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Tuesday, Jan 22 2013 06:38 PM

Supervisors push for near, far-term resolution of oil-ag conflict despite petroleum industry concerns

BY JOHN COX Californian staff writer jcox@bakersfield.com

County supervisors overrode objections by the petroleum industry Tuesday and ordered staff to begin crafting an interim public process for resolving land-use conflicts between oil producers and local growers.

With the same unanimous vote, the Board of Supervisors also launched a review that could allow the county to take over the state's lead role in permitting oil projects in California's most productive petroleum region.

The board's action sets in motion short- and long-term proposals for resolving what has become a highly visible dispute between the two main drivers of the local economy.

While the long-term plan enjoyed broad support -- including that of the state's senior oil regulator, who made the trip from Sacramento to speak to the board Tuesday -- a top oil industry representative asked the board to delay work on the short-term proposal so the industry could continue negotiating with growers.

"Our industry remains concerned about certain aspects of the proposal," said Western States Petroleum Association President Cathy Reheis-Boyd. As an example, she said the proposed hearings should not apply to conflicts over projects in established oil fields.

The board rejected her request, saying all sides' interests will be taken into account in a proposal expected to return to the board in March or April.

Speaking to an audience that included representatives of the county's biggest oil producers, Supervisor David Couch said he hesitated to initiate any form of government intervention.

"We may have gotten to a point where that is unfortunately necessary," he said.

In a sense, the supervisors had little choice but to proceed with work on an interim proposal. In December, board members promised ag community representatives that they would take specific action to resolve the conflict at Tuesday's meeting.

Ag community spokesman Larry Moxley lauded the board's decision to move forward with the short-term proposal.

"That forces us all to stay at the table cooperatively," he said after the vote.

According to the staff report by county Planning Director Lorelei Oviatt, the short-term proposal would require mineral rights owners such as oil and gas producers to work out land use details with surface property owners, primarily growers. If their talks reach an impasse -- and if it's unrelated to the issues of financial compensation or environmental impacts -- then either party could appeal to the Board of Supervisors for a final ruling.

Souring relationship

Relations between Kern's two biggest industries turned frosty in about 2010 when oil producers led by Los Angeles-based Occidental Petroleum Corp. began drilling in orchards and agricultural fields near Shafter. Growers complained that Oxy and other mineral rights owners were setting up drilling operations without considering the impact on the farmers.

Historically, California law has left mineral rights owners and surface property owners to their own devices, including lawsuits, to settle such conflicts. The county has generally avoided involvement.

In November, a growers group named the Committee to Protect Farmland and Clean Water asked the Board of Supervisors to intervene, claiming oil companies were not only impeding their farming activities but also threatening their groundwater with hydraulic fracturing, or "fracking," and underground injections of waste materials.

The committee's claims have taken on greater importance because of a series of lawsuits filed last year by California environmentalists and individual growers. They accuse state regulators of performing inadequate environmental reviews that favor oil producers over farmers. Related suits seek a statewide ban on fracking, the highly effective but potentially polluting oil field practice.

The state's senior oil regulator, Mark Nechodom, director of the state Department of Conservation, said in an interview Tuesday that he supports a review of whether it is time for the county to take on primary responsibility for permitting local oil projects. But, he added, "we have not prejudged this in any way."

"We want oil and ag to sit down and work its way through what makes sense."

Kern's oil industry has endorsed the concept of giving the county greater responsibility for approving local drilling projects. The industry's stated priority is regulatory certainty: a clear path to project approval without additional red tape.

Long-term proposal

The long-term solution proposed in Oviatt's staff report -- a strictly administrative process for issuing oil field permits -- would rule out concerns about fracking and underground injections as a basis for stopping drilling projects. But first there would need to be an exhaustive county review of the state's oil well construction standards and environmental mitigation measures.

If the process goes as Oviatt has proposed, there will be no public hearings on local oil projects and no need for the county to issue conditional use permits.

All of this would take time and money, and as of Monday it was unclear who would pay the several million dollars it would cost to conduct the year-and-a-half environmental review needed before the county could take over the state's oil permitting authority.

On Tuesday the answer emerged: The cost would be split among California's top three oil industry associations, the Western States Petroleum Association, the California Independent Petroleum Association and the Independent Oil Producers Agency.

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