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California Fines 30 Oil/Gas Operators For Lack of Water Reports

California regulators on Thursday issued civil penalties of $4,500 each to 30 oil/gas operators that failed to report water use data required under a state law (SB 1281) passed last year. More fines are expected.

Under SB 1281, about 250 separate pieces of data on water used in producing oil, including the source, treatment and its ultimate disposition, are required on a quarterly and well-by-well basis, officials in the state’s Division of Oil, Gas and Geothermal Resources (DOGGR) said. The initial set of data was released in mid-August.

"Operators who fail to meet subsequent reporting deadlines after being fined may be subject to larger civil penalties," a DOGGR spokesperson said.

In response to a question from NGI's Shale Daily about whether this was just the initial round, and if there will be more fines, the DOGGR spokesperson said, "I would call that a fair statement."

The fines come a week after DOGGR head and state Oil/Gas Supervisor Steve Bohlen announced a reorganization of his agency, saying it marked the beginning of expanded regulation of exploration/production activities (see Shale Daily, Aug. 26).

Bohlen's top-to-bottom reorganization, replacing nine district offices with four broader regional offices, is supposed to give DOGGR more boots on the ground to oversee oil and gas activities as it works to implement well stimulation rules and step up oversight of underground injection control wells (see Shale Daily, July 21).

While most of the state's oil/gas operators "made an attempt" to fulfill the water data reporting requirements, Bohlen said DOGGR has fined operators "who made no effort to comply with the law.

"We have made it clear that -- given severe drought conditions -- knowledge of how water is used and treated is vital," he said. "Additional fines for other reporting-related infractions likely will come soon."

Bohlen added that the state is more interested in getting the operators' water data than collecting money from fines. He said all 433 operators in the state were required to report under the new law, and 329 attempted to do so. The initial data release included reports from only 242 operators.

Nearly 25% of the operators filed incomplete data or data in an incompatible format, and DOGGR is working with each of those organizations to "correct and evaluate their reports," the spokesperson said.

Last year, California produced 205 million bbl of oil with 3.3 billion bbl of accompanying water. Under SB 1281, the owners of any well must file with the state oil/gas supervisor a monthly statement that provides certain information relating to the wells, including what disposition was made of the water produced from each well.

"The law provides that a person who fails to comply with specific laws relating to the regulation of oil or gas operations, including failing to furnish a report or record, is guilty of a misdemeanor," the DOGGR spokesperson said.

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