July 28, 2014 Department of Conservation 801 K Street, MS 24-02 Sacramento, CA 95814 DOGGRRegulations@conservation.ca.gov ATTN: Well Stimulation Regulations Re: Public Comments: SB 4 Well Stimulation Treatment Regulations On behalf of our hundreds of thousands of members and supporters, and the health and welfare of Californians, the undersigned organizations submit these comments on the second draft of the SB 4 Well Stimulation Treatment Regulations. We applaud the progress made by the Department of Conservation (DOC) and the Division of Oil, Gas, and Geothermal Resources (DOGGR or the Division) since the first draft was released, as this second draft is substantially improved. However, there are many key areas in which the proposed regulations fail to meet the statutory mandate under state law to prevent, as far as possible, damage to life, health, property, and natural resources. (Pub. Res. Code 3106). We urge DOC and DOGGR to go beyond the minimum requirements of SB 4, and impose a moratorium on well stimulation. Until the Environmental Impact Report (EIR) and the independent study are completed, and the science is clear on how these processes impact health and the environment, well stimulation should not continue. The state has never made the determination that fracking and other forms of well stimulation will not unreasonably threaten water supply and quality, degrade the environment, negatively impact occupational and public health, or undercut state climate change goals. The Division clearly has the authority, under SB 4 and the emergency regulatory power granted for the interim period by that statute, and under the existing power under Pub. Res. Code 3106, to implement the precautionary principle and halt well stimulation projects. In order to complete the regulations properly, all information, including the findings of the upcoming EIR and independent study, must be taken into consideration. We believe that the Division has a responsibility to impose a moratorium on all well 1
stimulation in the interim. Until it can be determined that these methods will not negatively impact Californians water, health, environment, and climate change goals, it is irresponsible to allow the continued use of well stimulation treatments. However, whether or not the Division implements a moratorium, it is critical that a regulatory program be adopted that ensures maximum protection of public health and the environment. The following pages contain our comments on the proposed regulations, addressing the positive changes and our support, the omissions and glaring gaps, and the provisions that we oppose. Evaluating the regulations compared to initial priority concerns To begin our analysis of the changes in this draft, we provide our priority concerns as stated in our letter from January 2014 (underlined), with further comments based on progress made, or lack thereof, reflected in the revised regulations. 1) Specify that full compliance with the California Environmental Quality Act (CEQA) be met through the completion of field-by-field and well-by-well environmental reviews, and affirm the statement in Pub. Res. Code 3161(4)(C) that nothing in these provisions prohibits a local lead agency from conducting its own EIR. Though we have been verbally assured by the Division that compliance with CEQA will occur under these new regulations, it is not explicitly written into the revised regulations how that compliance will be achieved. The final regulations should state clearly that all necessary CEQA analysis and determinations will occur before any well stimulation permit is issued. We also have concerns about the single project approval described in Section1751 and that section's impact on CEQA compliance. The lack of specifics about how grouping can occur, could lead to inadequate environmental review prior to issuing permits. Single project authorization should be limited to a maximum number of wells in the same field and pool/zone. DOGGR must specify other parameters that allow for grouping. The current language does not identify how or why certain wells could be grouped together. Similar geologic characterizations, proximity to water, both surface and ground, and urban and agricultural communities and other attributes must be specified as justification for grouping. 2) Specify delineation and connection of regulatory authority among all state, regional, and local agencies, as mandated under SB 4. Regulations must formalize agencies jurisdictions and duties and thereby facilitate more complete and coordinated regulatory coverage for all aspects of well stimulation. Responsible agencies must have formal agreements with other agencies before implementation. We recognize that progress is being made in developing formal agreements with other agencies named in SB 4. Additionally, we appreciate specific references to other agencies in these regulations. However until these delineations of responsibility are formalized, regulatory gaps may still exist. See comment below on air protections as an example. We 2
suggest that in order to ensure all relevant agencies' regulatory programs are followed that DOGGR not issue any well stimulation permits until the Air Resources Board, State Water Resources Control Board, and the Department of Toxics Substance Control have approved the portion of the permit that is relevant to those agencies. This scheme would ensure full compliance with all regulatory programs. The recent example of injection wells needing to be shut down despite receiving permits from DOGGR, indicate that the Division may not be up to the task of ensuring protections of natural resources and health, and that additional formal oversight from other agencies is needed. 3) Expand the scope of the regulations to cover all forms of well stimulation regardless of penetration distance from the well-bore or acid concentration. The intent of SB 4 was to regulate all forms of well stimulation per the definition in Section 3157(a); as proposed, the regulations may leave some forms of well stimulation unregulated. Provisions addressing the scope of the regulations have improved but still need greater specificity and justification for excluding certain treatments from the regulations. In the current regulations, under 1761(a)(1)(A)(i) and 1761(a)(1)(A)(ii), both fracking and acid emplacement that exceed the formation fracture gradient or uses a volume of fluid equal to or greater than the Acid Volume Threshold during their operations will be considered well stimulation unless proven to the Division s satisfaction that the procedures do not enhance oil and gas production or recovery. However, what will satisfy the Division for exclusion is not clear, and the Acid Volume Threshold itself is problematic since it is an arbitrary value. And, keeping in mind the definition of well stimulation in SB 4, volumes of acid below the threshold can still cause increased permeability in the formation. We strongly support the requirement that acid treatments, even those that do not meet the acid threshold volume, shall nevertheless be reported to DOGGR. However, the reporting of acid jobs below the threshold must include more detail in order to provide valuable information to DOGGR and the public. Information must be required on: full disclosure of chemicals emplaced in the well including types of chemicals, uses, volumes and concentrations. All of this information should be in a searchable database available to the public directly and by subscription. Failure to require such full and timely disclosure clearly violates the requirements of SB4, since section 3160(b) requires that all chemicals used in well stimulation treatments be disclosed to the public. Gravel packing must be explicitly included in the definition of well stimulation in cases where the treatment increases the permeability of the formation. The current regulations are silent on this, despite the South Coast Air Quality Management District's inclusion of gravel packing and the clear requirement in SB 4 that DOGGR must regulate all forms of well stimulation. 4) Broaden and redefine protected water to include waters of all current and potential beneficial uses, consistent with the Clean Water Act, the Safe Drinking Water Act, and the Porter-Cologne Water Quality Control Act. This was not addressed in the new regulations. Considering DOGGR s mandate to prevent damage to natural resources, this should be remedied in the final regulations. Water is 3
California s most valuable natural resource, especially now as we face one of the worst droughts on record, and should be broadly protected with the most stringent regulations possible. Protected water should include all water with current or potential beneficial uses, including water with up to 30,000 TDS, consistent with ocean water which is commonly desalinated. Recent enforcement actions by DOGGR to shut down underground injection wells highlight the need for better and more clearly understood definitions of protected water. This development shows that relying on aquifer exemptions under the federal Safe Drinking Water Act is problematic. For one, regulators have historically misinterpreted or do not know the locations and justifications for which aquifers should be exempt from protection. In order to rely on the aquifer exemptions, DOGGR must complete a thorough review of each aquifer believed to have an exemption, and make determinations that such aquifers are not and will not be sources of drinking water, and meet all criteria specified by EPA, including approval of the exempt status. Until such findings are made, aquifer exemptions are not a valid reason for excluding underground waters from protection. While the issue of aquifer exemptions extends beyond these well stimulation regulations, better protection for all underground waters from oil and gas impacts should begin in these regulations, and until those fundamental flaws are addressed, aquifer exemptions cannot be relied upon to justify lack of protection. 5) Provide air quality protections, including closed-loop gas control systems, monitoring, containment, and restrictions, on volatile organic compounds (VOCs), air toxics, and greenhouse gas emissions. The draft regulations do not provide any air quality protections. We recognize the Air Resources Board s role in developing air quality regulations, but the lack of protection for air quality and greenhouse gas emissions in these regulations show that critical gaps still exist in the regulation of well stimulation, and prove even further the need for a moratorium until these protections are in place. DOGGR has the authority under Public Resources Code 3106 to implement regulations that will protect Californians health, including: monitoring air quality; limiting emissions that threaten health and the environment; and requiring infrastructure that will prevent the leakage of harmful gases, such as methane. If DOGGR does not develop its own air pollution control requirements, then it should not approve any permit application that the Air Resource Board has not also reviewed and approved as adequate for protection of air quality and climate. 6) Because of potential increased volumes of wastewater due to unconventional drilling methods, the Division should examine the current methods of produced water and flowback disposal, and strengthen all related regulatory programs to ensure protection of surface and groundwater resources and reduce the risk of induced seismicity. We strongly support the improvements that strengthen the reporting of the composition, source, and disposal of water involved in well stimulation treatments. However, we believe that these regulations should go further and call for the requirement of closed-loop systems for waste handling and disposal, as well as mandate a prohibition on 4
the use of unlined pits in any field where well stimulation occurs. Current language, which only requires flowback and produced water reporting 60 days after stimulation, does not ensure that unlined pits will not be used for disposal at a later date. While the use of unlined pits for any oil and gas waste should be prohibited, in the scope of these regulations, applying the prohibition to all produced water from fields where well stimulation occurs is the only way to ensure flowback that includes well stimulation fluids does not end up being disposed of into unlined pits. We support the changes to Section 1786(a)(8) which remove the exemption for produced water that will be injected into Class II from hazardous waste testing. This section requires operators to determine whether their waste is hazardous, and if so, to properly manage it in accordance with relevant state laws. We support this change in the regulations as it brings a portion, albeit limited in scope to only stimulated wells, of oil production activities in line with standards for hazardous waste handling that other industries must follow in order to protect public health and the environment. This section, however must be strengthened to include checks and balances to ensure compliance with testing and proper disposal for hazardous waste. The current language relies entirely on self monitoring and testing without any accountability or involvement from the DOGGR or DTSC until an operator has made a determination about the characteristics of their waste. 7) Eliminate injection of dangerous chemicals, and promote the use of food-grade and other benign additives, including a prohibition on the injection of any distillate hydrocarbon, BTEX, and other hydrocarbons. The Division has thus far disregarded our requests to limit the types of chemicals used in well stimulation treatments. The down-hole regulations do not eliminate risk of leakage and do not address surface spills that may occur in communities during transport, use or disposal. Therefore, the Division should prohibit the injection of hazardous and health threatening chemicals. Additionally, the Division should prohibit the injection of any chemical for which there are no standard water and air testing protocols. Allowing the use of chemicals that may not be detectable is unacceptable and does not follow the mandate of transparency, and potentially threatens public health, and water and air quality. 8) Require microseismic monitoring to establish baseline ground movement, and monitor seismic activity and post-stimulation seismicity in the surrounding area. While we support the Division s intent to develop rules to address the risk of induced seismicity, the basis for the magnitude and distance thresholds is unclear. It is also unclear whether these proposed rules will provide any meaningful protections against induced seismicity. The proposed rules seek to identify induced earthquakes after the fact, but do nothing to assess the risk of such seismic activity prior to performing stimulation operations or require actions that would to such incidents. 5
The Division has not provided any scientific justification for the proposed requirement to monitor for earthquakes within a radius of five times the anticipated fracture length. Furthermore, the proposed provisions only apply to fracture stimulation operations rather than all stimulation treatments. The Division also has not provided any justification for the proposed requirement to monitor for earthquakes greater than or equal to magnitude 2.0. Magnitude, intensity, or other thresholds to trigger actions by the operator or regulators (often referred to as a traffic light system) should be based on an assessment of seismic hazard and risk and site-specific conditions. We recommend that the Division, in consultation with the California Geologic Survey and other appropriate partners, develop a more robust system of regulations to address the risk of induced seismicity from well stimulation. 9) Require complete compliance with all notification, disclosure, and monitoring for confidential wells that receive well stimulation treatments. The regulations do not clearly specify that complete compliance, including transparency to the public, will be required and enforced for confidential wells, or that notification, disclosure, and monitoring for confidential wells must occur if they receive well stimulation. While keeping secret from competitors the initial hydrocarbon production numbers from confidential wells may be justifiable, clandestine well stimulation operations are not. 10) Prohibit stimulation in, under, or around sensitive areas, including but not limited to, the Pacific Ocean (offshore oil platforms), coastal bays and estuaries, coastal zones draining to the ocean, bays, or estuaries, near residential areas, sensitive receptors (hospitals, schools, daycare facilities, elderly housing and convalescent facilities), sensitive ecosystems, wetlands, critical watersheds, groundwater recharge areas, national forest lands, national monuments, national wildlife refuges, state ecological reserves, areas classified as environmentally sensitive pursuant to 14 C.C.R. 1760, and known fault zones. Mandatory setbacks are common in oil and gas producing states. As mentioned in our previous letter, Dallas has regulations that prohibit drilling within 1,500 feet of homes, schools, churches, and other protected sites. Currently in California, well stimulation can occur wherever a well is located, which can be almost anywhere, even directly adjacent to a school, home, or surface waterway. In order to protect Californians health, property, and environment, these regulations should include setbacks from sensitive areas where no well stimulation or waste disposal can occur. Considering most fracking is occurring in the Central Valley, specifically Kern County, the heart of our agricultural industry, it is a significant concern that there are no regulations proposed to protect agricultural lands and water resources needed for irrigation and drinking with buffer zones. As oil companies explore more of the frontier areas of the Monterey Formation, many more surface waters, groundwater basins, farmlands and communities will be potentially affected by well stimulation activities. 6
11) Require operators to prepare Injury Illness Prevention Programs prior to well stimulation to protect workers health and safety. Nowhere is the health or safety of workers addressed in these regulations. Considering the amount of chemicals used in these operations and the unstable nature of crude oil, this is a gross oversight. Revisions to the regulations that we support, some with recommended revisions We are pleased to note the following changes that have been made to the current draft regulations. We support the following provisions and urge their inclusion in the final regulations. In many instances, the revisions need to be further revised. All acid jobs must be reported, regardless of meeting the acid volume threshold or not, to the Division. However, the regulation must be further revised so that those acid treatments are reported in more detail, as noted previously in this letter. The addition of 1761(b)(3) clarifies that even if a well is part of an underground injection project, a system outside of the scope of these regulations, if there has been a well stimulation treatment then it will be regulated by both these regulations and the underground injection regulations. The addition of 1782(a)(9), requires all well stimulation operations to be conducted in compliance with all the applicable requirements of the Regional Water Board, the Department of Toxic Substances Control, the Air Resources Board, the Air Quality Management District or Air Pollution Control District, the Certified Unified Program Agency, and any other local agencies with jurisdiction over the location of the well stimulation activities. However, this should be strengthened to require the relevant agencies to issue a finding and approve each permit prior to DOGGR's final approval. Section 1783(c) increases transparency and interagency cooperation by requiring DOGGR to provide a copy of the completed permit application, including trade secrets and confidential information, to a variety of agencies, the timing and manner of that delivery dependent upon an individual agreement with each agency. However, DOGGR should clarify the language so that it is clear that no well stimulation treatment can commence until all agencies receive the permit application and at least 72 hours have passed, allowing for all relevant agencies to witness the well stimulation treatment. Section 1783 should be revised because currently there are two 1783(c) sections. In the second 1783(c) section, that requires the notification of the Division 72 hours and then 3 hours before the well stimulation treatment occurs, it should state that the Division will notify the other agencies not just upon receipt of the 72 hour notice, but also immediately upon receiving the 3 hour notice. 7
Section 1783.1(a)(24)(C-D), requires reporting information on water use and quality. These two sections require the reporting of how and where water from a well stimulation treatment will be recycled, including a description of any treatment or reclamation activities to be conducted prior to recycling or reuse, and the anticipated source of the water to be used in the well stimulation treatment, including how and where it will be acquired and if purchased, from whom it is purchased. Section 1783.1(a)(26), which requires disclosure of the anticipated source, amount, and composition of base fluids to be used in treatment. Section 1783.1(a)(30) which requires identification of all documents under CEQA that relate to the proposed well stimulation treatment. 1783.2(a)(1) sets up who will be notified in the case of the neighbor notification requirement, and while we support the broadening of those notified to both surface property owners and tenants, it would be more effective if the distance of notification was also broadened. All tenants and surface property owners, as well as subsurface property owners, in a 2640 foot (1/2 mile) radius of the well bore or within 2640 feet of the horizontal subsurface path of the well should be notified. Additionally, in the case of schools or other public facilities, all users (including students, parents and teachers) should be notified. Section 1783.2(c), which requires 30 days to pass between the last notification and the commencement of the well stimulation treatment, giving time for neighbors to respond to water monitoring opportunities. Section 1783.3(b)(6), increases transparency of water quality testing data. However, only providing data to tenants based on the "extent authorized by the tenants lease," is problematic. Any lawful tenant, and any water user, for that matter should receive testing data regardless of written agreements. In the example of a school, for instance, all students, parents and teachers should also have access and be notified of the water quality data. Section 1788(a)(12)(A-G), which requires reporting on the source, volume, and specific composition and disposition of all water associated with the well stimulation treatment. However, produced water will continue to come out of stimulated wells long after the 60 day post stimulation public disclosure. The division should also require subsequent reporting after the initial disclosure in order to create greater and more accurate transparency for aspects of well stimulation which do not follow the short timeframe that a 60-day post stimulation disclosure is appropriate for. Section 1789(a)(4), which requires the operator to submit a description of hazardous wastes generated and their disposition, including copies of all hazardous waste manifests used to transport the wastes offsite to an authorized facility, to the 8
Division within 60 days after the end of a well stimulation treatment. We support the inclusion of this provision. This section though, should be expanded to explicitly apply to all waste, including produced water. Revisions to the draft that we oppose There are also changes that occurred in this revised draft that we oppose. The following sections should be amended: While 1783.1(a)(16) now includes measured estimates of both the length and height of the planned modifications, it no longer requires the locations of existing wells, including plugged and abandoned wells that may be affected by the stimulation envelope, to be reported. This should be rectified in the final revision. All wells that could be impacted by an altered formation should be reported as required pursuant to 3160 (d)(1)(e) of SB 4. It appears that the intent of Section 1783.3(a) was to provide water monitoring rights to both the surface property owners and tenants notified in Section 1783.2, but the language makes that right unclear. In order to comply with Section 3160(d)(6)(A) of SB 4, this section of the regulations must clearly give the right to water quality testing to tenants, and not only surface property owners. Section 1784.2(c) should be removed because it gives the Division the ability to waive certain cement safety evaluation procedures and notification requirements if an alternate plan meets their approval. SB4 does not provide DOGGR with this authority. Section 1787(a) removes reporting requirements for suspected well leaks. It is imperative that DOGGR and the appropriate Regional Water Board be notified immediately of any suspected leaks. The deletion of 1787(b)(2) should be reversed. The section that was removed provides valuable information and stringent testing requirements for monitoring the well after it has undergone treatment. The removal of 1789(a)(1) should also be reversed. The results of well stimulation treatments should be reported to the Division. Glaring omission: Lack of enforcement or pollution limits The complete lack of discussion of enforcement is a glaring omission. This draft does not limit any pollution to air or water and does not specify how the Division should respond to non-compliance of any section of these regulations. Such a regulatory scheme lacks the teeth needed to be effective and invites repeat violators. This omission signals to the public and the environmental community that DOGGR in fact does not view itself as a regulatory agency whose job is to ensure that the industrial activities it regulates are conducted safely, but rather, as an enabler of the oil and gas industry. With no enforcement provisions, the 9
Division sends a clear message to the industry it regulates that they need not be concerned about complying with these regulations. We appreciate the opportunity to comment on these regulations and look forward to the Division s response to our comments. Sincerely, Jena Price Legislative Director California League of Conservation Voters John Brooks President Citizens for Responsible Oil and Gas - CFROG Gary Lasky President Fresnans Against Fracking Kathy Callaway Board Chair Mainstreet Moms Andrew Grinberg Oil and Gas Program Manager Clean Water Action Michelle Berditchevsky Senior Conservation Consultant Mount Shasta Bioregional Ecology Center Bill Allayaud California Director of Governmental Affairs Environmental Working Group Jeff Kuyper Executive Director Los Padres Forest Watch Brian Segee Senior Attorney Environmental Defense Center Peg Mitchell Public Policy Committee San Diego 350 cc: Senator Fran Pavley Cliff Rechstschaffen and Martha Guzman-Aceves, Office of Governor Jerry Brown Saul Gomez, Natural Resources Agency 10