State continues oil crackdown, puts halt on fracking permits

California Gov. Gavin Newsom cracked down on oil producers Tuesday, halting approval of hundreds of fracking permits until independent scientists can review them, while temporarily banning another drilling method that regulators believe is linked to one of the largest spills in state history.

The state Division of Oil, Gas and Geothermal Resources announced it will not approve new wells that use high-pressure steam to extract oil from underground. It’s the type of process Chevron used at an oil field near McKittrick that leaked more than 1.3 million gallons (4.9 million liters) of oil and water this summer.

That process is different from fracking, which uses water and other chemicals at high pressure to extract oil. California has 263 pending fracking permits but has not approved any of them since July. That’s when Newsom fired California’s top oil and gas regulator after learning the state had increased fracking permits by 35 percent since he took office in January, angering environmental groups.

Newsom, a Democrat, called the crackdown necessary to strengthen the state’s oversight of oil and gas extraction “as we phase out our dependence on fossil fuels and focus on clean energy sources.”

“This transition cannot happen overnight; it must advance in a deliberate way to protect people, our environment and our economy,” Newsom said.

While conservation groups praised the state’s new initiatives, some members of the oil industry called the changes “disappointing.”

Western States Petroleum Association said California’s environmental regulations already lead the world.

“Every barrel delayed or not produced in this state will only increase imports from more costly foreign sources that do not share our environmental safety standards,” group president Catherine Reheis-Boyd.

The new changes will inordinately impact Kern County, where 78 percent of the state’s active wells are located the Kern Economic Development Corporation reported in 2017.

“The bulk of Kern County’s new oil production will be severely impacted by this policy, as well as future capital investment by the producers,” State Sen. Shannon Grove said in a statement. “If those producers cannot confidently invest in this area, then they will invest elsewhere. The reduction in capital investment will be in the hundreds of millions of dollars in the next twelve months.”

Local oil producer Chad Hathaway said the rule changes were the result of “Big Environmental” gaining the ear of the legislature. He defended high-pressure steam oil extraction, which he said had been going on safely for decades.

“If you think about how much oil has been produced by thermal recovery and the amounts of accidents that have happened over the course of 60 years, our safety record has blown other people out of the water,” he said.

The state’s moratorium will be in place while two national laboratories — Lawrence Livermore and Sandia — study the high-pressure steam process to see what regulations, if any, can make it safer. Other wells in California use the steam method and have not had any spills.

“These oil leaks cannot be the cost of doing business,” California Natural Resources Secretary Wade Crowfoot said. “There needs to be a clear trajectory to eliminate them. Not reduce them in number, but fully eliminate them.”

The moratorium will not affect existing wells, which will be assessed individually. Some existing wells have been using high-pressure steam for so long that stopping it could weaken the geology and cause more spills, Crowfoot said.

Officials said they would seek an independent audit of California’s permitting process for fracking and other types of oil extraction.

In July, advocacy groups Consumer Watchdog and FracTracker revealed the state’s fracking permits had doubled during the first six months of Newsom’s administration. The groups said that of those permits, 45 percent benefited companies where state officials owned stock.

Gordon Nipp, vice-chair of the Kern-Kaweah chapter of the Sierra Club, warned Kern County that the state’s regulations could just be the first step in a gradual abandonment of oil.

“Whether it’s these regulations or more regulations coming down the pipe, science says that we have to transition away form the use of fossil fuels if we care at all about leaving a livable planet for the next generations,” he said. “We all ought to be thinking about this and figuring out what we’re going to do about it.”