Court’s Tentative Decision Sides in Favor of DOGGR in CBD’s Wastewater Injection Lawsuit

As reported in a previous blog post, Earthjustice, on behalf of the Center for Biological Diversity (“CBD”), filed a lawsuit against the California Division of Oil, Gas, and Geothermal Resources (“DOGGR”) in May 2015.  The lawsuit attacked DOGGR’s emergency rulemaking for aquifer exemption compliance.  Not surprisingly, like all of CBD’s spurious lawsuits attacking DOGGR for implementing its regulatory duties, on August 2, 2016, an Alameda County Superior Court judge issued a tentative ruling denying CBD’s petition for writ of mandate. This is another setback for CBD’s litigation strategy of impeding DOGGR in order to cripple the oil and gas industry.

DOGGR issued the emergency rules in response to a letter from the U.S. Environmental Protection Agency that addressed California’s compliance with the federal Safe Drinking Water Act (“SDWA”) and the Class II Underground Injection Control (“UIC”) program.  Following DOGGR’s issuance of the emergency rules, the EPA stated “[t]he State’s emergency regulations to codify deadlines for injection well operators to cease injection, absent EPA-approved aquifer exemptions, is a critical step in the State’s plan to return the California Class II UIC program to compliance with the SDWA.”  In other words, California regulators were doing what they were supposed to do under the law.

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California Supreme Court Addresses Intersection of City Right-of-Way Dedication Requirements and Project Influence in Valuing Condemned Property

Just compensation in condemnation has long been held to require payment that is fair to both the property owner having its property seized and the public taking it. Two of the rules that have developed in this pursuit of fairness came face to face in a recent case, City of Perris v. Stamper, No. S213468, 2016 Cal. LEXIS 6749 (Cal. Aug. 15, 2016). In light of the court’s holding in Perris, property owners reviewing compensation offers may need to pay particular attention to the timing of land use plans and public project announcements applicable to their property.

In Perris, the City bisected Stamper’s vacant light-industrial zone property with a 1.66 acre acquisition to construct a road. The City offered Stamper $44,000 in compensation. Stamper demanded $1.3 million. The basis for this vast difference in valuation lay in the appraisal assumptions.

The City took the position that Stamper’s industrially zoned land should be valued as if it were agricultural. Given that developing his larger property with an industrial use would, in the City’s estimation, require as a condition of City approval that Stamper dedicate the property that the City was condemning to the City without compensation, the true value of the property was no more than its value in agricultural use. The City’s theory was consistent with the holding in another case, City of Porterville v. Young, 241 Cal. Rptr. 349 (Cal. Ct. App. 1987), that deemed the valuation approach appropriate so long as the dedication met the constitutional requirements of rough proportionality of the required dedication to the development’s impact and essential nexus of the required dedication to a valid public purpose. Continue Reading

When Will They Ever Learn? CBD Files Another Questionable Lawsuit Against DOGGR

On August 3, 2016, the Center for Biological Diversity (“CBD”) filed suit against the California Division of Oil, Gas, and Geothermal Resources (“DOGGR”) and the State Water Resources Control Board (“Water Board”), challenging the regulators’ decision to approve an aquifer exemption for the Arroyo Grande oil field.  Its latest lawsuit against DOGGR, filed in the Superior Court for the City and County of San Luis Obispo, CBD alleges that DOGGR and the Water Board failed to conduct environmental review, in violation of the California Environmental Quality Act (“CEQA”).  In order to appreciate the claims in the case, some background is necessary.

The Safe Drinking Water Act and Aquifer Exemptions

The federal Safe Drinking Water Act (“SDWA”), 42 U.S.C. §§ 300g et seq., prohibits injection of fluids that may harm human health into an underground source of drinking water.  An “exempt aquifer” is an aquifer for which protection under the SDWA has been waived because the aquifer does not currently serve as a source of drinking water and could not serve as a source of drinking water in the future due to existing mineral production, depth of the aquifer, or existing contamination.  40 C.F.R § 146.4.  In short, an aquifer is exempt from the SDWA when it could not feasibly serve as a source of drinking water.

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Alameda Fracking Ban: All Bark with No Bite

On July 19, 2016, Alameda County, California (“County”) became the first county in the Bay Area to approve a ban on hydraulic fracturing (or “fracking”).  The County Board of Supervisors unanimously approved the ban through an amendment to the Alameda County Zoning Ordinance (“Ordinance”).  Gen. Ordinance Code §§ 17.06.100-17.06.400.

The Ordinance bans “high-intensity oil operations” which include fracking, steam injection, cyclic steaming, and all other forms of well stimulation.  The Ordinance allows waterflooding and permits an operator to continue oil production by methods authorized under a Division of Oil, Gas and Geothermal Resources (“DOGGR”) permit, if those methods are not banned.  Waterflooding, a technique that includes recycling produced water to the oil reservoir, may be done only by water that is produced from the well itself.  “Produced water” is water that comes to the surface through oil production and oftentimes has no beneficial reuse due to its natural characteristics.  The Ordinance prohibits disposal of hydraulic fracturing fluids, drawing a distinction between produced water and fracking fluids.  “High-intensity oil operations” does not include injection of produced water.

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Construction For The California High-Speed Rail Is Chugging Right Along

The California High-Speed Rail Authority (“CHSRA”) issued a press release with the status of its construction work for the high-speed rail project (the “Project”) at seven active sites in the Central Valley.  Many of the Project’s segments in Madera and Fresno are beginning to see development; the foundation has been established in several sections, rebar cages to form columns have been tied, and steel and concrete girders to rebuild the Tuolumne Street Bridge have been put into place.

The CHSRA’s realignment of State Route 99 from Clinton to Ashlan, is also underway to make way for the Project.  As of March 31, 2016, the Finance and Audit Committee announced that the CHSRA has acquired 28 properties along State Route 99 through negotiated contracts or stipulated orders of possession.  As of the last Finance and Audit Committee in May 2016, an additional 16 properties still need to be acquired by the CHSRA to complete the realignment of State Route 99.  

 Check out the High-Speed Rail Authority’s website to access more information about each of the projects.         

 

Proposed Oil Refinery Regulations Tackle Safety Concerns

On July 14, 2016, the California Environmental Protection Agency (“EPA”) announced a “landmark set of regulations to strengthen workplace and environmental safety at oil refineries across the state.”  The refinery safety rules consist of two sets of regulations:  one amending the California Occupational Safety & Health (“OSHA”) worker safety regulations as they apply to refineries, and the other revising the California Accidental Release Prevention program (“CalARP”) regulations.  The regulations implement recommendations from Governor Jerry Brown’s Interagency Working Group on Refinery Safety, which was convened following a chemical release and fire at a refinery in August 2012.

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What You Need to Know about the Proposed Revisions to Cap and Trade

Late Tuesday, the California Air Resources Board (ARB) released draft amendments to the state’s cap and trade regulation, including revisions to the current program in place through 2020, an extension of the program through 2030, and setting the stage for continued emissions reductions under the program through 2050.  ARB’s proposed amendments come in the middle of a recent milieu of uncertainty:  pending litigation challenging the legality of the existing program, an opinion from Legislative Counsel that ARB lacks authority under AB 32 to continue cap and trade past 2020, unprecedented weak demand at the most recent allowance auction, and legislation to establish a statutory emissions reductions mandate for 2030 still in process this session.  With all of these balls in the air, ARB has doubled down and drafted regulations dropping the program’s emissions cap from 334.2 million metric tons (MMT) of CO2e in 2020 to 200.5 MMT in 2030, with major elements of the cap and trade regulation continuing in effect past 2020 to achieve the emissions reductions.

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Does California Bear A Water “Windfall” From Deep-Aquifer Sources?

Stanford University released a study this week stating that California has three times more useable groundwater located in deep aquifers than previously estimated.  This might come as welcome news to a state that continues to suffer through a historic drought.  The researchers found that fresh groundwater was available at depths previously thought to be too deep to contain fresh water.

At the outset, readers should note that “freshwater” and “drinking water” are terms of art having regulatory and legal distinctions, and ultimately making a difference for the public welfare. The definition of freshwater varies depending on the state or federal agency; however, freshwater is generally defined as having less than 3,000 mg/L of total dissolved solids (“TDS”).  Underground Sources of Drinking Water (“USDW” or “drinking water”) as defined by the Environmental Protection Agency include groundwater aquifers with less than 10,000 mg/L TDS.  For reference, seawater contains approximately 35,000 mg/L TDS.

Historically, California’s fresh groundwater supply was thought to be limited to water found above 1,000 feet. However, the researchers determined that the mean base of fresh water (“BFW”) in five Central Valley counties (Kern, Fresno, Solano, Colusa, and Yolo) ranged from 1,345 feet (Colusa) to 2,204 feet (Kern).  The base of drinking water is considerably deeper than the freshwater.  Specifically, USDW can be found in Kern and Los Angeles Counties at depths deeper than 8,200 feet. Continue Reading

Updated Status of Oil- and Gas-Related Bills Proposed in California’s 2015-2016 Legislative Session

June 3, 2016 was the final deadline for oil- and gas-related bills introduced in the 2015-2016 legislative session to move through their house of origin.  Below is a summary of those bills, many of which relate to natural gas storage following the Aliso Canyon natural gas well leak.  Stoel Rives is monitoring these bills and will provide updates as the bills move through the legislative process.

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The Other Shoe Just Dropped on Methane Emissions from the Oil and Gas Industry

Not to be outdone by its federal counter-parts, the California Air Resources Board (“ARB”) released Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“proposed rule”) for methane emissions on Tuesday, May 31, following a slew of recent federal regulations targeting reduction of methane emissions.  Cal. Code Regs. tit. 14, §§ 95665-95676 (proposed).  The federal Bureau of Land Management released proposed regulations for reducing waste and methane emissions in oil and gas operations in January 2016.  Then, in May 2016, the U.S. Environmental Protection Agency also began regulating methane when it released final regulations to curb emissions of methane and volatile organic compounds from additional new, modified, and reconstructed sources in the oil and gas industry.

While methane is the current emissions target for regulators’ greenhouse gas reduction efforts, the oil and gas sector is the industry target.  The proposed rule is part of California’s plan to reduce emissions from short-lived climate pollutants, including methane emissions, by 40-45% by 2025.  This follows the Obama Administration’s similar methane emissions reduction goal.

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