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Tuesday, Dec 18 2012 07:35 PM

Oil regulators release draft fracking rules

BY JOHN COX Californian staff writer jcox@bakersfield.com

Draft "fracking" regulations released Tuesday would force California oil and gas producers to do additional well testing and disclose what is now private information but not apply for permission to perform the controversial practice also known as hydraulic fracturing.

The state Department of Conservation's long-awaited proposal drew tentative support from an industry resigned to the likelihood of new regulation. Meanwhile, environmental groups and a key lawmaker voiced concerns that the draft rules don't do enough to protect California's air and groundwater.

"While these regulations are a step in the right direction, we see them as the first step," said state Sen. Fran Pavley, D-Agoura Hills, whose bill to require oil producers to notify neighbors of upcoming frack jobs failed in the Legislature last session.

Fracking injects sand, large amounts of water and small concentrations of sometimes toxic chemicals underground at high pressure to break up rock formations and release oil and natural gas. The process is credited with opening access to vast petroleum reserves, though critics say it threatens groundwater and air quality and may induce seismic activity.

Tuesday's release of draft rules advances a public process that began last summer with a series of state-sponsored fracking workshops. A formal rulemaking process is scheduled to begin in February, with final regulations expected to emerge late next year.

The draft rules are, to a large degree, a response to criticism from state lawmakers and environmentalists that the state Division of Oil, Gas and Geothermal Resources, part of the Department of Conservation, has looked the other way as the oil industry ramps up fracking in Kern County and other areas.

As DOGGR chief Tim Kustic has hinted for months at industry meetings, the division's approach centers on what it calls "zonal isolation" -- the need to contain fracking fluids to the appropriate geologic zones so that dangerous chemicals do not "migrate" to reach underground drinking water.

The draft rules call for extensive pre-fracking pressure tests of wells' cement bonds as well as a thorough examination of seismic faults and oil wells across an area twice as large as any underground fracture is likely to extend.

Kustic said in a news conference Tuesday that DOGGR reviewed other states' fracking rules, and that as far as he could tell, the pre-frack testing he proposed would be unique in the country.

The proposed regulations also spell out the need for monitoring well pressure during fracking and then continuing to watch pressure gauge readings for five years afterward to make sure the technique has not damaged the well.

Industry representatives said cost remains a primary concern with any new regulations, even as they declined to estimate how much oil producers' costs would rise under Tuesday's proposal.

Les Clark, executive vice president of Bakersfield's Independent Oil Producers Agency, said well testing is "expensive to do," but that he expects upcoming discussions with state regulators to result in a set of "common sense" rules.

Public disclosure

Probably the most controversial measures in Tuesday's proposal deals with public disclosure requirements.

Oil companies planning to frack a well in the state would need to give DOGGR various specifics, including the time, location and depth of the frack, at least 10 days beforehand. The division would then have to post that information publicly within seven days before the frack takes place.

The oil and gas industry has previously opposed such prenotification, saying it would needlessly worry neighbors who have no power to appeal a company's decision to frack.

While details remain to be worked out, "we don't have a problem" with the proposal's prenotification requirements, said Rock Zierman, chief executive of the California Independent Petroleum Association.

In a written statement, Sen. Pavley criticized the prenotification proposal as inadequate. She did not elaborate but did add that "public disclosure and public input are key to this process."

Still more contentious was the idea of exempting "trade secrets" from the list of frack fluid ingredients that the draft rules say should be published online at fracfocus.org or some other public website.

DOGGR proposes to allow oil companies to identify certain ingredients by only the chemical family or a similarly vague description. But environmentalists said the industry should have to state exactly what it wants to inject underground, no exceptions.

"There should be some way to disclose what those (chemicals) are," said George Torgun, staff attorney at Earthjustice, a San Francisco nonprofit.

Similar questions about how to deal with trade secrets tripped up a bill proposed over the last legislative session by Assemblyman Bob Wieckowski, D-Fremont. He could not be reached for comment Tuesday.

DOGGR's draft rules do not address other controversial aspects of fracking, such as impacts on air quality and related seismic activity.

Materials published by the agency Tuesday say various air quality control districts are considering regulations to address emissions associated with fracking. They also say DOGGR is consulting with staff from the state Water Resources Control Board to determine whether new water quality monitoring might be required because of fracking.

DOGGR's also stated that fracking-induced seismic activity is not a matter for regulation by the state because studies have linked such activity with disposal of fracking fluids, not fracking itself. The agency pointed out that such disposal is regulated by the federal government.

Public workshops to refine Tuesday's draft regulations are still to be scheduled, though public comments can be emailed at any time to comments@conservation.ca.gov.

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