Business

Saturday, Jul 28 2012 10:00 PM

Upcoming fracking rules could amount to status quo -- with new disclosure

BY JOHN COX Californian staff writer jcox@bakersfield.com

The near future of oil field fracking in Kern County is shaping up to look a lot like it has in the past -- with one notable exception: Outsiders will probably get a much clearer view of what's going on.

This scenario, based on comments made last week by a senior state regulator working on new rules and discussions surrounding a bill pending in Sacramento, suggests local oil companies will get to continue fracking for oil much as they have for decades.

The key difference is oil companies may soon be forced to share where and when they employ the controversial technique also known as hydraulic fracturing, as well as how much water is consumed in the process. Some say the release and analysis of that information could lead to additional regulation down the line.

Supporters say this dual approach -- status quo in the oil fields together with a new public window into previously obscure activities -- would strike a balance between the industry's need for a straightforward review process and environmentalists' push for greater disclosure and an end to what they see as hands-off regulation by the state, if not an outright ban of the practice.

All of this has important economic implications in the capital of West Coast oil production. Fracking is fairly routine here and, many believe, due for a significant increase as the industry prepares to tap the Monterey Shale, a huge, previously undiscovered reservoir running through much of the southern Central Valley.

Fracking injects sand, large amounts of water and small concentrations of sometimes toxic chemicals deep underground to break up rock formations so that oil and gas deposits can be reached more easily. Despite worries that it has the potential to contaminate ground water and cause seismic activity, the technology has unlocked vast, previously unreachable natural gas deposits in the East Coast, the Midwest and the South.

The situation is somewhat unique in California, where fracking is used mainly to produce oil. A leading trade group says the technique was used at least 628 times in the state last year, and that no ground water contamination has occurred.

Environmentalists and state lawmakers have recently pressured state oil regulators to come up with rules specific to fracking. Currently, rules governing fracking in California mainly deal with general well construction standards.

New rules, same approach?

For now, officials with the state Division of Oil, Gas and Geothermal Resources appear content to codify but not substantially alter existing practices they say already protect underground sources of drinking water and oil deposits.

The idea is that DOGGR will continue to focus on what it calls "zonal isolation." This approach, which the agency applies not only to fracking regulation but also disposal of wastewater and other oil field substances, centers on using cement and heavy mud at strategic points during well construction to keep petroleum from leaking out and contaminating ground water.

These rules aren't limited to well construction; they also touch on well testing and how far apart wells must be drilled to reduce chances that fracking-related ruptures become conduits for petroleum to "migrate" into a neighboring well.

At a daylong fracking symposium Tuesday in Long Beach, DOGGR's chief deputy, Rob Habel, told a group of mostly hydrogeologists and other water professionals that ensuring zonal isolation is more important to regulators than knowing what chemicals are contained in fracking fluids injected underground.

"Our main intent is going to be making sure that (fracking fluids are) confined to the zones," he said.

Habel added that the issue of how to regulate fracking has been a controversial topic in a recent series of listening sessions intended to gather comment for new rules coming as soon as next year. He said the industry has criticized potential new reviews as "draconian" even as environmentalists call them insufficient.

"We're going to have to do a balancing act to meet everyone's comments and concerns," he said.

DOGGR's former top regulator in Bakersfield, Randy Adams, asserted that any new rules focused on zonal isolation would amount to a continuation of existing policy.

A more significant development, Adams said, will likely be greater disclosure of fracking details.

"What will change is the tracking mechanism (to show) what's being fracked and where," he said.

Regulation via disclosure

While Adams and others suspect DOGGR will require such data in its new rules (the agency recently asked oil field operators to volunteer that information), one state lawmaker is working to mandate fracking disclosure on the legislative side.

AB 591, a bill proposed by Assemblyman Bob Wieckowski, D-Fremont, would force oil companies to divulge fracking details including where and when they frack and how much water is used in the process.

Speaking at Tuesday's symposium, the assemblyman said the bill reflects his efforts to reach out and balance environmentalists' skepticism of fracking with the industry's needs.

"I don't want to shut down all oil production in the state of California. The people in Kern County would have a heart attack," he told a lunchtime audience of about 100.

He added that the bill would represent a "baby step" and that further regulation of fracking could come later.

Industry spokesman Rock Zierman, CEO of the California Independent Petroleum Association, said he supports the kind of disclosure contained in Wieckowski's bill, and he expressed confidence that the legislation would soon become law.

Giving the public more information about fracking helps prove the industry's contention that the practice is not dangerous, Zierman said.

He emphasized that fracking has been integral to Kern County's economic well-being.

"Before we go and hurt that in any way, we'd better be sure that there is a problem" with fracking, he said. "And that hasn't been demonstrated."

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