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.

State Water Board Receives Groundwater Monitoring Recommendations from Experts

The State Water Resources Control Board (“Water Board”) has recently released recommendations from the Lawrence Livermore National Laboratory (“LLNL”) on Model Criteria for Groundwater Monitoring. Pursuant to Senate Bill 4 (“SB 4”), the Water Board is required to develop regulations for sampling, testing, and monitoring groundwater during hydraulic fracturing operations. The bill requires groundwater monitoring at scales from single well monitoring to regional monitoring.

The recommendations are designed to assist the Water Board in taking a scientifically credible approach in developing groundwater monitoring regulations. The authors acknowledge the immense challenge of developing a set of regulations to govern well stimulation in California due to the unique and dynamic nature of each oil field.

The report recommends a tiered approach to groundwater monitoring where higher quality water is monitored more intensively than lower quality water. The monitoring would be conducted through one upgradient and two downgradient wells within a one-half to one-mile radius of the stimulated oil well. Continue Reading

Governor Selects David Bunn to Lead Department of Conservation

Yesterday, Governor Jerry Brown appointed David Bunn, a former fish and game official and U.C. Davis academic, to lead the California Department of Conservation. The appointment comes after the departure of Director Mark Nechodom, who resigned earlier this month.

As director of the Department of Conservation, Bunn will inherit an office that administers a variety of programs vital to California’s public safety, environment and economy, including the Division of Oil, Gas and Geothermal Resources (“DOGGR”). DOGGR is tasked with overseeing the development of California’s oil, gas, and geothermal resources while protecting the environment.

Bunn has worked in the private sector, the state Legislature, the executive branch, and academia. He co-founded American Trash Management and served as field manager from 1991 to 1996. In 2003, Bunn became a project director and researcher at the U.C. Davis School of Veterinary Medicine and has been associate director at the school’s College of Agricultural and Environmental Sciences’ Office of International Programs since 2011.

Bunn’s appointment will be sent to the Senate for confirmation.

Fish & Game Code Section 1602 Is Unambiguous, Now Requiring More Water Users To Provide “1602 Notification” To “Substantially Divert” Water

On June 4, 2015, the Court of Appeal ruled that California Fish and Game Code section 1602 (“Section 1602”) unambiguously requires notification to the Department of Fish and Wildlife (“Department”) if an entity or individual plans to “substantially divert” water, even when the legal right to use the water was previously established. (Siskiyou County Farm Bureau v. Department of Fish and Wildlife, June 4, 2015, Third Appellate District, Case No. C073735.)

Siskiyou County Farm Bureau (“Farm Bureau”) sought clarification of the rights and duties of its members under Section 1602 by alleging in part that local ranchers and farmers diverted water for decades without the Department enforcing Section 1602. By reversing the trial court, the Court was not persuaded by this or the Farm Bureau’s other contentions.

Establishing early in its Opinion that “substantial” is unambiguous, the Court focused on why “divert” also is unambiguous due to the trial court finding that the plain meaning of “divert” – lack of alteration to the streambed – would lead to absurd results, among other things.

The Court navigated through historical effects of the Gold Rush on rivers and streams, California water law principles, historical background and interpretations of Section 1602, and whether extrinsic evidence admitted by the trial court established an equally plausible statutory interpretation (which, if found to exist, would render Section 1602 ambiguous). Of particular note, the Court addressed a “concern” raised in People v. Weaver (1983) 147 Cal.App.3d Supp. 23 that Section 1602 might have been written more broadly than intended by encompassing “ordinary” agricultural pumping. Dispelling Weaver’s concern, though concluding pumping alone may trigger Section 1602’s notification requirement, the Court traced back to a 1973 Attorney General opinion while also analyzing the ordinary meaning of “divert” and related legal and administrative interpretations of the word.

What Siskiyou County Farm Bureau means is: (1) a broad set of water users – agricultural and others – must provide the Department with Section 1602 notification, which will typically require the applicant to enter into an agreement with the Department to take measures to protect fish and wildlife resources; (2) CEQA and other regulatory processes and compliance measures will be triggered by Section 1602 water diversion plans; and (3) proposed water diversions might be limited despite holding vested water rights for those proposed diversions.

Ultimately, California’s ongoing drought clearly was on the Court’s mind given its statement that “…a severe drought, which has the effect of further damaging the habitat of endangered fish species, must be part of the factual matrix…” (Opinion, p. 37.) As the Court indicated, a remedy for fixing a perceived policy defect with Section 1602 may lie “on the other side of Tenth Street, in the halls of the Legislature.” (Opinion, p. 3.) The Opinion is available at: http://www.courts.ca.gov/opinions/documents/C073735.PDF.

Yet Another Lawsuit Seeking to Limit California Oil Development

The clamor over hydraulic fracturing continued Wednesday as environmental activists filed another lawsuit to limit oil and gas development in California.  The lawsuit, filed by Earthjustice on behalf of the Center for Biological Diversity and Los Padres ForestWatch, challenges a plan to open portions of federal land in California to oil and gas operations.

The groups claim that the Bureau of Land Management (“BLM”) did not consider the environmental impacts of hydraulic fracturing when it approved a Resource Management Plan, which could potentially open a large area of federal land in the state’s most oil-rich regions to leasing.  The plan found that “overall, in California, for industry practice of today, the direct environmental impacts of well stimulation practice appear to be relatively limited.”

In 2013, a federal judge ruled that the BLM violated the National Environmental Policy Act when it issued oil leases in Monterey and Fresno counties without considering the environmental impact of hydraulic fracturing.  This ruling has led to a de facto moratorium on new leasing in California on federal lands. Continue Reading

Update on California Water Legislation Regarding Groundwater, Recycled Water and More

June 5, 2015 marked the deadline for lawmakers to pass bills out of their house to the opposite house. Bills that did not pass in their house of origin by that date have effectively died (unless such a bill has been identified as a 2-year bill). Stoel Rives’ Water Law Team has been monitoring water-related legislation, especially given California’s historic drought. Our Water Law Team will continue to monitor these bills, among many others, including environmental-related legislation, throughout the 2015-2016 Legislative Session. We will provide periodic updates as these bills move through the legislative process. Below is the status and summary of some of the bills Stoel Rives is monitoring.

SUPPLY AND GROUNDWATER

AB-307 (Mathis): Graywater: groundwater recharge
STATUS: This bill is a 2-year bill and currently pending referral in the Assembly.

If passed by the legislature and signed into law, AB-307 would state the intent of the Legislature to enact legislation to explicitly permit the usage of residential, commercial and industrial graywater for the recharge of a groundwater basin or aquifer.

AB-453 (Bigelow): Groundwater Management
STATUS: AB-453 passed the Assembly on April 16, 2015 and currently is scheduled for hearing on June 23, 2015 before the Senate Committee on Natural Resources and Water.

If passed by the legislature and chaptered, this bill would authorize, until a groundwater sustainability plan is adopted, a local agency to amend an existing groundwater management plan in furtherance of, and consistent with, the groundwater management plan’s objectives. Continue Reading

New Clean Water Rule Unlikely To Significantly Change Regulatory Status Quo…At Least For Now

WaterwaysThe wait for the new rule is now over!  The EPA and Corps of Engineers have jointly issued the rule defining which waters are protected by the federal Clean Water Act, with the new rule largely reflecting historical interpretations arising from SCOTUS decisions.

Please click on this link for more in-depth information and analysis prepared by Michael Campbell from our Portland office. Stay tuned because a new waiting game has arrived as to when a challenge to this new rule will be brought (particularly likely if enforcement actions increase) and what the outcome of such a challenge will be.

LexBlog