California Bills Seek More Disclosure, Oversight of Fracking

By LAURA OLSON | March 12, 2013

The growing concern over hydraulic fracturing, the technology that has led to an oil and gas boom in many parts of the country, has caught the attention of California lawmakers as companies seek to expand production in the San Joaquin Valley oil fields.

At least eight bills proposing to regulate or tax the industry’s expansion are under consideration in this year’s legislative session. They include proposals that would require disclosure of the ingredients used in fracking, which uses a high-pressure blast of water and chemicals to release oil from deep rock formations, and ensure that drilling companies have adequate plans for handling wastewater and monitoring groundwater.

A federal report last year identified the Monterey Shale, which stretches from Kern County’s historic oil fields north through the San Joaquin Valley, as one of the largest oil deposits in the nation. That forecast helped re-ignite interest in the reserve but also raised alarm among environmental groups that see regulators as favoring industry.

Several of the bills are from lawmakers who introduced fracking-related legislation last session. After those proposals failed, the state Department of Conservation in December released draft regulations that the agency wants to approve within the next 18 months. A hearing on those draft rules is scheduled for Wednesday in Bakersfield.

Oil drilling dates to the 19th century in California, which was the third-largest oil-producing state last year, behind Texas and North Dakota, according to data from the U.S. Energy Information Administration.

Fracking has been practiced for decades, but its use on a larger scale to release hard-to-access oil and gas deposits in Texas, Pennsylvania and North Dakota has raised fears about potential effects on water quality and public health.

New York, for example, has had a moratorium on fracking since 2008. A decision by Gov. Andrew Cuomo on whether to allow the practice and how to regulate it has been delayed several times as officials continue to review health and environmental impacts.

All California oil wells are subject to the same regulations, with no specific rules for those using hydraulic fracturing.

The industry defends fracking as proven to be safe over their history of drilling in the Monterey reservoir and point to the state’s already stringent environmental rules. Tupper Hull, a spokesman for the Western States Petroleum Association, said it remains unclear whether the practice is the best way to release the oil inside the shale rock itself, which seismic activity has made less uniform than other formations.

Instead of pursuing new laws, legislators should wait for the state Department of Conservation to complete its rule-making process, Hull said.

“If members of the Legislature and others then feel there are gaps in the law and want to offer proposals to make energy production safer, that’s a conversation to have,” he said. “But if you want to introduce proposals to stop drilling, then that’s not productive.”

Other bills introduced this year would require fracking wastewater to be regulated by the state as a hazardous waste, boost the amount of the bonds drillers must post in case of environmental damage and enact a tax on oil production, as other oil-producing states have.

Lawmakers and outside groups following the issue say a bill seeking a moratorium on fracking also is a possibility.

Assemblyman Bob Wieckowski, D-Fremont, has been working on separate rules for fracking since 2011. He said passing legislation this year would ensure that the agency has proper authority to enact tough regulations. His previous effort died in the Senate because of disagreements about how much protection companies should be allowed regarding trade-secret chemicals.

State officials asked companies in June to voluntarily disclose chemicals they use on, a website that compiles data on fracking fluid used across the country. Data are available for 756 state oil wells dating to January 2011.

Wieckowski said he sees increased support this year for changes, pointing to a handful of freshmen senators who supported his effort last year in the Assembly. Those voting to approve his previous bill included Sen. Jerry Hill, a San Mateo Democrat who will become chairman of the Senate Committee on Environmental Quality.

“There are no disclosure requirements now in California,” Wieckowski said. “Do you want the perfect bill or a bill that at least elevates the standards?”

Environmentalists said getting tougher rules in place swiftly is vital. They expressed frustration with steps Gov. Jerry Brown’s administration took in 2011 to accelerate permit approval and his decision to fire two regulators who resisted that effort.

“There’s rising interest in our Legislature about fracking and (state regulators’) ineptness and cozy nature with the oil and gas industry,” said Bill Allayaud, director of government affairs in California for the Environmental Working Group.

The Brown administration is not actively supporting any of the pending bills. It has indicated it might support proposals allowing the public to challenge claims of trade-secret protections if those proposals appropriately balance intellectual property rights with the need for public disclosure.

Sen. Lois Wolk, D-Davis, is seeking to revise rules for oil-well bonding. She said lawmakers need to ensure that the bonding amounts, which have been in place since 1998, are adequate to cover potential damage and damage from fracking would be covered.

“This is preventative care,” she said.

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