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Shale & Fracking Tracker

News & Flashes

  • 20
  • November
  • 2019

California Announces “Independent Reviews” for New Hydraulic Fracturing Permits, Audit of Current Permit Approval Process

On November 19, 2019, the California Department of Conservation’s Division of Oil, Gas and Geothermal Resources (“DOGGR”) announced that all new permits for well stimulation operations such as hydraulic fracturing must be reviewed by third-party, independent scientists “to ensure the state’s technical standards for public health, safety and environmental protection are met prior to approval of each permit.”  These reviews will be conducted by experts at the Lawrence Livermore National Laboratory in Livermore, California.

The requirement for independent reviews is a temporary measure pending a broader overhaul of California’s well stimulation permitting regime, which arises out of recent legislation that revised the name and mission of DOGGR, which will be renamed the Geologic Energy Management Division, or “CalGEM,” effective January 1, 2020.  Similar to Colorado’s S.B. 19-181, California’s A.B. 1057, which was signed into law in October 2019, also specifically requires that CalGEM’s mission include “protecting public health and safety and environmental quality, including reduction and mitigation of greenhouse gas emissions associated with the development of hydrocarbon and geothermal resources in a manner that meets the energy needs of the state.”  DOGGR began a review of its process for approving well stimulation permits in July 2019, after it was reported that the issuance of such permits had doubled since Governor Newsome took office in January 2019.  More recently, DOGGR requested an independent audit of its permitting processes for well stimulation and underground injection control by the California Department of Finance’s Office of State Audits and Evaluations.

In addition to this ongoing review of well stimulation permitting procedures, DOGGR announced a new rulemaking effort aimed at strengthening protections for public health and safety near oil and gas extraction facilities.  The rulemaking process will begin in 2020 with “a series of pre-rulemaking workshops with interested parties to seek input on the best ways to protect human health through new rules.”  A variety of environmental and public health authorities are expected to consult on the forthcoming rulemaking, including the California Department of Public Health and the California Environmental Protection Agency.  Finally, DOGGR also announced a moratorium on new extraction wells that use high-pressure cyclic steaming to break apart underground geological formations to extract oil, a process that has been linked to recent oil leaks in Kern County, California.

It remains to be seen how the independent panel will implement its new authority to evaluate well stimulation permits pending California’s continuing review of its permitting processes.  To the extent that this review recommends regulatory changes to California’s permitting regime, such changes would require a future notice and comment rulemaking.  In the meantime, operators should prepare to engage in the forthcoming rulemaking effort relating to protections for public health and safety near oil and gas extraction facilities.  As Colorado’s failed Initiative 97/Proposition 112 demonstrated in 2018, measures as simple as increased setback distances can have devastating effects on the percentage of surface lands available for production.

Read DOGGR’s announcement in full here.

  • 30
  • April
  • 2019

California Legislature Looks to Colorado in Considering Increased Setbacks

On April 22, 2019, the California Assembly’s Natural Resources Committee passed Assembly Bill 345 (“AB 345”), which, similar to Colorado’s failed Proposition 112 ballot initiative, would require that all new oil and gas development and rework operations on non-federal land be located at least 2,500 feet from any residences, schools, childcare facilities, playgrounds, hospitals, and health clinics. These requirements would take effect beginning on January 1, 2020. In addition, the bill authorizes cities and counties to impose setback requirements even greater than the 2,500-foot base requirement.

The bill includes a variance mechanism whereby operators could obtain a reduction to the “maximum achievable” setback distance where necessary to access legal subsurface rights. Applications for a variance must include “competent, substantial, and relevant evidence” demonstrating, among other things, that the proposed variance is “consistent with the intent” of AB 345 and “protect[s] public health and safety.” Such variance requests would be subject to review by the state’s Oil and Gas Supervisor. However, an analysis prepared by the Assembly’s Natural Resources Committee observed that “it is unlikely the variance could ever be used” because, counter to the requirement that a variance be “consistent with” AB 345, the bill explicitly declares that “[p]roximity to oil and gas extraction, including the use of hydraulic fracturing, well acidization, and other nonconventional oil and gas extraction techniques, adversely impacts public health and safety.”

As was the case with Proposition 112 in Colorado, implementing the requirements of AB 345 could have a devastating impact on new oil and gas exploration and production activities in California, which currently ranks fourth among states in annual oil production. The Natural Resources Committee’s analysis states that even a lower 1,500-foot setback from only residential developments would have affected 65 permits issued in Los Angeles County alone in 2018. Even more troubling for California operators is the Committee’s observation that, as currently drafted, the “definition of new oil and gas development and rework operations may capture any permit necessary to keep existing wells producing.” The California Division of Oil, Gas, and Geothermal Resources issued 1,100 such permits last year, amounting to 15% of the total permits it issued. Similarly, the Committee found that AB 345’s definitions of “oil and gas development” and “rework operations” subject to the setback requirement could include routine repairs, the addition of new flowlines, or additional treatment of waste.

The bill will now move to the Committee on Appropriations for further consideration. Should the bill advance out of committee, it would move to the Assembly for further readings and a vote. To become law, the bill must be passed by the Assembly and Senate, and then approved by the Governor, who can either sign the bill into law, or allow it to become law without signature. Read the current text of AB 345 in full here.

Finally, AB 345 was not the only bill affecting the oil and gas industry to advance out of the Assembly’s Natural Resources Committee on April 22. The Committee also passed AB 1440, which would again borrow from Colorado by eliminating language encouraging the development of oil and gas resources from the statutory mandate of the California’s Oil and Gas Supervisor. Colorado, of course, recently enacted legislation that revised the mandate of the Colorado Oil and Gas Conservation Commission to focus primarily on the protection of public health and the environment, rather than “fostering” the development of oil and gas resources. Like AB 345, AB 1440 will now move to the Committee on Appropriations for further consideration. Read the current text of AB 1440 in full here.

  • 13
  • December
  • 2017

BLM Finalizes Postponement of Waste Prevention Rule

On December 8, 2017, the Bureau of Land Management (“BLM”) published a final rule (the “Postponement”) postponing certain requirements of the 2016 Waste Prevention Rule (“Waste Prevention Rule”) for one year. BLM’s Postponement reflects the completion of BLM’s latest effort to delay the requirements of the Waste Prevention Rule after a court in the Northern District of California vacated BLM’s previous attempt to postpone the effective dates of the rules through alternative procedures. 

BLM’s Waste Prevention Rule, initially promulgated in November 2016, covers a number of methane emissions sources associated with oil and gas production activities on federal lands, including natural gas emissions from venting or flaring, gas leaks from equipment and facilities located at the well site, and well drilling and completions. While the Waste Prevention Rule called for operators to submit “waste minimization” plans by January 2017, the Rule’s leak detection and recovery, emission reduction, and reporting requirements were scheduled to go into effect on January 17, 2018. BLM issued a proposed rule in October 2017 proposing to extend the Waste Prevention Rule’s January 2018 effective dates to January 2019. The proposed rule was open to public notice and comment for a 30-day period concluding November 6, 2017. The Postponement formally promulgates the October 2017 proposed rule, extending the Waste Prevention Rule’s original January 17, 2018 effective dates to January 17, 2019. 

The Postponement is currently in effect, but remains subject to judicial challenge in the future. Any such future judicial challenge could also raise a prospective stay of the Postponement, which could bring the original 2016 Waste Prevention Rule deadlines back into effect pending the court’s resolution of the judicial challenge to the Postponement. Meanwhile, a separate legal challenge to the validity of the 2016 Waste Prevention Rule brought by several industry groups and states remains pending in Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al, Case No. 16-cv-00280 in the U.S. District Court for the District of Wyoming. In that case, the Federal Respondents have filed a Motion to Dismiss, or, in the alternative, for a Stay of Proceedings in light of the Postponement.

  • 05
  • January
  • 2015

California Approves Final Hydraulic Fracturing Regulations

On December 30, 2014, California's Office of Administrative Law approved final regulations regarding hydraulic fracturing pursuant to Senate Bill 4. The regulations are comprehensive, and will be administered by the California Department of Conservation's Division of Oil, Gas and Geothermal Resources ("DOGGR"). The rules address the information operators must disclose to regulators and the public and regulate the storage and handling of well stimulation fluids and wastes. Surface property owners within 1,500 feet of the wellhead or 500 feet of the subsurface horizontal path of the well may request baseline and post-stimulation testing of well and surface waters on their property that are fit for drinking or irrigation uses. The regulations also require operators to monitor seismic activity within an area five times the size of the stimulation area. Upon discovery of an earthquake of magnitude 2.7 or greater, the operator must notify DOGGR and cease hydraulic fracturing activity until DOGGR is satisfied that the fracturing activity does not create an increased risk of seismic activity. The final regulations, which are similar to interim regulations under which industry has operated since January 1, 2014, will become effective on July 1, 2015. Read the final regulations here.

  • 16
  • June
  • 2014

California Revises Proposed Well Stimulation Regulations

On June 13, the California Department of Conservation's Division of Oil, Gas and Geothermal Resources ("DOGGR") revised its proposed regulations relating to the use of well stimulation, including hydraulic fracturing, in oil and gas production. The proposed regulations, which would replace the interim regulations that went into effect on January 1, are part of DOGGR's continuing efforts to implement Senate Bill 4, California's 2013 legislation requiring permits for hydraulic fracturing and other well stimulation techniques, and would go into effect on January 1, 2015. The revised regulations address the permitting of well stimulation activities as well as associated well integrity, public disclosure, testing/monitoring, and waste handling requirements. Notably, the revised regulations would allow well stimulation permit applicants to request a "single-project authorization" from DOGGR, which would authorize multiple well stimulation treatments under a single permit. DOGGR's revisions would also require operators to monitor seismic activity in the vicinity of their hydraulic fracturing operations. The public may comment on the revised regulations through July 28. Read DOGGR's revised proposed regulations in full here.

  • 11
  • January
  • 2014

California Offshore Drillers Must Disclose Hydraulic Fracturing Chemicals

EPA issued a new General NPDES permit for offshore oil and gas operations off the coast of Southern California on Thursday, January 9, 2014, that requires drillers to maintain an inventory of chemicals used for well treatment, completion, and workover fluids (including hydraulic fracturing fluids) and report the chemical formulation for any discharge of such fluids in their quarterly discharge monitoring reports. To see EPA's published notice of availability of the final NPDES general permit, click here.

  • 18
  • November
  • 2013

California Releases Proposed Regulations on Well Stimulation

The Department of Conservation released proposed regulations on Friday, Nov. 15th implementing California's SB 4 legislation, signed Sept. 20th, requiring permits for all types of well stimulation, including hydraulic fracturing. The regulations outline requirements for the new well stimulation permits, set well integrity and casing requirements, and disclosure and water well testing requirements. The rulemaking notice and policy statement is available here. The comment period closes at 5pm on January 14, 2014. The text of the proposed rule is available here.

  • 19
  • December
  • 2012

California Releases "Discussion Draft" of New Hydraulic Fracturing Rules

On December 18, 2012, the California Department of Oil, Gas & Geothermal Resources (DOGGR) released a "discussion draft" of regulations for hydraulic fracturing in the State. Requirements of DOGGR's discussion draft include: advanced notice prior to drilling; monitoring both during and after hydraulic fracturing operations; and fluid disclosure requirements. The discussion draft is not a formally proposed rule and is intended only to guide discussions amongst stakeholders prior to DOGGR officially starting the rulemaking process sometime in early 2013. Read the discussion draft here.

  • 19
  • October
  • 2012

Suit Filed in California to Prevent Permitting of Oil and Gas Operations

October 16th Earthjustice filed a lawsuit in Alameda County Superior against the California Department of Conservation, Division of Oil, Gas, and Geothermal Resources (DOGGR) alleging failure to consider or evaluate the risks of fracking, as required by the California Environmental Quality Act (CEQA). The suit was filed on behalf of the Center for Biological Diversity, Earthworks, Environmental Working Group, and Sierra Club. These groups are asking the court to declare that the DOGGR has violated the CEQA and asks that the DOGGR be enjoined from approving any new oil and gas well permits until they have completed an Environmental Impact Report (EIR) on the environmental and public health impacts of fracking. Read the complaint here.

  • 21
  • June
  • 2012

Pacific Institute Study Examines Hydraulic Fracturing's Impacts on Water Resources

The Pacific Institute, an independent non-profit research and policy organization based in California, released a new study in June examining the impacts of hydraulic fracturing and unconventional natural gas extraction on water resources. Through interviews with stakeholders and an assessment of existing research, the Pacific Institute identifies the range of concerns and issues associated with hydraulic fracturing and areas where more information is needed. The study, titled "Hydraulic Fracturing and Water Resources: Separating the Frack from the Fiction," is available here.

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