Senate Bill 4 (SB 4), which was sponsored by Senator Fran Pavley and signed into law on September 20, 2013, requires state agencies to complete three main tasks in creating a comprehensive regulatory program for oil and gas well stimulation treatments: (1) adopt new temporary and permanent regulations, (2) prepare an EIR on well stimulation as conducted in California, and (3) conduct an independent scientific study. In 2014, several Public Resources Code sections added by SB 4 were amended by Senate Bill 861. The main substantive requirements of SB 4 discussed below are now found in the amended versions of Public Resources Code sections 3160 and 3161.

On the regulatory track, SB 4 required the Department of Conservation and its Division of Oil, Gas, and Geothermal Resources (DOGGR) to propose and adopt new permanent regulations specifically addressing well stimulation treatments such as hydraulic fracturing and acid matrix stimulation. The proposed regulations and subsequent revisions were available for public comment during three separate periods between November 2013 and October 2014. The Office of Administrative Law approved the finalized  permanent regulations on December 30, 2014, but they will not take effect until July 1, 2015 pursuant to Public Resources Code section 3161, subdivision (a). At that time, numerous sections will be added to title 14 of the California Code of Regulations, which require operators conducting well stimulation treatments to, among other things:

• Evaluate the well and surrounding area to ensure the integrity of the well and the geologic and hydrologic isolation of the oil and gas formation during and following well stimulation treatment (sections 1782, 1783, 1783.1, 1784, 1784.1, 1784.2, 1785, 1787);
• Monitor for seismic activity in the area during and after hydraulic fracturing (section 1785.1);
• Provide notice to neighboring land owners and tenants of an approved well stimulation permit and notice of those parties’ opportunities for water sampling and testing (section 1783.2, 1783.3).

Because the prescribed rulemaking process that allows for public comment and multiple revisions takes longer than a year, SB 4 required DOGGR to implement interim emergency regulations, which will remain in effect until July 1, 2015 when the final permanent regulations go into effect.

On the CEQA track, SB 4 requires DOGGR to prepare an EIR in order to study potential environmental impacts from well stimulation treatments. The Draft EIR, in an effort to supplement the proposed regulations, includes mitigation measures that can be applied as needed to different well stimulation permit applications in different regions. On January 14th, the Department of Conservation and DOGGR published a Draft EIR titled “Analysis of Oil and Gas Well Stimulation Treatments in California.”

As directed by Public Resources Code section 3161, the EIR analyzes potential impacts of hydraulic fracturing and other well stimulation treatments, though not all oil and gas recovery operations, throughout the state of California. Though not expressly required by statute, the “Project” analyzed in the EIR includes implementation of Water Recycling Standards, Habitat Protection Standards, Surface Water Protection Standards, and Groundwater Protection Standards. On top of these protective standards, the EIR proposes a plethora of mitigation measures for potentially significant impacts. The EIR also includes comparative analysis of six alternatives, including a No Future Well Stimulation Treatment Alternative and an Active Fault Zone Restrictions Alternative. The public is invited to review and submit written comment on the Draft EIR from January 14, 2015, till March 16, 2015. During the comment period, interested parties can also attend six public comment meetings throughout the state to provide verbal and written comments on the Draft EIR. SB 4 requires the Department of Conservation and DOGGR to certify a Final EIR by July 1, 2015.

Kern County, where a majority of the state’s well stimulation activity will likely occur, is in the process of preparing its own EIR on oil and gas exploration, extraction, operations, and production activities in unincorporated Kern County. In particular, the County’s EIR will study potential impacts from proposed amendments to the County’s Zoning Ordinance, Title 19, Chapter 19.98 (Oil and Gas Production). This EIR will address well stimulation treatments as one of several oil and gas exploration activities. Although there is no official release date for Kern County’s Draft EIR, it will likely be made available to the public in the first half of 2015.

Finally, SB 4 balances the regulatory and CEQA efforts with an independent scientific assessment of well stimulation. The California Natural Resources Agency commissioned the California Council on Science and Technology (CCST) and Lawrence Berkeley National Laboratory (Berkeley Lab) to conduct an independent scientific assessment of well stimulation in California. An interdisciplinary steering committee oversees the study, with Dr. Jane C.S. Long serving as the science lead and the Berkeley Lab serving as the primary research institution supporting CCST in the scientific assessment. The final report will undergo vigorous peer review.

On January 14, 2015, CCST released Volume I of the study to the public. Volume I is titled “An Independent Scientific Assessment of Well Stimulation Technologies in California: Well Stimulation Technologies and their Past, Present, and Potential Future Use in California.” As the first of three volumes, it describes well stimulation treatments; how they are generally conducted and how they are practiced in California; and where they have been and are being used for oil and gas production in the state. Volumes II and III will be released in July 2015. Volume II will assess potential impacts to water, air quality, greenhouse gas emissions, induced seismicity, biological resources, traffic, and noise. Volume III will present case studies to assess specific geographic regions.

Implications

When New York Governor Andrew Cuomo and his administration announced on December 17, 2014, that his state will soon adopt a complete ban on High-Volume Hydraulic Fracturing (HVHF) as a well stimulation technique in New York, activists called for California to adopt a similar statewide ban. The information in DOGGR’s Draft EIR makes clear that the picture is not so black and white. First, the Governor cannot single-handedly ban an activity that is currently allowed under applicable statutes. Second, how hydraulic fracturing and well stimulations are conducted varies from state to state, depending on local geologic attributes. For example, the Marcellus Shale in New York is significantly different from California’s Monterey Shale, which poses geologic challenges that led to the federal  Energy Information Administration dramatically reducing its estimates of recoverable oil in the Monterey Shale from much higher 2012 estimates. Finally, the New York Department of Health’s conclusions about significant public health concerns relating to HVHF in New York cannot be broadly applied to hydraulic fracturing activities in other states. Each state, including California, will need to evaluate how well stimulation is conducted within the state and the adequacy of state regulations and permit conditions to address public health and environmental concerns. The requirements in SB 4 ensure that this evaluation in California will be thorough. Thus, prudent and concerned members of the public should engage in the public review process provided by CEQA to strengthen the protective measures proposed in DOGGR’s EIR.