California Gov. Gavin Newsom has fired the state's chief oil and natural gas regulator for allegedly approving increased drilling permits, some to companies in which key staff members own stock.
Newsom's chief of staff on Thursday asked Natural Resources Secretary Wade Crowfoot to fire Division of Oil, Gas and Geothermal Resources (DOGGR) chief Ken Harris, who has led the unit since 2015.
Harris’ ouster followed reports of conflicts of interest by two consumer activist groups. The governor also expressed concerns about DOGGR approving too many "well stimulation" permits, which use hydraulic fracturing (fracking) in unconventional drilling.
Consumer Watchdog and FracTracker Alliance claimed that seven engineer/managers working for Harris at DOGGR hold stock in oil and gas operators for which drilling permits have been approved at an increased pace.
DOGGR Deputy Director David Gutierrez was listed as holding up to $100,000 in ExxonMobil Corp. stock when the state unit this year approved 448 drilling permits for a California-based joint venture of ExxonMobil and a unit of Royal Dutch Shell plc, AERA Energy LLC.
Supervising engineer Thomas Goeres is said to hold up to $100,000 of Chevron Corp. stock and up to $10,000 in ExxonMobil. To date this year, Chevron has received approvals for 616 new well and rework drilling permits, according to reports.
In an email to Crowfoot, Newsome said all DOGGR employees and contractors owning oil and gas stocks should be recused from all permitting decisions until each individual submits to a conflict-of-interest review. The email also asked for a "continued investigation" of the alleged conflicts.
"The governor is taking these actions since learning that well stimulation (fracking) permits have increased without his knowledge this year," Chief of Staff Ann O'Leary said. "The governor has long held concerns about fracking and its impact on Californians and our environment, and he knows that ultimately California and its global partners will need to transition away from oil and gas extraction."
Crowfoot plans to work toward providing DOGGR leadership that shares the governor's outlook, O'Leary said. Harris, a state licensed professional geologist, formerly worked for the California Water Resources Control Board before then-Gov. Jerry Brown named him to head DOGGR and operate as the state's oil and gas supervisor.
FracTracker calculated that since Newsom took office in January, DOGGR has issued 2,365 drilling permits with AERA having the second highest total behind Chevron. There has allegedly been a 35.3% increase in new drilling permits, and a 28.3% increase in permits for reworking existing wells.
Under California's Political Reform Act, individuals in decision-making positions in state and local government agencies must disclose investments in companies that would be impacted by their decisions.
DOGGR lists 58 of its 366 positions that require this disclosure. According to FracTracker, 15 people indicated they had investments in oil and gas companies.