Even with a new comprehensive state law (SB 4) regulating oil/natural gas drilling, state and federal officials in California are taking actions to rein in potential adverse impacts, particularly threats to groundwater supplies in the drought-plagued state.

In mid-July the Division of Oil, Gas and Geothermal Resources (DOGGR) and the U.S. Environmental Protection Agency (EPA) launched a review of the state's underground injection control (UIC) program to ensure the program complied with the federal Safe Drinking Water Act (SDWA). The law was written to prevent wastewater associated with oil/gas production from being injected into aquifers with water suitable for human and agricultural use.

The review began two weeks after state regulators ordered seven oil producers to shut down 11 wastewater disposal wells in Kern County, a small percentage of the state's 1,500-plus water disposal wells.

"[We] became aware that some wells might be injecting into a nonexempt zone while reviewing documents related to implementation of SB 4, and the orders were issued after DOGGR discovered that the wastewater disposal wells appeared to be injecting into protected sources of groundwater," a DOGGR spokesperson said.

"The wells themselves are not the issue," the spokesperson said. "The issue is that there was confusion between U.S. EPA, DOGGR and producers about the status of some aquifers into which injection occurred. Some injection took place into aquifers that were not 'exempt' per U.S. EPA.

"Exempt aquifers under the Safe Drinking Water Act's UIC provisions are aquifers into which oilfield waste, such a produced water naturally associated with hydrocarbons, can be injected. We are now double-checking all injection wells to ensure that injection is not occurring into 'nonexempt' aquifers."

EPA has granted DOGGR authority under the SDWA to regulate underground injection wells related to oil and gas operations in the state. Last year, a study by the University of California, Berkeley’s energy/environmental law center suggested that there was still too much "scientific uncertainty" surrounding hydraulic fracturing’s (fracking) impact on water supplies, and because of this, regulators and operators needed to be more transparent and accountable (see Shale DailyApril 16, 2013).

California has committed to EPA that it would review and revise the UIC as necessary, said Department of Conservation Chief Deputy Director Jason Marshall, who oversees DOGGR.  Marshall noted that the UIC's primary state-federal agreement is more than 30 years old.

"There are many changes in industry practices and technology that merit inclusion in any revision of UIC regulations."

Western States Petroleum Association (WSPA) spokesman Tupper Hull told NGI’s Shale Daily on Friday that the UIC review is caused more by lack of understanding between the state and federal oversight agencies, and not by "any real environmental hazard."

"I am not aware there has been any evidence of actual contamination," Hull said. "Given the extensive regulations on both oil production and wastewater injection in California, we do not believe there is a threat to groundwater from oil/gas production. After all, we have been producing these essential resources for more than a century and have not adversely impacted groundwater to date."

WSPA said there has been a "dramatic increase" in the regulatory oversight of the industry, and thus, it is difficult to conclude in the current environment that there is a greater threat today.

Separately on Thursday, EPA assessed a $99,000 fine against the operator of a shuttered drilling site a few miles south of downtown Los Angeles north of the University of Southern California (USC) campus. Allenco Energy Inc., which leases the site in the University Park section, was given 70 days to pay the fine.

EPA completed a four-month investigation last April that resulted in Allenco agreeing to make about $700,000 in upgrades, including enclosing a 30-foot trench to prevent noxious mixtures of mostly oil and water from being exposed to the atmosphere. The site has been closed since last fall when Allenco suspended operations in the wake of pressure from the local community and federal officials (see Daily GPI,Nov. 27, 2013).

In addition, the Los Angeles city attorney has filed a lawsuit against Allenco, alleging the company "willfully disregarded" various violation notices. The city, like others in Southern California and elsewhere in the country, has explored drilling restrictions, including a ban on drilling using fracking (see Shale Daily,March 6).

The city's complaint pending in Los Angeles County Superior Court blames Allenco's operations for causing "adverse health effects on community members." Complaints from the local community about headaches, nausea and respiratory ailments caused the action by local and federal officials late last year.