A reported in a prior blog post, the Western States Petroleum Association (“WSPA”) sued the California Department of Conservation and the Division of Oil, Gas and Geothermal Resources (jointly, the “Department”) in Kern County Superior Court in January alleging that the Department’s oil field wastewater injection prohibitions violate WSPA’s members’ due process rights. On March 20, 2017, a Kern County judge sided in favor of WSPA, granting an injunction on behalf of Plaintiffs and, separately and independently, on behalf of intervenor B.E. Conway Energy, Inc. and intervenor Sentinel Peak Resources California. This means that the Department is currently barred from blanket enforcement of its Aquifer Exemption Compliance Schedule Regulations (“Regulations”).
Oil operators are required to obtain an aquifer exemption in order to inject oil field wastewater into underground aquifers, and such exempt status must be approved by the state agencies and the U.S. Environmental Protection Agency (“U.S. EPA”). Under the Regulations, operators were ordered to halt new and existing injection into aquifers that have not been approved as exempt by the U.S. EPA by February 15, 2017. Only three aquifer exemptions had been approved by U.S. EPA as of that date.
The Court declared that the Department must find that actual harm is being caused by the injection and go through a hearing process before it can issue fines or shut down operations. However, the Minute Order states that the injunction is not intended to:
- Enjoin the Department’s Public Resources Code procedures otherwise in effect, nor to
- Prohibit any communications by the Department with any Operator, nor to
- Prohibit the continued processing by the Department of paperwork relating to EPA exemption applications.
A case management conference is currently scheduled for July 18, 2017 in this matter. Stay tuned for future updates.