Projects

Oil and Gas Well Stimulation Treatments in California

Background: In 2015, TGG was retained by Natural Resources Defense Council (NRDC), on behalf of a coalition of environmental groups (NRDC, Center for Biological Diversity (CBD), Sierra Club, Los Angeles Waterkeeper) (“the Coalition”). The Coalition was concerned about the environmental and health impacts of oil production in California using newer well stimulation technologies (including fracking). Well stimulation treatment (WST) refers to processes to increase the production of a well by stimulating the flow of oil and/or gas.

California has been a major oil and gas producer for over a century. As mandated by 2013 legislation, the State of California was establishing a comprehensive regulatory program for WST. The State was also required to prepare an Environmental Impact Report (EIR) for WST. In January 2015, the California Department of Conservation, through its Division of Oil, Gas and Geothermal Resources (DOGGR), issued the Draft Environmental Impact Report (DEIR) Analysis of Oil and Gas Well Stimulation Treatments in California. The DEIR evaluated the Project (Allowance of WST, broadly speaking) against Alternative 1 (No Future WST) and Alternative 2 (No Future WST Outside of Existing Oil and Gas Field Boundaries).

As mandated by 2013 legislation, the State of California was developing a comprehensive regulatory program and preparing an Environmental Impact Report (EIR) for WST. In January 2015, the California Department of Conservation, through its Division of Oil, Gas and Geothermal Resources (DOGGR), issued the Draft EIR (DEIR) Analysis of Oil and Gas Well Stimulation Treatments in California.

TGG’s Comments on the DEIR: TGG prepared Expert Comments on the DEIR to the California Department of Conservation (incorporated with the Comments of the Coalition) related to three specific areas of impacts for each alternative:

  1. California crude production and supply
  2. Greenhouse gas emissions
  3. Air quality.

TGG analyzed a number of serious flaws in the DEIR related to each of these impacts:

  1. The DEIR likely overstated the impact of a reduction in well stimulation on statewide crude production and supply, especially in the near term.
  2. The DEIR substantially understated direct GHGs from well stimulation treatments. The DEIR also substantially understated GHGs for crude supply from California production enabled by well stimulation, while overstating emissions for alternative crude supply from production outside California.
  3. The DEIR understated adverse air quality impacts for the Project and overstated adverse impacts for Alternative 1 (and 2). Thus, the DEIR consideration of air quality impacts was incomplete and unbalanced.

The DEIR’s flawed analysis justified its finding that the Project (allowance of WST) was the environmentally preferable alternative. Conversely, TGG found that the DEIR had not provided a sound basis for decision-making in regard to air quality (nor, more broadly, in terms of the Project and Alternatives). Furthermore, TGG concluded the DEIR had not provided a sound basis for the selection of the Project as the environmentally preferable alternative.

Update: In July 2015, the Final EIR was approved. Operators could perform WST subject to regulatory requirements related to operational transparency, reporting, neighbor notification and engineering review. A permit system was put in place requiring operators to submit a permit application prior to performing WST.  Since WST regulation was approved, legal challenges to WST, and particularly to fracking, have been ongoing in California at the local, state and regional levels. The Trump administration’s plans to auction oil and gas leases, allowing fracking on federal lands in California, have met with widespread opposition from environmentalists and State officials, including Governor Gavin Newsom and Attorney General Xavier Bercerra. In January 2020, the State filed a federal lawsuit against the Bureau of Land Management to block these plans.

In November 2019, Governor Newsom imposed new regulations on fracking and a moratorium on steam-injected oil-drilling. New permits for fracking are now subject to a scientific review by third party experts and audited by state finance officials. This stricter oversight followed a major and extended oil and water spill at a Chevron site in Kern County that used these controversial WST technologies. Starting in May 2019, the initial spill was approximately 1.3 million gallons followed by a number of smaller spills of oily water possibly totaling another million gallons or more. The moratorium ended in April 2020.

In September 2020, Governor Newsom signed an executive order to end the issuance of permits of new hydraulic fracking by 2024. As of late 2020, 66 WST permits had been issued by CalGEM for hydraulic fracking in 2020, a significant decline from 2019. (CalGEM, formerly the DOGGR, is charged with the oversight of WST in California.) CalGEM reported that WST permits and hydraulic fracking production in California were at their lowest levels since 2014, when WST regulation was introduced. On December 10, 2020, the Trump Adminstration opened up bidding for oil and gas leases on federal lands in California, despite certain legal challenges and opposition from the incoming Biden Administration. The auction netted only $46,000 on 4,100 acres, equivalent to a very low average price per acre of $11.

During the 2020 election campaign, President Biden pledged to stop new oil and gas leases on federal lands and waters. On January 27, 2021, President Biden issued an executive order to pause new oil and gas leases on federal lands and waters, pending a review of the climate impacts of drilling on these lands and waters.

On March 9, the Biden administration began its comprehensive review of the federal program for selling oil and gas leases on federal lands. After a public comment period which ended April 15, the Department of the Interior will publish an interim analysis with recommended changes this summer. Although the federal government has emphasized that the leasing pause is temporary, it could take years to implement substantive changes. The review could have significant impacts of energy development on federal lands.

On March 15, 2021, Deb Haaland was confirmed as the secretary of the Interior, becoming the first Native American Cabinet secretary. Rep. Haaland is an environmental activist who has opposed fossil fuel drilling and pipelines. She is charged with the review of climate impacts of drilling on federal lands and waters, as well the potential enactment of ban on future fracking leases on these lands. Secretary Haaland is expected to reverse the agency’s mission under the Trump Administration. Since taking office, Ms Haaland has stated that the federal leasing program is “fundamentally broken” and that changes could be needed to address climate impacts and ensure that American taxpayers get a fair return on the leases.