Serious questions remain on state's fracking-regulation law

This is a large amount of material containing conflicting information and opinion regarding California’s new law to regulate hydraulic fracturing. We’ve organized it to first present the reasons that environmental groups originally supporting the legislation in the end backed away from it in response to last minute oil-company amendments reportedly solicited by Gov. Brown  Following these two articles from EnergyWire are several reports of the news of passage of the law from mainstream media sources done in typical sports-page style, emphasizing who won and who lost including a set of vague abstractions to describe the game itself that have been agreed upon by government and the oil companies.
Oil-company lobbyists and lawyers have opposed the will of the people to regulate fracking  by means of such tendentious amendments and trickery that to describe them accurately is to expose them, which would be viewed as “taking sides” and “not being objective.” Unfortunately for the public that hasn’t dug a little deeper into the issue, important questions remain in darkness.
Is it worth it for the common good of California to let oil corporations reap great profits from this dangerous technology in view of the public costs in environmental and health damage?
Is the state Department of Conservation either competent or inclined to effectively enforce regulations on oil companies? --blj
Hydraulic Fracturing
Calif. governor's signature on fracking bill comes with a twist
Anne C. Mulkern, E&E reporter
California Gov. Jerry Brown (D) has signed into law a closely watched measure mandating oversight of hydraulic fracturing and other emerging oil drilling techniques.
Brown quietly announced through an email message late Friday that he had signed S.B. 4, a bill sponsored by Sen. Fran Pavley (D) that establishes regulatory standards governing unconventional drilling. Through the method of energy extraction widely known as fracking, companies blast chemical-laced water some 8,000 feet underground at high pressure to break apart rock formations and release oil or natural gas.
The newly signed law requires some disclosure of chemicals used in the process and notification of residents before work starts. Groundwater testing and other oversight measures are also put in place for fracking and other well stimulation techniques, including one called acidization.
"This is a first step toward greater transparency, accountability and protection of the public and the environment," Pavley said in a statement. "Now we need immediate, robust enforcement and widespread public involvement to ensure the law is upheld to its fullest."
Until now, the state had no rules governing fracking. Pavley and supporters of new oil and gas rules argue that they are important because of the size of California's Monterey Shale formation, a swath of land stretching from the middle of the state south to Los Angeles County that geologists believe holds 15.5 billion barrels of recoverable petroleum.
Oil industry trade group Western States Petroleum Association, or WSPA, said that with S.B. 4 becoming law, "California has the toughest regulations of hydraulic fracturing and other energy production technologies in the country."
But the bill signing included an unexpected political wrinkle that left many questioning its repercussions.
Brown noted alongside his signature, "I am also directing the Department of Conservation when implementing the bill to develop an efficient permitting program for well stimulation activities that groups permits together based on factors such as known geologic conditions and environmental impacts, while providing for more particularized review in other situations where necessary."
The governor added that "the bill needs some clarifying amendments, and I will work with the author in making those changes next year."
S.B. 4 requires oil and gas companies using hydraulic fracturing and other techniques for stimulating oil and gas wells to get permits from the Department of Conservation's Division of Oil, Gas and Geothermal Resources (DOGGR).
Brown's office declined to elaborate on the governor's goal or the potential effects of grouping permits together.
Some environmental groups said they believed it could mean oil fields with several wells might be looked at as a group, while an individual well in an agricultural or urban area would be given more scrutiny.
"These different situations would pose different environmental impacts," said Bill Allayaud, California director of government affairs for the Environmental Working Group (EWG).
Another green group representative warned that shortcuts aren't permissible.
"The bottom line is that the permitting system must meet the minimum requirements of S.B. 4 and other applicable law," said Kassie Siegel, senior counsel at the Center for Biological Diversity. "If grouping permits turns into a shortcut that reduces either substantive protection or public process, we would strenuously object to that."
Siegel said Brown's powers are limited in terms of shaping S.B. 4. California law allows its governor to strike out portions of laws, known as a line-item veto.
"But I don't think he can change the law via a signing statement," Siegel said.
Oil industry pact?
A person familiar with the politics said the governor's signing statement appears to have been added as part of a deal with the oil industry in exchange for easing up on its efforts to prevent S.B. 4's passage.
WSPA would not comment on the signing statement. The group last week did not respond to questions about the reported pact with the governor, when EnergyWire first reported it had happened (EnergyWire, Sept. 9). The governor's office also did not respond to questions.
"While S.B. 4's requirements went significantly [further] than the petroleum industry felt was necessary," said WSPA Catherine Reheis-Boyd in a statement, "we now have an environmental platform on which California can look toward the opportunity to responsibly develop the enormous potential energy resource contained in the Monterey Shale formation."
Allayaud with EWG said Brown's statement on clarifying amendments could refer to a tussle that erupted over how S.B. 4 would interact with the California Environmental Quality Act, or CEQA.
Four green groups that had led the advocacy for the bill -- the Natural Resources Defense Council (NRDC), the Environmental Working Group, the California League of Conservation Voters and Clean Water Action -- abandoned their sponsorship just before a final vote because of late amendments they found unacceptable. Green groups say the language limits the reach of CEQA.
The late amendments arrived as oil lobbyists were offering language that would have struck the word "permit" in the bill and replaced it with the word "notice." Deleting "permit," legislative aides said, would have created a CEQA exemption, because the permit requirement is what triggers the law and its requirement for a state environmental impact report.
State law requires an environmental review addressing how the development would affect land, water, species and other factors and ways to mitigate the damage. The oil and gas industry contends that fracking operations up until now have not been subject to CEQA.
David Pettit, senior attorney at NRDC, said last week that one clause gives DOGGR authority to approve a fracking project if it believes its potential impacts have already been investigated by a statewide environmental review. In that case, the wording says that "no additional review or mitigation shall be required."
Pettit said that could mean some permits are issued for fracking with no public notice and no ability to appeal in court.
Greens also objected to what they see as a "grace period" before the law is implemented in January, during which oil companies can secure permits for fracking without going through CEQA.
DOGGR, meanwhile, has been working on fracking regulations. It released an informal discussion draft of rules earlier this year. Green groups and some residents criticized those as weak.
"While some of the requirements proposed in the informal draft regulations were incorporated into S.B. 4, the department will still need to adopt comprehensive regulations to implement the new law," DOGGR said in a statement. "These new regulations will include extensive protections for groundwater, which will be developed and implemented by the State Water Resources Control Board."
S.B. 4 sets a deadline of Jan. 1, 2015, for completion of the regulations.
Calif. frack bill nears final passage even as greens cancel support
Anne C. Mulkern, E&E reporter
California legislation that orders the first-ever state oversight of hydraulic fracturing neared final passage yesterday, even after nearly all environmental groups dropped their support.
The state's Assembly on a vote of 48-17 approved S.B. 4from Sen. Fran Pavley. It now heads back to the Senate for agreement on amendments. If ratified there, it goes to Gov. Jerry Brown (D), who has indicated he will sign it.
Pavley said the bill is needed because unlike at least 14 other states that produce petroleum, California doesn't regulate fracking or other well stimulation practices like acidization.
"There are still many unanswered questions about the use and impacts of fracking and acidizing," Pavley said. "It is in the interest of all Californians to monitor and regulate these practices. Ultimately, the oil industry, not the public, should be held accountable for the costs of these activities."
The bill sets up the rules under which the California Department of Conservation's Division of Oil, Gas and Geothermal Resources (DOGGR) will regulate fracking, where companies blast water laced with chemicals underground at high pressure to break apart rock formations and release oil or natural gas. S.B. 4 requires some disclosure on chemicals used and notification of residents before drilling starts and would create a system for testing groundwater.
The measure includes language that makes it apply to well stimulation and not just hydraulic fracturing. Industry has opposed that wording, but Pavley argues it is needed because some oil companies consider acid stimulation a possible key to opening the Monterey Shale. That swath of land, stretching from the middle of the state south to Los Angeles County, is believed to hold 15.5 billion barrels of recoverable petroleum.
Pavley aides called Assembly passage "a stunning victory for the public and the environment." But four major green groups that had led advocacy on the bill -- the Natural Resources Defense Council, the Environmental Working Group, the California League of Conservation Voters and Clean Water Action -- abandoned their sponsorship this week because of late amendments they found unacceptable.
"Until Friday, we strongly supported S.B. 4. Then these amendments came out of nowhere," said David Pettit, senior attorney at NRDC.
Some familiar with the politics said that Brown played a role in pushing the amendments that environmentalists oppose. Green groups say the language limits the reach of the California Environmental Quality Act protection law. Brown has called revising CEQA "the Lord's work."
"It was the governor's office that was insisting that those amendments go in in the first place," said Kathryn Phillips, director of Sierra Club California, which opposes S.B. 4. "As environmental groups and others were negotiating to get those amendments changed, it was with the governor's office that the negotiations were occurring. The governor's office was refusing to change them."
The governor's aides, Phillips added, "desperately don't want DOGGR to have to do environmental review of fracking sites, and so they worked really hard to make sure that new amendment in the bill wouldn't go away."
Brown spokesman Evan Westrup did not directly respond to questions about the governor's work on amendments but in an email said that "the administration has worked collaboratively with the Legislature to craft a bill that comprehensively addresses potential impacts from fracking, including water and air quality, seismic activity and other potential risks."
"S.B. 4 is an important step forward and the governor looks forward to signing it once it reaches his desk," Westrup added.
Brown previously has called fracking a "fabulous opportunity" (EnergyWire, May 15).
Split among green groups
Those familiar with the politics said that oil interests stopped lobbying against the measure after the latest amendments passed the Assembly on Friday. The oil industry trade group Western States Petroleum Association did not respond to a question about whether it had stopped asking lawmakers to vote against the bill.
Separately, WSPA President Catherine Reheis-Boyd said that the group opposes the measure.
"We have acknowledged the need to develop comprehensive and balanced regulations of hydraulic fracturing in California and had hoped S.B. 4 would provide those regulations," Reheis-Boyd said in a statement. "Unfortunately, S.B. 4 could create conditions that will make it difficult to continue to provide a reliable supply of domestic petroleum energy for California.
"Additionally, we are concerned the bill could make it difficult for California to reap the enormous benefits offered by development of the Monterey Shale formation in the San Joaquin Valley -- benefits that include thousands of new jobs, increased tax revenues and higher incomes for residents of one of the poorest regions in the nation," she added.
Green groups already had been divided on the bill. Sierra Club California and Physicians for Social Responsibility had opposed the measure, saying it lacked adequate protections. They objected to a provision that would block the public from knowing what chemicals companies are using if they claim the information is competitive.
In contrast, the Environmental Working Group, NRDC, Clean Water Action and the California League of Conservation Voters had earlier pushed for passage. They said that while the bill lacked some protections, it put other needed ones in place.
They withdrew support after the amendments were added Friday.
Green groups were troubled by a new clause that they believe could give oil companies a permanent exemption from CEQA. That law requires projects to produce an environmental impact report (EIR) addressing how the development will affect land, water, species and other factors, and as part of that to mitigate any adverse effects.
S.B. 4 requires DOGGR to conduct an EIR on how fracking and well stimulation activities will affect the entire state. The clause in question, Pettit said, gives a DOGGR supervisor the authority to approve a fracking project if he or she believes its potential impacts already have been investigated by that statewide review. The wording says that "no additional review or mitigation shall be required."
Pettit said that goes beyond the "negative declaration" that can be issued under CEQA, where an agency asserts that a project does not need to do an EIR because there aren't significant negative impacts. But when that happens, Pettit said, neighbors at least are notified and there is the chance to appeal in court.
'Free pass from CEQA'
Pettit said he is unaware of any other place in state law "that allows a government bureaucrat to waive CEQA with unfettered discretion." He added that "it's a free pass from CEQA for every fracking project in California forever."
An Assembly analysis disagreed with that interpretation. It said that "[t]his article does not relieve the division or any other agency from complying with any other provision of existing laws, regulations, and orders." Other state laws, like the California Global Warming Solutions Act and the Clean Water Act, still are in effect, it said.
Green groups also dislike language added to the bill Friday that puts in place a roughly 15-month grace period during which oil companies will be able to secure permits for fracking and well stimulation without going through CEQA.
"The amendments took a bill that didn't go far enough to protect Californians from fracking to one that actually gave away existing protections to oil companies," said Kassie Siegel, senior counsel at the Center for Biological Diversity. "Between now and 2015, Californians have less protections from fracking than current law provides."
Oil companies argue that hydraulic fracturing and other well stimulation processes have not been subject to CEQA. It is a point of contention that's part of a court case. The Center for Biological Diversity, EWG and Sierra Club filed a claim against DOGGR asserting that the state has failed to follow rules under CEQA that require the agency to track hydraulic fracturing.
Pavley, who authored the state's climate law, A.B. 32, in response to environmental group criticism said that S.B. 4 is a needed first step.
"I appreciate the support of the environmental community in advocating for the critical safeguards in S.B. 4," Pavley said. "I understand that many of their members desperately want a moratorium, and so do I. Since all the moratoria have died and companies are fracking and acidizing right now, I stand behind this bill as an insurance policy that does not prevent the governor or local communities from further restricting these activities.
"Without S.B. 4, there will be no public disclosure of chemicals, no groundwater monitoring and no regulation of acidizing, and the oil companies will continue to be able to frack without a permit or any public accountability whatsoever," she added. "The world won't be perfect if S.B. 4 passes, but it will be a whole lot better."
Merced Sun-Star
California fracking bill signed by Gov. Jerry Brown…Jeremy B. White and David Siders
After publicly endorsing the measure to ease its passage in the Legislature, Gov. Jerry Brown has signed a bill establishing a permitting system for hydraulic fracturing in California, the Governor’s Office announced Friday.
Brown took the unusual step of declaring his support for the bill with final legislative votes still pending, and on Friday he followed through by signing Senate Bill 4, by Sen. Fran Pavley, D-Agoura Hills.
In a signing message, Brown said he would seek additional “clarifying amendments” to the legislation and would direct the California Department of Conservation “to develop an efficient permitting program for well stimulation activities that groups permits together based on factors such as known geologic conditions and environmental impacts, while providing for more particularized review in other situations when necessary.”
Fracking, the shorthand name for hydraulic fracturing, extricates energy locked in underground formations with a pressurized blast of sand, chemicals and water.
In addition to mandating permits for new fracking wells, the bill strengthens groundwater monitoring while requiring energy companies to notify neighboring communities when they plan to frack and to release more information about the chemicals they use. Energy companies fought Pavley’s attempt to win more disclosure, saying the recipe for the particular mix of fracking chemicals they use qualify as trade secrets worthy of protection.
Several Democratic lawmakers authored bills this session to regulate fracking. But while the governor’s signature would appear to mark a major victory for environmental groups, prominent California environmental advocates – a list of groups that includes the Natural Resources Defense Council and the California League of Conservation Voters – abandoned the bill as it headed toward a final vote in mid-September.
Late amendments weakened the bill unacceptably, environmentalists said, diluting language intended to ensure new wells go through adequate environmental review. While oil industry representatives had said the regulation is unnecessarily burdensome, environmentalists said it would give oil companies nearly unfettered freedom to drill.
Brown has a tenuous relationship with environmentalists, which his signature on the fracking bill is only likely to strain further.

Calif. governor signs state's first fracking rules...LAURA OLSON, Associated Press
SACRAMENTO, Calif. (AP) — Gov. Jerry Brown signed legislation Friday that will establish California's first rules detailing how oil drillers use a technique known as fracking.
The bill from Sen. Fran Pavley, D-Agoura Hills, requires drillers to disclose the chemicals used and acquire permits before they use hydraulic fracturing. That process involves injecting water, sand and chemicals into deep rock formations to release oil or natural gas.
Drilling companies have been exploring whether fracking could help them access oil in California's Monterey Shale.
Pavley's bill passed the Legislature last week amid concerns from some conservation groups over last-minute changes affecting environmental reviews. Several groups urged Brown instead to temporarily halt fracking until officials can evaluate whether there are risks to public health.
Brown said in his signing message that SB4 "establishes strong environmental protections and transparency requirements," but that he will seek some additional changes next year to clarify the new requirements. His spokesman, Evan Westrup, declined to elaborate on what those amendments will attempt to address.
The governor added in his message that he will direct the state Department of Conservation to group drilling permits based on factors such as geologic conditions and environmental impacts when possible as a way to boost efficiency. He also said the department's permit-review system should allow for "more particularized review" of permit applications when necessary.
Other provisions of the legislation, which will take effect in January, will require oil companies to test groundwater and notify neighboring landowners before drilling. State officials will have to complete a study by January 2015 evaluating risks of fracking and other well-stimulation techniques, such as using acid to break apart oil-rich rocks.
All California oil wells have been subject to the same regulations, with no specific rules for those using hydraulic fracturing. The Department of Conservation also has been crafting fracking regulations that officials hope to finalize next year.
Tupper Hull, a spokesman for the Western States Petroleum Association, said Friday that the legislation will give the industry a framework for energy exploration in the Monterey Shale.
"There's no question that there is a great deal more reporting and permitting that will be required," Hull said. "This will add cost and time to bringing energy to market, and the industry will have to adapt to those regulations."
Brown also signed a bill from state Sen. Lois Wolk, D-Davis, which will increase the bonding amounts oil and gas drillers must post in case a well is abandoned or an operator is unable to pay for environmental damage. Those amounts have not been adjusted since 1998.
San Francisco Chronicle
Brown signs bill to regulate fracking...Bob Egelko
Gov. Jerry Brown signed legislation Friday to regulate the oil drilling method known as hydraulic fracturing, or fracking, and study its risks, a measure that drew opposition from oil companies and divided environmentalists.
SB4 by Sen. Fran Pavley, D-Agoura Hills (Los Angeles County), is the first California law to address fracking, in which a blend of water, sand and chemicals is blasted into wells to crack underground rocks that contain oil or natural gas.
Under the new law, drillers must obtain a fracking permit from the state agency that oversees oil drilling, must notify nearby property owners in advance and must disclose chemicals they plan to use in the process. The law also requires the agency to conduct a statewide study of fracking's potential impact on air and water quality and to issue detailed regulations for the permits by 2015.
The same requirements will apply to acidizing, which uses powerful acids to extract oil from rocks.
Brown said the law, which takes effect in January, "establishes strong environmental protections and transparency requirements" for the practices it covers.
The Western States Petroleum Association, which fought SB4, told lawmakers the measure would "unnecessarily and substantially threaten our supplies of oil and natural gas."
Fracking has greatly increased oil and natural gas production nationwide and has been used in about 1,000 wells in California since the start of 2011, according to a website that tracks the practice. Oil companies are using it to dig into the Monterey Shale, a rock formation that may hold more than 15 billion barrels of crude oil.
Opponents say it contaminates water supplies, releases large amounts of climate-changing greenhouse gases and increases the nation's dependence on fossil fuels.
While the American Lung Association, the Environmental Defense Center and San Francisco Baykeeper supported SB4, the Sierra Club opposed it, and other prominent organizations, including the Natural Resources Defense Council and the California League of Conservation Voters, withdrew their support in the final weeks.
Those environmental groups favored a moratorium or a ban on fracking, but their bills to halt the practice died in Sacramento. They also argued that amendments Pavley accepted shortly before final passage would allow the state to approve fracking in 2014 under rules that are more permissive than existing environmental laws.
"It has the potential to be a Wild West, gold-rush approach to fracking," at least until the new regulations take effect in 2015, Kathryn Phillips, the Sierra Club's legislative director in California, said Friday.
Pavley disagreed, saying her bill would impose tough restrictions immediately. "This is a first step toward greater transparency, accountability and protection of the public and the environment," she said in a statement.
Los Angeles Times 
Brown signs bill on fracking, upsetting both sides of oil issue
Oil industry says the rules go further than needed for safe drilling. Environmentalists contend there aren't enough protections…Marc Lifsher and Patrick McGreevy,0,76885...
SACRAMENTO — The nation's toughest restrictions on a controversial oil drilling technique known as fracking were signed into law by Gov. Jerry Brown on Friday.
Hotly opposed by the oil industry, the measure "establishes strong environmental protections and transparency requirements," the governor said in a statement.
Brown also signed measures giving law enforcement officers clear authority to take blood samples from resistant suspected drunk drivers; making it easier for police to recover stolen goods; and setting rules for California's health insurance exchange.
At issue in the hydraulic fracturing measure is the injection of sand, water and chemicals to free oil and natural gas trapped in shale deep underground. The oil industry heralds the technique as a way to boost domestic oil and gas production; opponents contend it is unsafe and endangers underground drinking-water supplies.
The governor's signature "is a first step toward greater transparency, accountability and protection of the public and the environment," said Sen. Fran Pavley (D-Agoura Hills).
Her bill, SB 4, is the sole survivor of a half-dozen fracking proposals in the Legislature this year. It requires permitting of wells, notification of neighbors living near drilling, groundwater testing and a study of fracking's impact on the environment. It takes effect Jan. 1, 2014.
The bill also would set rules for a related technique involving the shooting of acid solutions into the wells to release hydrocarbons.
Oil industry reaction was muted. Companies complained that the regulations go further than they thought necessary for safe drilling.
But Catherine Reheis-Boyd, president of the Western States Petroleum Assn., a trade group, welcomed the chance to continue exploring oil-rich areas in the central and southern San Joaquin Valley.
In a statement, she stressed that her members now can move forward with "an environmental platform on which California can look toward the opportunity to responsibly develop the enormous potential energy resource contained in the Monterey Shale formation."
Most environmental groups wanted a veto. The governor's action "is disappointing," said Kathryn Phillips, California director of the Sierra Club. "This bill does not provide the kind of protection or approach to fracking that we need."
In his signing message, Brown directed the state's Department of Conservation to develop "an efficient permitting program" to fine-tune the new regulations.
In a related matter, Brown also signed a bill to bolster bonding requirements to make sure that drillers can pay for the cost of repairing environmental damage they might cause.
That bill, SB 665 by Sen. Lois Wolk (D-Davis), "will shift the financial burden of responding to abandoned wells or other violations from taxpayers to oil and gas drillers," Wolk said.