In November 2019, the Geologic Energy Management Division (CalGEM) requested a third-party scientific review of pending well stimulation permit applications to ensure the state's technical standards for public health, safety, and environmental protection are met prior to approval of each permit. Experts at the Lawrence Livermore National Laboratory (LLNL) are in the process of assessing CalGEM's permit review process. LLNL experts are also evaluating the completeness of operators' application materials and CalGEM's engineering and geologic analyses' processes and adherence to California Code of Regulations.
The Newsom administration prioritized strengthening regulatory oversight of oil and gas production in California. In addition to LLNL's reviews, the Department of Finance Office of Audits and Evaluation (OSAE) has completed a broader audit of CalGEM's permitting process for well stimulation and underground injection control (UIC.)
The audit complements LLNL's work and validates many of CalGEM's revised practices and process improvements, several of which have already been implemented. CalGEM will submit a Corrective Action Plan early in 2021, as required by OSAE, that will detail how CalGEM has implemented, or is working to implement, the audit's constructive recommendations.
LLNL's scientific review of the permit applications and process found that the permitting process met statutory and regulatory requirements. LLNL found, however, that CalGEM could improve its evaluation of the technical models used in the permit approval process. As a result, CalGEM now requires all operators to provide an Axial Dimensional Stimulation Area Narrative Report for each oilfield and fracture interval which must be validated by LLNL and conform to the new CalGEM permitting process. This will improve CalGEM's ability to independently validate applicants' fracture modeling.
As noted, current state law allows for hydraulic fracturing and other forms of well stimulation. Senate Bill (SB) 4 (Pavley, 2013) established stringent public health, safety and environmental criteria that have been widely described as among the strongest safeguards in the nation.
- Extensive engineering and geologic review and well integrity evaluations in order to ensure that WSTs are confined to the intended geologic zone.
- Neighboring parties must receive advance notification of projects and can request that their water quality be tested to establish a baseline.
- Comprehensive post-stimulation reports must be filed, including the amount of water used and the source of that water.
- Seismic monitoring must take place during well stimulation operations. If a magnitude 2.7 or larger earthquake occurs nearby, the project must halt while an evaluation is conducted by CalGEM and the California Geological Survey.
Key Figures to Date (as of February 9, 2021):
- CalGEM has issued 11 WST permits in 2021.
- CalGEM has issued 83 WST permits in 2020 following review by LLNL.
- CalGEM has denied 57 permit applications in 2020.
WST permit approvals and resulting hydraulic fracturing activity is at its lowest level since the Legislature enacted SB 4 in 2014 to expressly permit hydraulic fracturing under the nation's strongest regulatory conditions.
By comparison, during the same time period last year (2019), approximately 220 permits were approved, an amount roughly consistent with annual permit approvals in the three years since SB 4 regulations took effect. All the permits issued in 2020 were for operations in established Kern County oil fields.