Orange County Branch Newsletter

November 2014

Law and CE News

Hydraulic Fracturing in California: Boom to Bust?


Hydraulic fracturing or “fracking” is controversial. From attacks asserting dangerous (or at times unknown) effects to air and water quality, to the correlation of seismic activity and injection wells being investigated in Oklahoma, fracking faces an onslaught of legal moratoriums and ever-mounting regulation on the local and state level. While hydraulic fracturing continues to be widely criticized, it is undeniable that it creates jobs and injects money into an economy that has struggled to regain what was lost in 2008.  Indeed, studies estimate growth of 2.8 million jobs tied to petroleum development in California on the Monterey Shale deposit.1  The significance of these developments to the engineering field is that amid the chaos swirling around fracking that may stunt project growth in that area, there is significant opportunity on the horizon for environmental and water resource professionals.

One of the hottest topics in the fracking debate is the impact it has on groundwater. Water, and California’s lack of it, is a growing concern for everyone in the state. As the drought hits consumers through water-use penalties and lawn watering restrictions as well as entire communities where there wells are going dry, consumer awareness for any and all things “water” increases. Those who are against hydraulic fracturing in California have seized on this and have found new ways to challenge the industry that reach beyond the run-of-the-mill environmental challenges. Currently in effect is legislation that requires fracking operations to file reports with the California Department of Conservation, Division of Oil, Gas & Geothermal Resources (DOGGR). DOGGR’s “regulatory program emphasizes the wise development of oil, natural gas, and geothermal resources in the state through sound engineering practices that protect the environment, prevent pollution, and ensure public safety.”2  Thus, engineers are critical to ensuring the DOGGR requirements are met.

In addition, recent court decisions and legislative actions related to water use in California may further hinder the ability of hydraulic fracturing to increase in California. One such example of how courts have stepped in to protect California’s water resources is shown in Environmental Law Foundation, et al. v. State Water Resources Control Bd., et al. (ELF v. SWRC), Case No. 34-2010-80000583, July 14, 2014. The petitioner sought a court order to require consideration of how over-pumping of aquifers that directly feed a local river detrimentally affects the water supply before a well permit may be issued. The petitioner sought a declaration that the County of Siskiyou (near Mt. Shasta) must consider the Public Trust Doctrine when considering the issuance of well permits. The Public Trust Doctrine is a broad concept, but centers around the duty of the government to protect rivers, lakes, oceans and streams, among other things, for public use and benefit. In this recent decision, the court concluded as follows:

[T]he public trust doctrine protects navigable waterways from harm caused by groundwater extraction, and Petitioners state facts sufficient to entitle them to judgment so declaring. The court also concludes the County, as a subdivision of the State, is required to consider the public trust when it issues well drilling permits.

While this decision is not connected directly to hydraulic fracturing, it has the potential to directly affect the issuance of well and water use permits necessary for those engaged in developing land or extracting it resources. For activities like fracking, this water-wise thinking runs the risk of seriously hindering, if not halting, successful exploration and use of the recoverable fossil fuels in California.

A couple months after the court issued its ruling in ELF v. SWRC, Governor Brown and the California legislature rode the wave of enthusiasm and passed into law the Sustainable Groundwater Management Act. This provides the authority and obligation for local agencies to develop, implement, and manage a comprehensive groundwater management plan. A component of the Act will be monitoring and regulating the amount of extraction from groundwater wells.

As an added problem for the petroleum industry seeking to expand its operations in California, a study of the Monterey Shale deposit recently concluded that the amount of recoverable oil was 96% less than originally thought.3  When combined with the current political and legislative climate in California, the news that Monterey Shale is largely irretrievable through current technology may significantly stunt the growth of petroleum extraction efforts in California.

In practice, while an expected boom in work related to hydraulic fracturing exploration may in fact be a bust, consulting and planning opportunities for engineers and environmental and water resource experts should continue to flourish over the next several years as government agencies across the state seek professionals to assist with accomplishing the mandatory milestones contained within the Sustainable Groundwater Management Act. It is therefore important for engineers to be mindful of the above-mentioned developments whenever a project requires the use of or potentially impacts these natural resources.

1“Tapping California shale oil could add millions of jobs, study says” by Shan Li (March 13, 2013).

2See Department of Conservation’s website, DOGGR, http://www.conservation.ca.gov/dog/Pages/Index.aspx (October 17, 2014).

3“There’s not much usable oil in California after all,” by Matthew Phillips (May 23, 2014).

Please contact us at the Oakland, South Pasadena, Orange, or San Diego offices to discuss further.

Christian E. Bredeson, Esq.
[email protected]

Laura C. Williams, Esq.
[email protected]

Collins Collins Muir + Stewart LLP
750 The City Drive, Suite 400 | Orange, CA 92868
Phone:  (714) 823-4100 | Fax:  (714) 823-4111

Nothing contained in this article should be considered legal advice. Anyone who reads this article should consult with an attorney before acting on anything contained in this or any other article on legal matters, as facts and circumstances will vary from case to case.
 

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