Fate of Injection Wells in Historically Exempt Aquifers Comes Closer to Determination

A lawsuit seeking an immediate halt to oil and gas wastewater injection at 2,500 wells across California took a positive turn for energy producers last week as Superior Court Judge George C. Hernandez denied plaintiffs’ motion for a preliminary injunction in a closely watched case challenging long-standing operations in the California oil and gas industry.

Plaintiffs in Center for Biological Diversity v. California Department of Conservation, California Superior Court, Alameda County, asked the court to throw out the emergency proposed rulemaking recently issued by the Division of Oil, Gas and Geothermal Resources (“DOGGR”). Additionally, the plaintiffs sought an injunction to stop injection wells operating in disputed aquifers.

Under the emergency proposed rulemaking, wastewater injections into non-exempt aquifers must be phased out by 2017. The proposed phasing-out period gives both DOGGR and the U.S. Environmental Protection Agency (“EPA”) the opportunity to determine whether some of the aquifers should be considered suitable places to inject produced water.

In finding no evidence of risk of imminent harm to protected non-exempt aquifers, the court concluded: “On this record, the threat of such contamination [of drinking water aquifers] is theoretical and speculative and plainly outweighed by the other harms [to the public, economy and industry] which are virtually certain to occur if an injunction issues.” Continue Reading

Gov. Brown Assembles Fracking Review Panel

According to several news organizations, Governor Brown has announced plans to form a new panel to review the recent well stimulation study conducted by the California Council on Science and Technology (“CCST”).

The study found that while there is little evidence that hydraulic fracturing is directly linked to widespread negative health and environmental impacts, additional data and record-keeping may be necessary.

The new panel will be composed of individuals from nine different state agencies.  The individuals have yet to be announced.

The announcement comes shortly after a flurry lawsuits attempting to curb oil and gas production throughout the state.  In one case, the plaintiff claims that the state’s well stimulation regulations are discriminatory against minorities.  Another case seeks to impede the opening of federal land in California to oil and gas development.  In yet another case, the plaintiffs seek an immediate halt to oil and gas wastewater injection.

The increased scrutiny comes despite repeated assurance from the Division of Oil, Gas and Geothermal Resources that there has been “no contamination of water used for drinking or agricultural purposes related to underground injection by the oil and gas industry” and “no evidence has been found that underground injection has damaged sources of potential drinking water.”

Furthermore, U.S. Environmental Protection Agency, found that hydraulic fracturing posed no “widespread, systemic” threat to drinking water.

California is the third largest oil producing state in the nation.  The CCST study found that oil produced in California using hydraulic fracturing emits less greenhouse gas per barrel than the average barrel imported to California.

Independent Study on California Fracking Released

The California Council on Science & Technology (“CCST”) recently released its Independent Study of well stimulation in California. The report was prepared for the California Natural Resources Agency in response to Senate Bill 4 (“SB 4”).

The Study notes the following key points:

  • Hydraulic fracturing in California does not use a lot of fresh water compared to other states and other human uses.
  • Available evidence indicates that impacts caused directly by hydraulic fracturing or acid stimulation or by activities directly supporting these operations appear small.
  • No recorded negative impacts from hydraulic fracturing chemical use in California were found; however, governmental reporting should be expanded.
  • Additives used in hydraulic fracturing and acid stimulation should be evaluated to reduce any potential adverse impacts.
  • The potential impacts caused by hydraulic fracturing are similar to oil development practices generally, even without the use of hydraulic fracturing.
  • There is a potential for additives used in hydraulic fracturing and acid stimulation to react with other elements underground causing the chemistry to change over time.
  • Fluid injected in the process of hydraulic fracturing will not likely cause earthquakes of concern.
  • Oil produced in California using hydraulic fracturing emits less greenhouse gas per barrel than the average barrel imported to California.

Continue Reading

Plaintiff Seeks to use Anti-Discrimination Law to Stop Fracking

On July 14, a complaint was filed in Sacramento County Superior Court against Governor Brown and the Division of Oil, Gas & Geothermal Resources (“DOGGR”) Supervisor Steve Bohlen.  The lawsuit claims Governor Brown and Supervisor Bohlen have adopted regulations that result in racially disparate impacts from well stimulation on minority students.

State regulators recently implemented final regulations pursuant to Senate Bill 4 (“SB 4”), which increased regulatory oversight over all well stimulation activities, including hydraulic fracturing.

Under Government Code section 11135(a), no person shall be unlawfully subjected to discrimination under any program conducted by the state or any state agency.

The plaintiff in the action is the parent of two minority children who attend school in Kern County, California.  In this novel lawsuit, the plaintiff claims that his children have suffered psychological distress due to well stimulation activities occurring near their schools and that a disproportionate number of minority children attend schools near stimulated wells.  The complaint states that Latino students are 18.4 percent more likely to attend school within 1.5 miles of a hydraulic fracturing operation than a non-Latino student.

The lawsuit seeks to invalidate the SB 4 regulations and enjoin the defendants from approving any well stimulation permits until well stimulation can be conducted in a non-discriminatory way.

The lawsuit comes just days after an Independent Study found “no recorded negative impacts from hydraulic fracturing chemical use” and “no records of groundwater contamination due to hydraulic fracturing.”  Indeed, the EPA also recently released a Study, which found no signs of “widespread, systemic” drinking water pollution from hydraulic fracturing.

California SB 4 Compliance Handbook: New Third Edition Now Available!

New Third Edition Reflects July 1 Permanent Regulations of Hydraulic Fracturing

We have prepared an update to the firm’s SB 4 Compliance Handbook to aid operators in their efforts to comply with SB 4 and its new permitting scheme. Senate Bill 4 (“SB 4”) regulates well stimulation treatments in California, including hydraulic fracturing and acid well stimulation. The law creates a permitting system, requires water testing and monitoring for surface and groundwater near the treatment site, and it places obligations on state agencies to study any environmental effects of well stimulation treatment. SB 4 requires the Division of Oil, Gas & Geothermal Resources (“DOGGR”) to finalize and implement permanent regulations, effective July 1, 2015.

The revised Third Edition reflects the requirements of the final regulations and provides details on the Water Board regulations for groundwater monitoring. The Handbook includes operator compliance obligations, disclosure requirements, neighbor notification requirements, and groundwater monitoring plan requirements.

To download a full-text PDF of the updated Handbook, please register here.

Water Board Signs Off on New Fracking Requirements

Yesterday, July 7, the State Water Resources Control Board (“Water Board”) adopted new requirements (“Model Criteria”) for groundwater monitoring in areas where oil and gas stimulation activities occur, such as hydraulic fracturing. The Water Board was required to develop these requirements pursuant to Senate Bill 4 (“SB 4”).

The requirements cover a wide range of new obligations on oil and gas producers, including: monitoring and sampling methods, chemicals to analyze, frequency of sampling, and areas to monitor. Under the Model Criteria, monitoring is required when a well to be stimulated penetrates “protected water for current and future beneficial use,” which is defined as:

  • Water with less than 10,000 mg/L total dissolved solids, and
  • Outside an exempt aquifer (meeting the criteria of Code of Federal Regulations, title 40, part 146.4).

The Model Criteria requires, at a minimum, one upgradient and two downgradient monitoring wells for each aquifer containing protected water penetrated by a stimulated well or group of wells. When multiple aquifers containing protected water are penetrated by a stimulated well, at least two aquifers must be monitored, the shallowest and deepest aquifer.

Felicia Marcus, Chair of the Water Board, called the new requirements “the strictest in the nation.” California is the third-largest oil producing state in the United States. Hydraulic fracturing has become an important process in oil and gas production throughout the state, particularly in the Central Valley.

The new regulations come despite a recently released EPA study, which found no signs of “widespread, systemic” drinking water pollution from hydraulic fracturing.

On Monday, July 13, Stoel Rives will release a comprehensive SB 4 Handbook to aid operators in their efforts to comply with SB 4 and its accompanying regulations.  The Handbook will be available on the Stoel Rives SB 4 Resources page.

DOGGR Releases Final Well Stimulation EIR

Yesterday, July 1, 2015, pursuant to Senate Bill 4 (“SB 4”) the State Oil & Gas Supervisor Steven Bohlen, head of the Department of Conservation’s Division of Oil, Gas, and Geothermal Resources (“DOGGR”), certified a Final Environmental Impact Report (“Final EIR”) for oil and gas well stimulation treatments.

As presented in the Final EIR, for the purposes of CEQA, the “project” involves hydraulic fracturing, acid fracturing, or acid matrix stimulation of an oil and gas well, where the well either (1) existed prior to January 1, 2014, or (2) could be drilled after January 1, 2014, specifically for the purpose of a well stimulation treatment.

Further analysis of the Final EIR will follow on this blog in the coming days and weeks.

Deadline Extension For California’s Industrial Storm Water Permit

The new California Industrial General Storm Water Permit (IGP) is scheduled to take effect on July 1, 2015. That date was also the deadline for facilities already operating under the previous 1997 IGP to submit any updates to their compliance documents. Additionally, facilities newly covered by the new IGP needed to register and submit their compliance documents by July 1, 2015, unless they planned to seek “no exposure certification.”

The new IGP requires that all compliance filings be made electronically through the State Board’s “Storm Water Multiple Application Reporting and Tracking System” (SMARTS).

However, due to technical issues affecting the bandwidth of the system and restricting access to the SMARTS database, SMARTS had been limiting new enrollments or annual submittals from existing enrollees. As a result of these technical challenges, the July 1, 2015 deadlines have been extended to close of business on Friday, August 14, 2015.

Additionally, the database issues luckily have not impacted saved work items in SMARTS.

However, any covered facility seeking “no exposure certification” must apply and submit other registration material by the currently unchanged October 1, 2015 deadline.

Look here for additional information.

For more information about ensuring your compliance with the new Industrial Storm Water permit, please contact Michael Mills (michael.mills@stoel.com, 916.319.4642), Missy Foster (melissa.foster@stoel.com, 916.319.4673),  Parissa Florez (parissa.florez@stoel.com, 858-794-4106), or the Stoel Rives attorney already tracking the 2014 Permit for you. More information about Stoel Rives’s water quality practice may be found here.

Ninth Circuit Limits Clean Air Act “Nonattainment Fees” in California’s San Joaquin Valley

The Ninth Circuit Court of Appeals capped a saga of over seven years on June 18 by extending its March 11, 2015 ruling in support of alternatives to imposing hefty fees on individual companies which have complied with the law, but happen to do business in California’s Central Valley or South Coast. Environmental groups challenged USEPA’s approvals of the alternatives adopted by both the South Coast Air Quality Management District and the San Joaquin Valley Air Pollution Control District. The March 11 ruling, in Natural Res. Def. Council v. EPA (9th Cir. 2015) 643 F.3d 311, upheld the SCAQMD’s alternative, which pays the fees from surplus air quality plan funds. The June 18 ruling in Medical Advocates for Healthy Air v. US Environmental Protection Agency (9th Cir. June 18, 2015, No. 12-73386 (opinion ordered nonpublished)) clarified extension of the March ruling to uphold the SJVAPCD’s alternative, which pays the fees from motor vehicle fees.

Background:

The 1990 Amendments to the Federal Clean Air Act added Section 185 imposing “nonattainment fees” on any “Major Source” of emissions in any area that had severe or extreme air quality problems Southern California and the San Joaquin Valley fell squarely within this provision, which also would apply to businesses emitting over 10 tons per year (100 tons applies to many US regions). While failure was alleged for the region, yet the fees would be levied on individual businesses even though most were in full compliance with the strictest air quality requirements in the Country. Continue Reading

To Curtail Or Not To Curtail…That Is the Question

On June 12, the State Water Board issued a notice of “unavailability of water” and the “need for immediate curtailment” from various water users holding pre-1914 water rights.  Less than two weeks later on June 23, lawyers for the State Water Board reportedly stated in court this curtailment notice is advisory only, which would seem to mean the notice is not enforceable.

Pre-1914 water rights (a special type of appropriative right) are often thought to be safe from regulation, at least in terms of the water right not being subject to reduction.  The rationale stems from a: (i) procedural issue of whether the State Water Board has jurisdiction to regulate a pre-1914 water right, and, (ii) substantive issue of the classic, appropriative right principle of first in time is first in right.  Pre-1914 water right holders in particular are very senior holders and thus thought to be far less likely to be subject to reduction or curtailment, especially if more junior water right holders have not been curtailed first.  Though the State Water Board issued other curtailment notices in the past couple of months, the June 12 notice was directed specifically to those with pre-1914 rights or claims from 1903 to 1914 in the Sacramento-San Joaquin watersheds and Delta.  Less than one week later on June 18, Banta-Carbona Irrigation District filed a petition for writ of mandate in San Joaquin County Superior Court, with a motion to stay set for argument yesterday.  Reports indicate the District’s motion to stay the curtailment notice was not ruled upon, but instead the Court granted the State’s request to remove the case to a less partial county yet to be identified, and during this hearing, the State’s lawyers reported said the notice is advisory.

Unanswered questions are whether the curtailment notice is enforceable and whether the State Water Board will seek to enforce the notice.  Meanwhile, growers, districts, and other water-right holders (and many others reliant on water-right holders) are left with a short menu of options (to comply or not to comply) but bearing tremendous consequences.  Dire economic circumstances may result from curtailing by way of diminished crops, vineyards, and in many other ways, or, not curtailing may result in hefty fines if the notice or some other State Water Board efforts to curtail are successful in court.

It certainly will be interesting to see how the reportedly advisory nature of the notice will impact the case, as well as similar lawsuits and future State Water Board decisions.  While the water users might have a short menu of options, so too does the State Water Board when it seeks to curtail or not to curtail based on the existing notice or perhaps issuing a new notice with the opportunity afforded to water right holders for administrative hearings and presentation of evidence.

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