California Department of Conservation Issues Notice of Proposed Regulations Regarding Hydraulic Fracturing

On November 15, 2013 the California Department of Conservation issued notice of proposed regulations regarding the use of well stimulation in oil and gas production. Well stimulation is a short term and non-continual process designed to enhance oil and gas production or recovery, and includes hydraulic fracturing, which is sometimes referred to as "fracking." Hydraulic fracturing is the high-pressure injection of a mix of fluids and proppants, used to fracture the rock of oil or gas reservoirs.   

The proposed regulations require the following:

1. Application for Permit: prior to commencing any well stimulation treatment, a well operator must submit an application to the Division of Oil, Gas, and Geothermal Resources (DOGGR) with information regarding the proposed treatment. The application must provide, among other information, a water management plan with an estimate of the amount and source of the water to be used in the treatment, as well as the anticipated disposal method for any recovered water in the flowback fluid. The application must also identify the names and estimated concentrations of the stimulation fluids that will be used in the treatment.
2. Permit: a well operator must obtain a valid permit from DOGGR prior to commencing any well stimulation treatment.
3. Notice to Nearby Landowners: a well operator must provide at least 30-day notice to adjacent landowners, with a copy of the well stimulation permit and notice of the availability of water sampling and testing of well water or surface water.
4. Evaluation of Geologic & Hydrologic Isolation: a well operator must perform an evaluation of the cement outside of the production casing and an evaluation of the well stimulation treatment area of influence, to ensure the geologic and hydrologic isolation of the oil and gas formation. These evaluations must be submitted as part of the permit application.
5. Pressure Testing: not more than 24 hours prior to commencing the well stimulation treatment, a well operator must perform pressure testing of the casing and tubing that will be utilized at a pressure equal to 125% of the pressure anticipated during the well stimulation treatment.
6. Monitoring: a well operator must continuously monitor several parameters during and after the well stimulation treatment.
7. Storage & Handling of Fluids: well stimulation treatment fluids must be stored in containers, in compliance with secondary containment requirements.
8. Public Disclosures: within 60 days after the cessation of a well stimulation treatment, an operator must post specified information to the Chemical Disclosure Registry, including the source, volume, composition and disposition of all water used and recovered as part of the well stimulation treatment.
9. Post-Treatment Report: within 60 days after the cessation of a well stimulation treatment, the well operator must submit a report to DOGGR describing the results of the treatment and how the treatment differs from what was anticipated in the well stimulation treatment design.

The deadline for submitting comments regarding the proposed regulations is 5:00 p.m. on January 14, 2014. For more information regarding the proposed regulations, please visit the DOGGR webpage.

Appellate Court Holds That Regional Water Quality Control Board Approval Of Discharge Permit For Dairies Fails To Satisfy Anti-degradation Policy

In a decision filed on November 6, 2012, the Third District Court of Appeal held that the Central Valley Regional Water Quality Control Board (“Regional Water Board”) failed to comply with the State’s anti-degradation policy in issuing a waste discharge order regulating approximately 1,600 dairies.  In Asociacion de Gente Unida Agua v. Central Valley Regional Water Quality Control Board (Case No. C066410), the court held that the State’s anti-degradation policy (State Water Resources Control Board Resolution No. 68-16) applied to the waste discharge order (“Order”), because it allowed ongoing dairy discharges that might degrade high quality groundwater.  Although the Order made certain findings with respect to anti-degradation policy compliance, the court held that such findings were not supported by substantial evidence in the administrative record.  The court also held that the record failed to demonstrate that the Order would require the dairies to carry out the “best practicable treatment or control” required by the anti-degradation policy.

The appellate court remanded to the trial court with directions to grant the petition for writ of mandate and to issue a writ requiring the Regional Water Board to comply with the State’s anti-degradation policy.

For more information regarding this court decision, please contact Eric Robinson or Elizabeth Leeper or the KMTG attorney with whom you normally consult.