California got its first glimpse Friday morning of proposed hydraulic fracturing regulations that will likely be heavily debated over the coming year.
In a conference call with reporters, California Department of Conservation Director Mark Nechodom heralded a proposal he said would strike a balance between strong safeguards and ensuring that California's oil and gas industry can "remain productive and competitive."
The release of the draft rules kicks off a yearlong process, with the goal of having final regulations in place by Jan. 1, 2015. Nechodom said he anticipates "a very active public regulation" process that could yield "substantial changes" to the current proposed language.
Hydraulic fracturing, commonly known as fracking, involves blasting a pressurized cocktail of chemicals and water underground to dislodge the gas trapped in rock formations. While many have praised fracking as a way to wean America off of foreign oil, environmentalists warn that fracking represents a public health hazard.
Pointing to fracking booms in other parts of the country and warning of a potential explosion of activity above California's Monterey Shale, several lawmakers introduced fracking bills in 2013. Of those, only Sen. Fran Pavley's bill received the governor's signature, with more stringent measures that included statewide moratoriums falling by the wayside.
The Pavley law will now guide the regulatory process. The draft rules released on Friday will require well operators to notify people living near new wells, create a groundwater monitoring regime, spur a statewide scientific review of fracking and mandate disclosure of the types and concentrations of chemicals used in fracking.
Despite the chemical disclosure requirement, the new law allows companies to invoke trade secret protections in some cases. Nechodom said it remains unclear how broadly that exemption will be used.
"It's hard to tell at this point how many trade secret claims may be made," Nechodom said. "There may be few or there may be many."
In the intervening year before final regulations take effect, well operators will need to certify to regulators in advance that they are in compliance. Starting in 2015, they will need to go through a specific permitting process that could trigger environmental review.
Nechodom tried to rebuff concerns that well operators will have free reign in the gap year, saying that operators will still have to win California Environmental Quality Act approval via county-level applications for conditional use permits.
"That has been a misperception, that CEQA does not apply in 2014," Nechodom said, adding that "by the time we get to 2015 that permitting event will essentially require some CEQA review."
In the final days of the 2013 legislative session, environmental groups abandoned Pavley's bill en masse, with many saying that a provision of the bill allowing for broad reviews that cover multiple wells would weaken oversight. Regulations governing the grouping of permits were not released Friday.
But Tim Kustic, state oil and gas supervisor for the Division of Oil, Gas, and Geothermal Resources, said during Friday's conference call that the division already has to be selective in the reviews it conducts.
"We have to prioritize," Kustic said, adding that "fields that have extensive hydraulic fracturing and they're doing, say, the 3,000th in the field" will be a lower priority than an initial exploratory well.
"It's unrealistic to think the division will be out there for every well stimulation," Kustic said.