California Publishes Two Statutorily Mandated Studies on Fracking and Other Oil and Gas Stimulation Methods

Author: Peter Duchesneau

On January 14, 2015, the State of California released two anticipated studies concerning hydraulic fracturing, also known as “fracking,” in California pursuant to Senate Bill 4 (SB 4) enacted in 2013. The California Natural Resources Agency (CNRA) released the first of three volumes of a peer-reviewed independent scientific assessment, while the California Department of Conservation (DOC) issued a Draft Environmental Impact Report (Draft EIR) on oil and gas well stimulation treatments in California.

Independent Scientific Assessment of Well Stimulation Treatments

As required by SB 4, the CNRA commissioned the California Council on Science and Technology to conduct an independent scientific assessment of well stimulation treatments in California to assess current and potential future practices. Volume I, just released, addresses how and where hydraulic fracturing, acid fracturing, and matrix acidizing well stimulation technologies are deployed for oil and gas production on land and offshore in California and where the technologies might enable production in the future. Key conclusions of this assessment include:

• Over the last decade, about one-fifth of oil production in California came from wells that had been subject to hydraulic fracturing. The vast majority of hydraulic fracturing in the state takes place in the San Joaquin Basin in reservoirs that depend on hydraulic fracturing for economic production.
• Current hydraulic fracturing activities in California are different than in other states, and, as such, recent experiences with hydraulic fracturing in other states do not necessarily apply to current hydraulic fracturing in California. Generally, current hydraulic fracturing in California tends to be performed in shallower wells that are vertical as opposed to horizontal and requires much less water per well, but uses fluids with more concentrated chemicals than hydraulic fracturing in other states.
• The United States Energy Information Administration’s (U.S. EIA) 2011 and 2014 oil resource projections from deep source rocks in the Monterey Formation are highly uncertain, as there is little evidence to support estimates that there may be substantial oil resources in deeper source rock reservoirs, especially in the Monterey Formation.
• Dry (nonassociated) gas wells in California are rarely stimulated. However, most of the gas production in the state is not from dry gas wells, but from wells that primarily produce oil. As such, about a fifth of the gas produced in the state is facilitated by hydraulic fracturing, and hydraulic fracturing facilitates about a third of the subsurface storage of natural gas in the state.
• Hydraulic fracturing is used in a small proportion of offshore wells and is expected to continue to play an incidental role in offshore production. The majority of offshore production takes place without hydraulic fracturing, with most of the limited hydraulic fracturing activity conducted on man-made islands.
• Operators report the use of acid for well stimulation much less often than hydraulic fracturing. Although acid is commonly used for well maintenance and remediation, acid stimulation does not represent an important well stimulation technology in California compared to hydraulic fracturing.

By July 1, 2015, final peer-reviewed copies of Volume II and Volume III are to be submitted to the CNRA. Volume II will assess the potential impacts of well stimulation technologies with respect to water, air quality, greenhouse gas emissions, induced seismicity, ecology, traffic and noise. Volume III will present case studies to assess environmental issues and qualitative hazards for specific geographic regions.

Draft EIR – Analysis of Oil and Gas Well Stimulation Treatments in California

The DOC, through its Division of Oil, Gas and Geothermal Resources (DOGGR), published a Draft EIR, titled “Analysis of Oil and Gas Well Stimulation Treatments in California,” which is also required under SB 4. The statewide programmatic Draft EIR analyzes the environmental impacts of well stimulation treatments performed in a manner consistent with proposed permanent regulations for hydraulic fracturing that are scheduled to take effect July 1, 2015. The Draft EIR also provides a more focused programmatic environmental review in connection with proposed oil and gas well stimulation activities at the Wilmington, Inglewood, and Sespe Oil and Gas Fields, located in Los Angeles and Ventura Counties.

The “Project” addressed by the Draft EIR is defined as all activities associated with a stimulation treatment that could occur either at an existing oil and gas well, or an oil and gas well that is drilled in the future with the intent to stimulate the well, or a well drilled with a reasonable possibility of becoming subject to a stimulation treatment. The Draft EIR covers 24 environmental subject areas as well as six alternatives, including No Future Well Stimulation Treatments Alternative, No Future Well Stimulation Treatments Outside of Existing Oil and Gas Field Boundaries Alternative, Well Pad Consolidation Alternative, Urbanized Area Protection Alternative, Active Fault Zone Restrictions Alternative, and No Project Alternative.

The public review period for this Draft EIR ends on March 16, 2015. The DOC will conduct six public meetings in February to receive comments on the Draft EIR. Once finalized and certified by DOGGR, the agency will examine specific proposed well stimulation activities in light of the final EIR’s conclusions to determine whether any additional environmental review document(s) must be prepared.

Both of these studies seem destined to contribute to the ongoing fracking debate, but unlikely to put the matter to rest. Indeed, both may not only play an important role with the future application of DOGGR’s new fracking regulations, but could also become fodder to be used by interested parties looking for a basis to revisit the regulations yet to take effect.