A year-long state audit of California’s process for reviewing certain types of joint oilfield projects in Kern County identified bureaucratic loopholes, but found regulators were “generally complying” with appropriate procedures before giving approvals.
In a report released last week based on the 2019 regulatory actions, the California Department of Finance’s Office of State Audits and Assessments recommended standardizing and bringing a new level of transparency to regulatory processes that it says him, have not been applied consistently.
Making the recommended changes could potentially lead to slower reviews, and could call into question some approvals of existing projects, but does not appear to threaten Kern’s most important industry otherwise.
The report ends one of three initiatives ordered by Governor Gavin Newsom in November 2019 in response to pressure from anti-oil environmentalists. The only one still pending is his call for a buffer zone between oil installations and sensitive places such as homes and schools.
The state audit report looked at two types of projects – hydraulic fracturing, better known as “fracking,” and underground injections such as the disposal of wastewater from oilfields – on which environmentalists have been concentrated in recent years.
Fracturing the cracks opens up subterranean formations to release oil reserves, while the underground injection work envisioned in the report either drains salty wastewater that comes with oil or injects steam or water to increase the pressure. production. Environmentalists say both classifications threaten to contaminate groundwater and pollute water wells.
Among the report’s most damaging findings is that the agency now known as CalGEM, the California Geologic Energy Management Division, improperly approved a 640-acre extension of an oil operation in the Kern Front oil field. .
He said the division has allowed the project operator to add 100 new injection wells and 300 production wells without requiring a formal request. The report notes that CalGEM admitted to mismanaging the case.
An attorney for the Center for Biological Diversity, an Arizona-based environmental group that has criticized the California oil industry and regulators, said via email Monday that the report confirms that state officials “are even skipping the review on more basic before blocking hundreds of dangerous oil and gas production wells and sewage injection wells in and around Kern County. “
“It’s time for the Newsom government to crack down on illegal projects and start prioritizing public health and safety,” wrote CBD lawyer Hollin Kretzmann.
Dan Ress, an attorney with the Center for Race, Poverty & the Environment, which has offices in the Bay Area and Kern, called the report evidence that CalGEM has prioritized oil and gas extraction at- above the safety of the community. He said in an email that oil companies “are reaping the rewards of lax oversight, leaving people who live near poorly regulated sites to pay the price.”
Oil industry representatives mostly withheld their comments on Monday, saying they were reviewing the audit results. The Western States Petroleum Association added via email that it was working with CalGEM and others on “the successful implementation of protections and efficiencies” in underground injection and fracking regulations.
Auditors found that CalGEM failed to update its well-authorized policies and procedures to reflect state regulatory changes made in April of last year, which led to disparate review processes across different parts of the state.
They also criticized a practice that drew attention in reports last year: injection wells were approved without supporting documentation, a practice that regulators had said may result from confusion over “fictitious” files rather than intentional misconduct.
CalGEM and its parent agency, the State Department of Conservation, both of which have new management installed by Newsom, broadly endorsed and welcomed the recommendations of the audit report.
Regulators said they would update project approval checklists, ensure software systems reflect changes, and work on improvements with state and regional water regulators.
“CalGEM intends to embark on a large-scale effort to update its policy and procedure documentation, in particular through the development of ‘standard operating procedure’ documents…”, states a response letter audit by David Shabazian, director of the Department of Conservation, and the national oil and gas supervisor Uduak-Joe Ntuk.
Regarding the placeholder files, the letter read: “CalGEM does not intend to take over this type (of) practice of ‘placeholder’ project number.”
The report requires the Department of Conservation to publish a corrective action plan to address the issues identified in the report, and then file updates every six months until all corrections have been made.
Follow John Cox on Twitter: @TheThirdGraf
