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.

"Pattern and Practice" Lawsuit Challenges State’s CEQA Compliance in Permitting Fracking

The oil and gas industry’s increased use of hydraulic fracturing or “fracking” continues to gain attention in California.  Several non-profit organizations recently filed a lawsuit against the California Department of Conservation, Division of Oil, Gas and Geothermal Resources (“DOGGR”) seeking declaratory relief that the Department is violating the California Environmental Quality Act (“CEQA”) in the permitting of oil and gas wells, by failing to consider the environmental impacts of oil and gas development, including the effects of fracking. (Center for Biological Diversity et. al. v. Cal. Dept. of Conservation, Div. of Oil, Gas and Geothermal Resources [Super. Ct. Alameda County, Case No. RG12652054].) The complaint also seeks injunctive relief, to enjoin DOGGR from approving any further permits for oil and gas wells where fracking may occur.

Rather than challenge any specific permit, the complaint raises a fairly novel "pattern and practice" claim, alleging that over a dozen of DOGGR's past permitting actions violated the mandates of CEQA. However, the complaint admits DOGGR prepared and filed CEQA Notices of Exemption or Negative Declarations for each such permit. The normal method to challenge CEQA compliance for any of these actions would have been for these groups to file suit 30 or 35 days after DOGGR took the permitting action and filed notice of such. Accordingly, another reason this case bears watching is to see how this novel "pattern and practice" claim is resolved.

By stipulation, the parties agreed to an extension of the time for DOGGR to respond to the complaint. The DOGGR now has until December 17, 2012, to respond to the complaint.

For additional information regarding this case, visit the court’s website, then enter case number RG12652054 under the "Case Summary" page.