Nov. 28 — Behind California’s de facto moratorium on hydraulic fracturing lies a broader trend that is of growing concern to Kern’s oil industry: fewer permits for all other types of well work, at the exception of plugging and abandonment.
Governor Gavin Newsom has resisted calls from environmentalists to stop all new drilling. But at the same time, his administration introduced new levels of control among other changes that restricted authorization at a time when high oil prices forced the Biden administration to open up the Strategic Oil Reserve.
State and federal government data shows that in the two years since Newsom took office in 2018, California has seen a 19% drop to 1,796 permits granted each year for new drilling. Permits granted each year for plugging and abandoning wells actually jumped 11% to 3,001 during this period, while the number granted for work on existing wells fell 37% to 1 550.
California oil permits have followed policy since before Newsom became governor. Former Gov. Jerry Brown fired former state oil and gas supervisor Elena Miller in 2011 after a fervent campaign by local leaders and pressure from politicians, including Rep. Kevin McCarthy, R- Bakersfield.
The main complaint against Miller then was the same as it is now against state regulators: Closer scrutiny and a lack of urgency on the part of the state means it takes longer for producers of oil to get a permit that can support local jobs and support local tax revenues.
The head of Bakersfield-based oil producer Aera Energy LLC brought the issue to light on November 10 during his keynote address at this month’s Kern County Energy Summit.
President and CEO Erik Bartsch clicked to view a slide titled “California Allowing Slowdown.” He plotted big jumps in the number of days the state has taken in recent years to approve underground injection permits and well stimulation projects like hydraulic fracturing, the controversial well-finishing technique also known. under the name of hydraulic fracturing.
His argument was that Newsom is quietly attacking California’s oil supply.
“The phase-out is happening today without public debate,” said the head of Aera, whose denials of state permits for fracking work in western Kern are on trial. in Kern County Superior Court.
The state’s main oil regulator, when presented with industry summaries showing the permit cuts, highlighted the Newsom administration’s redefinition of public health and safety priorities in reviews of oilfield projects, and what he called the most rigorous monitoring process in the country.
The California Geologic Energy Management Division highlighted several initiatives ensuring more in-depth reviews of license applications from oilfield operators, as well as an in-depth review of the state’s licensing process. He acknowledged that additional work took time.
He noted a recent audit of the state permit review process, CalGEM’s introduction of federal science reviews of hydraulic fracturing project applications and new regulations on injection work. He also drew attention to a moratorium imposed by the Newsom administration on some high-pressure steam injection work after a major oil spill near McKittrick.
A turning point recently arose when a judge ruled against Kern’s attempts to institute an OTC licensing process for oil and gas operations. The move has, at least temporarily, returned CalGEM to the lead agency role in California’s environmental reviews of oilfield projects.
The agency said in an email that its staff “will rigorously review every permit application under the California Environmental Quality Act.”
“This action allows operators to move forward with over 200 plugging operations ahead to permanently seal old wells that are no longer in use,” CalGEM said.
California Independent Petroleum Association business group CEO Rock Zierman said the state has full court authority to authorize wells that have already gone through county proceedings before October 6. But he said the agency insists on granting only conditions for approval of new wells until the county’s authorization case is resolved.
A spokesperson for the Western States Petroleum Association trade group said the Newsom administration is making it difficult for oil producers to get the permits they need to produce affordable and reliable energy for the state. He asked why this is happening at a time when President Joe Biden is calling on Russia and OPEC to increase oil production to help bring down global fuel prices.
Santa Clarita-based California Resources Corp., responding to questions about the pace of the state’s oil permits, has expressed no complaints as it pursues well stimulation projects and “works constructively with the agencies of the state. ‘State to obtain the permits required to safely produce stable and affordable low-carbon fuel production for Californians. “
Chevron Corp., when asked the same questions, noted that California produces only 30% of the oil it consumes and that, as an energy island, production in the state contributes to reliability. and energy security.
The company said policies that restrict supply only shift energy production, along with well-paying jobs and tax revenues, to places where regulatory standards are less stringent. He said he supports predictable and consistent permits that promote safe and responsible development of oil and gas resources.
“We need to allow predictability and consistency to build and execute our business plans,” a Chevron spokesperson wrote in an email.