is developing. It would include the well operator's name and contact information, the location and depth of the well, and how much water -- recycled versus fresh -- as well as where that water comes from and what will be done with it afterward.

Interim fracking rules expected to be announced next month would cover the period between the start of next year and the deadline for implementation of the proposed rules, Jan. 1, 2015. State regulators said the temporary rules would likely be similar to those disclosed Friday.

Nechodom, the department director, said he expects to see "substantial changes" to the draft rules between now and October, when they would have to be finalized prior to a bureaucratic review.

LOCAL COMPLICATIONS

The proposed rules may have to be incorporated into an ongoing, local review of all oil activity in Kern County.

That project, ordered by the Board of Supervisors early this year, would draw up mitigation measures to lessen the environmental impact of various oil activities in Kern. Its goal is to eliminate the possibility that individual oil projects could face legal challenges claiming that they were not properly reviewed under the California Environmental Quality Act.

The county official in charge of the project, Planning Director Lorelei Oviatt, has said she and her staff are monitoring DOGGR's rulemaking process and will make changes if necessary.

"It complicates the (county's) project, but it doesn't negate" the environmental review at the heart of Kern's effort, she said in September.

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