Mike Rogge

Oil industry under attack

By Mike Rogge

Capitol Update, May 15, 2015 Share this on FacebookTweet thisEmail this to a friend

Last year, we saw approximately 20 bills introduced attempting to curtail or cease fracking operations for California oil. By the end of that session, only one bill emerged, SB 4 by Senator Fran Pavley (D-Agoura Hills) which provided direction to the Department of Conservation’s Division of Oil, Gas and Geothermal Resources (DOGGR) to assure their oversight was sufficient to protect the environment.

California is the third largest producer of oil in the United States, supporting hundreds of thousands of jobs and billions in state and local tax revenues. Despite the fact that California has the most stringent oversight and regulation in the country, those who oppose oil production have undertaken new tactics in their ongoing efforts to hinder or stop production.

This year has seen the introduction of a number of additional bills sponsored by environmental groups to hamper oil and gas production and exploration. Three of those bills are directly aimed at the oil industry’s practice of injecting wastewater from their operations back into aquifers that do not meet drinking water standards. Collectively, these bills would shutdown significant oil production in California.

SB 248 by Senator Pavley puts oil production at risk by imposing vague but extensive new requirements on the Underground Injection Control (UIC) program that are inconsistent with federal drinking water protections. The bill requires existing wells be brought into compliance with these new requirements without clearly stating what happens if DOGGR cannot meet them. This creates uncertainty as to when, or whether or not, production will be able to continue if these new, unnecessary requirements are not met.

AB 356 by Assembly Member Das Williams (D-Santa Barbara) requires a duplicative and extensive groundwater monitoring plan for California’s injection wells. This bill ignoresstringent state and federalregulations already in place to protect groundwater resources. The State Water Resources Control Board and regional water quality control boards already require permits and provide oversight for oil operations, and the UIC program ensures that injection wells are not operating in areas that are or could become sources of protected water. AB 356 will only serve to cause significant delays, making this bill an effective ban on production, without providing additional protections for groundwater.

SB 454 by Senator Ben Allen (D-Santa Monica) prohibits injection wells from operating in areas that the U.S. EPA has found to be safe and appropriate to use for these wells. Current federal law ensures that sources of drinking water are protected from contamination. SB 454 would not enhance protections for drinking water, but would prohibit the use of injection wells, thereby shutting down production.

DOGGR has received severe criticism in the last year and a half and much of it justly deserved, but their new management has been striving to correct their previous shortcomings. They are due to release a comprehensive report to the U.S. EPA before the end of the month which will detail the corrective actions they have taken or have planned. These bills appear premature in light of that release.

While the State has voiced the opinion that there needs to be movement away from fossil fuels, it is premature to shutdown the oil production before we have viable alternatives operating. The more oil we produce in- state, the less we have to rely on foreign and out-of-state oil to meet our energy needs.

Manufacturers in California already face a70 percent energy cost disadvantage compared to the U.S. average. We also greatly depend on oil and gas to transport raw materials to our facilities and ship finished goods out. Any reduction in oil capacity increases the cost of doing business and makes our manufacturers less competitive with their counterparts in other states and other countries.

CMTA believes that the environment and our water supply need to be protected, but we have confidence that DOGGR will implement steps which will satisfy that requirement and keep California competitive without impacting oil operations. CMTA is opposing SB 248, AB 356 and SB 454.

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