Oil and natural gas operators in California face stepped up oversight in the months ahead as the Department of Conservation's Division of Oil, Gas and Geothermal Resources (DOGGR) undergoes an extensive reorganization, the head of DOGGR told NGI’s Shale Daily on Tuesday.
DOGGR Supervisor Steve Bohlen said collapsing nine field offices in four regions and giving program supervisors regulatory authority will create a more science-based and transparent organization to oversee the industry in California, the third largest oil producer in the country after Texas and North Dakota.
He said the reorganization, to be phased in over the coming months, would give DOGGR more boots on the ground to oversee oil and gas activities. The state unit also is working to implement well stimulation rules (SB 4) and step up oversight of underground injection control (UIC) wells (see Shale Daily, July 21; July 2).
Bohlen cited three "important principles" in the proposed organizational changes, which are supported by the state Resources Secretary and Gov. Jerry Brown's office:
Regulatory responsibilities are being separated into specific programs, such as well stimulation;
Regulatory performance would improve in the area of the amounts of oversight and enforcement it can carry out; and
DOGGR would embody an organization with more scientific information and knowledge about where the industry is headed, and with that better understanding adjust regulations to reflect industry shifts.
"This will enhance the division's accountability, ability to answer questions and our ability to engage in determining if our regulations are up to the challenges of the oil/gas industry in the state," Bohlen said. "Our ability to make sure the state's regulations are followed will be greatly enhanced."
The new organization ideally will be better able to be "ahead of the curve, rather than behind it as it has been at times," said Bohlen, citing hydraulic fracturing (fracking) and other well technology advances as an example. "This is an attempt to beef up regulations, improve them, and make them more focused."
DOGGR has been criticized for being too lax in its oversight of the industry. In June a federal lawsuit named, among others, Bohlen's former boss, Mark Nechodom, director of the Conservation department, and Brown for allegedly conspiring with the oil industry to allow operators to inject wastewater into aquifers during the state's four-year-old drought (see Daily GPI, June 5). Shortly thereafter, Nechodom resigned (see Daily GPI, June 9).
From the industry's viewpoint, Bohlen said operators are going to see a branch of California government that is more active. "I have discussed that with industry, and I have explained that this is in their best interest, having a strong, science-based regulatory agency that is respected," he said.
Noting that the added layer of regulatory responsibility coming with SB 4 was not the reason for the reorganization, Bohlen said it is tied a "root-cause analysis" of some of DOGGR's "failings or weakness," and the reorganization is designed to address those issues.
In the new organization, Bohlen proposes to create four large regions (northern, inland, coastal and southern) from the existing six district and three geothermal energy offices. Four program/regulatory units -- UIC, well stimulation, aquifer exemption, and idle/abandoned wells -- and four staff support units -- emerging technology/regulations, data management, environmental review, and technical training also would be created.
Bohlen called the technology unit a "small, but important unit whose job is to understand emerging technologies in the oil/gas fields, evaluate it and determine if it requires new or updated regulations.
"That will involve our engagement with industry, industry conferences, understanding what is ongoing in the academic realm, so it will really be focused on science."
Bohlen said he would go slowly in making the changes because "given the enormous challenges the division has and the challenges we are trying to respond to, doing this quickly by flipping a switch would not be prudent."