HYDRAULIC FRACTURING:

New Calif. fracking law triggers court action

A new California law on unconventional oil drilling has been cited in a court case as a reason to dismiss a lawsuit claiming the state has failed to properly police the process known as fracking.

The Western States Petroleum Association in a motion filed in California Superior Court in Alameda County last week cited provisions in S.B. 4 as the reason to throw out a case brought by the Sierra Club, the Center for Biological Diversity, Earthworks and the Environmental Working Group.

WSPA in its paperwork refers to language in the law that environmental groups protested when it was added to the bill just before passage. Green advocates at the time said they feared it might be used as a reason to allow hydraulic fracturing without oversight. In that process, companies blast chemical-laced water some 8,000 feet underground at high pressure to break apart rock formations and release oil or natural gas.

"We've always been afraid that that's how the oil industry would interpret it, and now they have," said Kathryn Phillips, executive director of Sierra Club California, which opposed S.B. 4 because it felt the measure lacked enough protections.

WSPA did not respond to several request for comment. But in the group's court filing, it said that the complaint from the environmental groups now is irrelevant.

"Since the Legislature has set forth in S.B. 4 how [the state] is required to comply with [the California Environmental Quality Act] as it relates to the practice of hydraulic fracturing, plaintiff's claim for declaratory relief is moot," WSPA said.

The green groups earlier this year filed a claim against the California Department of Conservation's Division of Oil, Gas and Geothermal Resources (DOGGR), charging that the agency allowed hydraulic fracturing without requiring necessary reviews under the California Environmental Quality Act, or CEQA, a protection law.

State law requires most developments to go through an environmental review addressing how they would affect land, water, species and other factors and ways to mitigate the damage. The oil and gas industry contends that fracking operations up until now have not been subject to CEQA. Environmental groups -- while arguing in the court that CEQA did apply to fracking -- were hopeful that S.B. 4 would resolve the question by mandating that oversight.

S.B. 4, which Gov. Jerry Brown (D) signed into law last month, requires some disclosure of chemicals used in the process and notification of residents before work starts. Groundwater testing and other oversight measures are also put in place for fracking and other well stimulation techniques, including one called acidization.

The law orders the state by July 15, 2015, to conduct an environmental impact report, or EIR, analyzing the effects of hydraulic fracturing in the state. WSPA in its filing said that language in the law releases oil and gas companies from any need to go through CEQA until that EIR is done, as long as companies meet requirements of the measure.

"Prior to the completion of the EIR, the legislation has directed DOGGR to allow hydraulic fracturing to occur," the WSPA court filing said, "subject to the operator's certification of compliance with specified requirements, without the need for CEQA review in the interim."

"Because of these changes in the law, there is no effective relief that can be ordered by the court," WSPA added.

Pavley clarifies

Sen. Fran Pavley (D), lead sponsor of the bill, declined to comment on the lawsuit actions. But in a letter she filed with the Senate after S.B. 4's passage, she said that the language allowing drilling activities to proceed while the regulations are being written is limited in scope.

"It is my intent that the existing standards of judicial review shall not be altered" by the language, Pavley wrote.

She added that the wording "is not intended to exempt existing laws, regulations and orders that may require additional review or mitigation." Further, she wrote that the language is not meant to conflict with other wording in the law stating that "this article does not relieve the division or any other agency from complying with any other provision of existing laws, regulations, and orders."

But the Brown administration's DOGGR, which will be writing the rules outlined in S.B. 4, has filed court papers concurring with WSPA.

The state agency in its filing said that the new law "provides that until the new regulations are in place, ministerial well permits shall be issued based on written certification from an owner or operator demonstrating compliance with specified portions of S.B. 4.

"The regulatory framework adopted in S.B. 4, including new provisions for well stimulation permits and for environmental review, render plaintiff's claims regarding the Department's alleged past pattern and practices for environmental review of hydraulic fracturing moot," DOGGR said in its filing.

A DOGGR spokesman said that the agency does not comment on pending litigation.

Environmental groups disagree that S.B. 4 eliminates the need for CEQA for the next 18 months. The state Legislature when it intends to exempt projects from CEQA does so in a very specific way, adding language to the state code specifying the development where the protection law won't apply, said George Torgun, attorney at Earthjustice.

"There's nothing like that in S.B. 4," Torgun said. "What WSPA's motion is based on is some really ambiguous language."

"I can't see that a court is going to find that this constitutes an exemption," he added.

The WSPA case in part refers to language that came in amendments added to S.B. 4 in the hours just before it passed the state Assembly. Those late provisions outraged environmental groups, many of which withdrew their support for the bill because of the additions (EnergyWire, Sept. 12).

Four green groups that had led the advocacy for the bill -- the Natural Resources Defense Council (NRDC), the Environmental Working Group, the California League of Conservation Voters and Clean Water Action -- found the late amendments unacceptable. Some green groups at the time said that the language limits the reach of CEQA.

People familiar with the politics of the bill said that the late amendments arrived as oil lobbyists were offering language that would have struck the word "permit" in the bill and replaced it with the word "notice." Deleting "permit," legislative aides said, would have created a CEQA exemption, because the permit requirement is what triggers the law and its requirement for a state environmental impact report.

WSPA has not responded to questions about whether a deal was struck to substitute the amendments for the requested language.

Green groups at the time the amendments were added said that they put in place a roughly 15-month grace period during which oil companies will be able to secure permits for fracking and well stimulation without going through CEQA.

"The amendments took a bill that didn't go far enough to protect Californians from fracking to one that actually gave away existing protections to oil companies," Kassie Siegel, senior counsel at the Center for Biological Diversity, said after the amendments were added. "Between now and 2015, Californians have less protections from fracking than current law provides."

Torgun, however, said there is other language in S.B. 4 that points to CEQA remaining in place. He cited the same section as Pavley in her letter, that the measure says that it does not exempt any state agency from complying with other state laws. That includes CEQA, he said.

"There's really nothing here that states that fracking should be exempt from CEQA while the whole regulatory process takes effect over the next couple of years," Torgun said.

Brown backs law as protective

Meanwhile, Brown on Monday, speaking at an event announcing the state joining with Oregon, Washington state and British Columbia on climate action (ClimateWire, Oct. 29), said that the state's moves on fracking are appropriate. Protesters outside the building in San Francisco urged a ban on hydraulic fracturing.

"I signed legislation that will create the most comprehensive environmental analysis of fracking to date," Brown said, according to a transcript provided by his office. The environmental study on fracking's effects, he said, "will take a year, a year and a half, maybe a little longer."

He backed fracking in the meantime.

"In terms of the larger fracking question of natural gas, because of that and the lowered price, the carbon footprint of America has been reduced because of the substitution of natural gas for coal," Brown said. "So this is a complicated equation, and you can be sure that California is doing everything it can to reduce greenhouse gases and support a sustainable economy."

The study, he said, will look at whether there is ground or water pollution.

"The big issue is the Monterey Shale, and no one is talking about doing anything there for an extended period of time, and certainly not before the environmental document," Brown said. "I think we ought to give science a chance. Now, we have some folks back in Washington who don't like to give science a chance. And I think stories are good, but facts, analysis and research are better.

"And that is what our wonderful Environmental Quality Act provides," Brown added. "I know there are a lot of people who are critics of CEQA, but we are going to get the best of CEQA in our fracking environmental analysis.

"So everyone ought to be excited, critic and advocate alike, because California will provide the information that we can take this debate to the next level," Brown said.

He did not address the issue of any delay in CEQA for fracking operations until the statewide EIR is completed.

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