Wednesday, May 29, 2013

Ban Hydraulic Fracking in California: Legislative responses to California's latest environmental crisis


Table of Figures:


The fight against hydraulic fracturing or fracking is similar in some respects to other environmental struggles.  In a typical scenario, a powerful industry causes pollution and environmental degradation as it subverts the political structure in order to defend its practices.  Most of these fights are “David verses Goliath” struggles.  The distribution of pollution sources and the strength and secretive nature of the industry all make this a particularly tough fight.  In the case of fracking, the most powerful energy sector will not easily abandon the possibility of profiting from more than 15 billion barrels of previously untapped oil reserves in The Monterey Shale formation. California, though, will see none of these resources since the oil recovered from the area is poor quality crude that is below the state’s standards for use and refining.

Historical alliances between the oil industry and the political establishment exempted the practice from the CEQA (California Environment Quality Act) process.  This exempt status hid environmental and health effects in California.  In recent years, fracking methods advanced to horizontal wells that are much deeper than previously drilled.  These changes in fracking have awakened awareness of its environmental impact.  Gas fracking has caused water and air pollution, as well as earthquakes, which highlight the practice’s impact.  The practice of fracking is still shrouded in mystery since the industry is not transparent about the specifics of their techniques and the use of chemical compounds.  This mystery creates distrust among the public, which heightens when the industry opposes regulation.  The Division of Oil Gas and Geothermal Resources (DOGGR) never required mandatory registration of wells, extraction methods, water use or chemical disclosure up to now.  Therefore, communities are kept in the dark about industry practices.

Environmental activists are split about fracking regulation’s effectiveness on water resource depletion, water contaminations and air pollution.  Regulation, however, will not eliminate all impacts of fracking nor would it help direct our economy towards a greener energy future.  In its pursuit of greater profits, the oil industry stifles competition from green energy sources.  The boom and bust oil and gas economy keeps profit and control over resources in the hands of few wealthy multinational corporations.  The California economy and environment would do far better promoting green energy sources such as wind and solar.

AB32, the Global Warming Solutions Act of 2006, directs the state to reduce its GHG (greenhouse gas) outputs to 1990 levels by 2020; fracking would lead to the antithesis of this goal.  Although banning fracking is an immense challenge, it is a powerful message to a defiant industry that California is not buying its deception.  Oil industry jobs are risky and injury prone.  Without a severance tax on oil, the industry benefits at the public’s expense by exploiting scarce water resources and polluting groundwater.  In light of these environmental and economic costs, fracking is not worth the benefits it brings.  Consequently, California would do far better investing in the renewable energy sector.

The public could thwart the numerous detriments of fracking by banning these operations altogether.  The ban would limit the industry’s ability to extract the oil and eliminate California’s exposure to this risky economic experiment.

Chapter 1 – Hydraulic Fracturing in California

What is Hydraulic Fracturing or Fracking?

Hydraulic fracturing or fracking is a method of oil and natural gas production.  In this process, oil and gas companies pump large quantities of water mixed with sand and chemicals under high pressure into underground wells to release the oil and gas bound within rock formations, such as shale and coalbed.

The practice of hydraulic fracturing started in 1947, when oil and gas producers used vertical fracking techniques to increase production and prevent clogging (Suachy & Newell, 2011).  In vertical fracking, a shaft is drilled straight down.  However, the method has developed to an extended horizontal drilling that increases the length and depth of previous practices (Suachy & Newell, 2011).  The industry began this new fracking practice of horizontal fracking in shale and coalbed formations by fracking the same well several times (Suachy & Newell, 2011).  This method allowed companies to recover large quantities of oil and gas from wells that had previously stopped producing.

Hydraulic Fracturing in California

Fracking began in California in 1953 with vertical fracking; since then, tapped out oil wells use fracking to restart production (Shearer, 2012).  Today, horizontal fracking opens up huge oil reserves in California.  Industry sources say that over 600 wells used fracking in California in 2011 (Shearer, 2012).  Most of these are oil wells.  The industry is reporting fracking activity concentrations in Bakersfield, Los Angeles and areas north of Sacramento (FracFocus, 2012).

Promising oil reserves in the Monterey Shale Formation could only be accessed through fracking methods.  The reserves span the distance south of Monterey and north of Santa Barbara and east to the San Joaquin Valley.  There are estimates of over 15 billion barrels of recoverable oil within the formation (Masterson, 2012).  That translates to 630 billion gallons of gasoline.  California drivers use 16.5 billion gallons of gasoline per year (California Energy Commission, 2012).  Hypothetically, the reserves could possibly supply California with another 40 years of fuel.  However, the crude oil from Southern California is not processed or sold in California due to its poor quality, which is equivalent to the crude extracted from the tar-sands in Canada.  The industry exports this dirty crude to places with lower environmental standards (Roberts,, 2013).

Most fracked wells in California are oil wells, which somewhat reduces the environmental risks of this practice.  Oil extraction uses less water in comparison to gas production, so fracking in California does not use as much water as in other places (Baker, 2012).  Still the average water use for fracking in California is about 164,000 gallons per well.  That is an average use of a single golf course watering per day (Baker, 2012).  Furthermore, California has limited water resources; the question is how many new golf courses California’s water supply can support.  This issue is pivotal since we can expect many thousands of new fracked wells in the coming years in a state that has diminishing ground water reserves.

California is one of seven states that oversee oil and gas explorations jointly with the U.S. Environmental Protection Agency (EPA). The Division of Oil, Gas and Geothermal Resources (DOGGR), the state government agency in charge of fracking regulation, has been late in collecting information about the practice (Shearer, 2012).  To date DOGGR, a division of the Department of Conservation, has not issued regulation governing hydraulic fracturing (Shearer, 2012).  Federal regulators informed DOGGR of deficiencies in its oversight in 2011 and required prompt resolution (Shearer, 2012).  That same year, Governor Jerry Brown fired Derek Chernow, head of the Department of Conservation and his deputy Elena Miller when they refused to relax regulations on underground injections, a technique associated with fracking.  Chernow and Miller argued that the proposed lenient regulation standards would violate federal laws (Shearer, 2012).  This case sheds light on Governor Brown’s position on fracking.

Since state regulators have not been effective, some local communities have gone ahead with efforts to prevent environmental damage.  Fracking occurs in several cities in Los Angeles County, among them Culver City, Los Angeles and Inglewood.  Oil fields dot the landscape, amidst a densely populated metropolis.  Communities are concerned about the environmental harm that may result from this practice.  Through litigation, citizen groups have reached a settlement agreement that includes air quality monitoring and health assessment (Baldwin City, 2012).  This assessment provision, however, is simply a Band-Aid solution to mounting concerns.

Chapter 2 – Pollution, Leaks and Water Resources

Contamination from Fracking

The change in fracking practices to horizontal fracking increases concerns for water and air quality as well as other health and environmental concerns because the fracking activity happens below ground water tables.  In Pennsylvania and New York, evidence show that fracking for natural gas from the Marcellus and Utica shale formations has resulted in contamination of ground water (Frosch, 2012) and farmlands (Fox, 2010).  Despite these concerns, fracking regulation is limited for several reasons.
One reason is the division of authority between the federal and state governments.  Another reason is the narrow scope of U.S. EPA oversight authority under the Safe Drinking Water Act.  Since 2005, the notorious “Halliburton loophole” exempts underground injections of chemicals from tight regulation except for diesel fuel.  The EPA has acknowledged that there are health concerns related to this extraction method (EPA, 2011), and is currently conducting a study to assess the impact of the practice on drinking water sources.  Their study is due to be completed in 2015 (EPA, 2011).

The fracking fluid is one of the main health concerns associated with fracking.  A cocktail of chemicals, many of which are highly toxic and carcinogenic, mixed with water and sand is utilized to break up the rock formation to access the oil and gas bound within.  The Congressional Committee on Energy and Commerce minority staff report on the chemicals used in fracking listed formaldehyde, naphthalene and benzene among the toxic chemicals components in many fracking fluids.

The cocktail of chemicals in the fracking fluid could leach out of the overflow pools to contaminate local waterways and harm wildlife.  Air pollution is another concern.  Fracking releases ozone in the immediate area as well as vapor from the volatile organic compounds (VOCs) in the overflow pools.  Finally, the practice could potentially cause earthquakes, which is an understandable concern in California (Baldwin City, 2012).

Figure 1, Monterey Shale Formation and Ground Water (Deprtment of Water Resources, 2003) & (DOGGR, GIS mapping - well sites, 2013)

The Lure of Financial Rewards vs. Land and Water Contamination

Complaints about hydraulic fracturing contamination in the past several years have reverberated throughout gas production areas across the country.  Pennsylvania, New York, Wyoming and Colorado are among the states that have experienced water and land contamination.  In the 2010 movie “GasLand,” Josh Fox traveled through these areas and collected fracking horror stories.  Farmers are forced to purchase water to replace their well water, which has been contaminated by fracking.  Domesticated animals are exhibiting serious health problems and wild animal carcasses are found by contaminated streams (Fox, 2010).

Extraction companies approach landowners with leasing options that sound like winning the lottery, but leave the landowners with no recourse when things go wrong.  Lease agreements for oil and gas extractions let these companies set up their equipment and have road access to the well site.  Truck traffic brings with it air pollution and noise, and VOC’s vapor and spills expose farmland and streams to leaks and contamination.  Fox estimates the average truck trips at 1150 per well for fracking purposes (Fox, 2010).
Unfortunately, the industry is neither careful nor caring, as indicated by a comment that Mr. Tillerson CEO of Exxon, made to Forbes Magazine:
“The consequences of a misstep in a well”, he states, “while large to the immediate people that live around that well, in the great scheme of things are pretty small, and even to the immediate people around the well, they could be mitigated…they are not life-threatening, they’re not long-lasting, and they’re not new.  They are the same risks that our industry has been managing for more than 100 years in the conventional development of oil and natural gas.” (Rogers D. , 2013)

This statement is riddled with half-truths.  Contaminated groundwater cannot be mitigated.  In case of spills into farmland and riverbeds, costs are high and complete clean-up is impossible.  Health problems associated with fracking have not been studied thus far, therefore, their consequences are not known.  The fracking practices have changed in the past ten to fifteen years and are now more hazardous than before, as is evident from the contamination and leaks on gas fracking sites.

In California, the practice was not scrutinized by CEQA and therefore we just do not know the occurrence and extent of previous impact.  However, common knowledge of infamous incidents such as those of Exxon-Valdez and BP Deepwater Horizon, point to an industry that carelessly pollutes and drags the lawsuits on for years with little accountability to the people and the environment.

Besides the fracking sites themselves, accidents and spills occur on the miles of pipeline that crisscross the land.  Between 2010 and 2012 there were 1,049 hazardous liquid pipeline accidents in the US (Dept. of Transportation, 2013).  Pervasive organizational failure by a pipeline operator along with weak federal regulations” was blamed for a particularly egregious spill in Yellowstone National Park.  The National Transportation Safety Board Office of Public Affairs said there was a “culture of deviance” and systematic flows in the operations of the pipeline (Knudson, 2012).

Water Issues: Contamination of Underground Sources

In East Coast states, numerous accounts report signs of water contamination immediately after fracking.  The fracking initiates percolation of methane and other VOC’s into the ground water table to such a degree that faucet water can be ignited and start a fire.  People in the affected area complain of incessant headaches, neurological problems, brain lesions and asthma among other health concerns (Fox, 2010).

The industry’s disregard of their practices’ impact is evident.  Tupper Hull, vice president of strategic communications for the Western States Petroleum Association, questions the purpose of disclosure of fracking fluid chemicals.  He notes that disclosure after the fact is just as valuable (one of DOGGR’s current recommendations).  Yet the lack of proper and timely disclosure limits testing before and after fracking activity, which would clearly indicate the source of contamination.  Moreover, Hull contends that there are impervious layers of rock between ground water and shale formations (Ratcliff, 2013).  While this cannot be proven, evidence of events of previous water contamination contradicts that assumption.  In addition, California’s seismic activity creates uneven geological layers therefore, by comparison to the East Coast; fracking in California could cause even more damage by causing earthquakes (Roberts,, 2013).

Overflow Pools and Leaks

Fracking fluid overflow is contained in evaporation ponds.  Contaminated fracking fluid laced with carcinogenic components can leak out of these ponds.  Fracking drill sites vent fumes that pollute the air to a level comparable to heavy city traffic.  Vaporizing fountains promote speedy evaporation, and disperse the chemicals over the surrounding area.  Some of these ponds use plastic liners, but others do not.  Even when liners are used, they can leak into streams and leach into ground water reservoirs.  Without consistent federal regulations, the community is at the mercy of the underfunded state regulators (Fox, 2010).

The consequences of the leaks are evident in the pistachio and almond groves of Fred Starrh of Kern County.  To compensate for water shortages in the 90’s Starrh mixed ground water with his water allotment.  His trees are planted adjacent to an industry ‘produced water’ or overflow pond.  The ‘produced water’ seeped into his ground water and killed a large portion of his trees.  In 2009, he won $8.5 million in damages from Aera Energy ponds, a joint venture of Exxon Mobile and Shell.  The win is of little consolation since it would cost hundreds of millions to flush out the contamination (Miller, 2011).

The aftermath of contamination is much more expensive and complicated to fix than avoiding the contamination in the first place.  The oil and gas industry fights even modest regulation that could reduce contamination.  Common Cause reported that Exxon Mobil spent over $150 million lobbying Washington to halt regulation in the past ten years (Common-Cause, 2011).

California’s Water is Too Precious for Fracking

Fracking in California requires less water, ‘only’ hundreds of thousands of gallons per well is used in comparison to millions of gallons for gas fracking.  This is still too much for a water-strapped state.
In the 1980’s each barrel of oil extracted in California used four and a half barrels of water in production.  By 2008, the ratio went up to eight barrels of water for one of oil (Miller, 2011).  Fracking is dependent on substantial water withdrawal.  In the meantime, the industry buys land above the Monterey Shale Formation for exploratory wells.  In the near future, we can expect thousands more wells if this practice is allowed to proliferate.

Governor Jerry Brown proposes new water tunnels to supply the water needs of Southern California (Blanchard, 2013).  The proposal permits the State and Federal Water Contractors Association (SFWCA), founded by six water districts to finance the construction of two tunnels that will divert water from Northern California.  These tunnels would facilitate the sale of water from communities in Northern California to these six water agencies (Bacher, 2013).  In essence, this could place privatization pressure on California’s water resources.  Environmental organizations perceive these plans as an additional catalyst for fracking activity (Bacher, 2013).  Fracking is not sustainable with the limited water supply in our state.

The state Department of Energy; estimated water withdrawals by oil companies in the 1980’s, in Kern County to be upwards of 12 billion gallons a year (Miller, 2011).  The oil production has cost the state heavily in water resources utilized by an industry that pollutes at will and does not pay taxes on the resource they extract.  The citizens of California deceive themselves; if they think that the state watches over this industry.  Oversight is not adequately funded; therefore, inspections are insufficient (Miller, 2011).

Associated Earthquakes

Yet another concern that is crucial in California is fracking-associated earthquakes.  Earthquakes have been reported in many fracking regions that did not previously experience active faults (Behar, 2013).  The National Research Council collected data on human caused seismic activity due to energy technologies and concluded that most fracking activities do not pose substantial risk for earthquakes.  However, the secondary practice of discarding overflow fracking fluid by injection wells does pose significant risks (Hitzman, 2012).
Yet another risk of this practice is the incidence of earthquakes reported near fracking sites.  In Texas, a two-year study positively correlated concentration of small earthquakes within 2 miles of fracked wells.  For unknown reasons, these small earthquakes were not reported by the National Earthquake Information Center (Frohlich, 2012).
The Dallas airport, located in a region of substantial fracking activity, experienced such earthquakes, in magnitude of 2 to 3.4 on the Richter scale.  The same area was inundated with fracking overflow water (MacKinnon, 2012).
Without systematic data collection on fracking practices, there is little information available on the scale of these overflow injections but earthquakes occurred near many fracking sites.  Southern and Central California is interspersed with fault lines and fracking activity in particular injection wells could trigger much larger earthquakes than in other fracking locations.
Figure 2, Map of Monterey Shale Formation and Earthquake Faults (USGS, 2010) & (DOGGR, GIS mapping - well sites, 2013)

Chapter 3 – Why is fracking not worth the risk?

Economic Gains; At What Cost?

Depletion of water resources and earthquake damage are part of oil explorations negative impacts.  These impacts have an economic value.  The industry saddles the communities around its operations with many negative economic externalities.  Externalities are “unintended” consequences of an economic transaction that fall on a third party (in this case the public) to pick up the tab.  While the seller and buyer both benefit from better prices, which do not include the added cost of the externalities, the public incurs great loses from the transaction by covering and living with these costs.  Fracking fluid contaminations, air pollution, job injuries and depleted water resources are all externalities of the oil industry that suppress the California economy.
Oil and gas royalty and rental payments from BLM parcels support local and state government and help develop parks.  California benefited from pipeline right-of-way rentals in 2011 to the tune of $1,150,461 (Bureau of Land Management, Rentals and Royalties FY2011, 2012).  In addition, California received $88 million in revenue from oil and gas production on BLM parcels (Dept. of the Interior, 2011).  However, compared to the subsidies the government gives the industry, it’s a wash and these revenues are not quite as appealing.

The wide spread myth that this industry acts as a good citizen is sadly mistaken.  We see time and again that corporate negligence and mistakes burden the economy with negative consequences.  The tar-sands crude oil spill in Arkansas in early April 2013, illustrates the inability of the industry to protect the interests of the community in which it is operating.  A week earlier, a train derailment in Western Minnesota spilled 300,000 gallons of crude (Song, 2013).  In Marshall, Michigan in 2010, one million gallons of oil destroyed two miles of Talmadge Creek and almost 36 miles of the Kalamazoo River for several months; in addition, over 100 homes had to be permanently relocated.
"People don't realize how your life can change overnight," LaForge (A local home owner) told an InsideClimate News reporter as they drove slowly past his empty house in November 2011. "It has been devastating." (McGowen & Song, 2012)
These accidents represent operational costs to the industry but their economic and environmental harm lasts long after the industry recovers these costs.

Another economic loss is the missed opportunity of investing in renewable energy.  In essence, California is supporting an industry that is not beneficial to the same degree that an investment of the same magnitude in green energy would be.  The state invests in infrastructure, education, reliable energy and water resources to support industry, which in turn provides jobs and tax revenue.  If however, the state invests in an industry that pollutes, degrades our environment and does not pay an equivalent level of taxes, than we are getting the raw end of the deal.

The renewable energy sector creates three times the jobs that the fossil fuel energy creates.  The quality of the jobs in green energy is higher employing twice the numbers of credentialed jobs.  These jobs pay better; on average, green jobs pay $46,343 while other sectors are $38,616.  Unfortunately, the federal government doles-out subsidies to the fossil fuel industry at 75 times the amount that green energy receives, a cumulative amount of $446.96 billion for fossil fuel vs. $5.93 billion for green energy (James, 2012).  The oil industry subsidies are misguided, since they produce far fewer benefits.
Since the federal government has moved very slowly on this issue, many states, California among them, have established renewable standards.  These states are facing a fierce backlash from the fossil fuel industry and conservative legislators (Plumer, 2013).  In California, the struggle to establish green energy standards was apparent in the fight over Proposition 23.  The proposition would have suspended AB32, the bill that creates greenhouse-gas reduction targets.

 The oil and gas industry pours money into Congress to sway representatives’ votes against regulations.  During a ten-year nationwide campaign, this industry distributed $747 million effectively suppressing fracking regulations (Browning & Clifford, 2011).  We should expect strong opposition to fracking regulations in California.  AB591 that proposed registration of wells, water use and disclosure of the extraction method; died in the Appropriation Committee last year.  AB972 recommended a ban on fracking practices until DOGGR assessed its environmental harm.  This bill had an even shorter life span.
Tupper Hull, a trade organization vice president, said that fracking is a gift to California and the result would be a “phenomenal success story” (Ratcliff, 2013).  The oil however, is in the hands of private industry.  California has high standards for transportation fuel.  Due to the poor quality of the oil produced in the state the oil extracted here will not be refined or used in the state but exported elsewhere (Roberts,, 2013).  The only legacy left in California would be pollution, depleted water resources and contamination.

AB 32, Climate Change; a Game Changer

Fracking for oil goes against established GHG standards in California.  AB32, the Global Warming Solutions Act of 2006, requires California to reduce greenhouse gas (GHG) emissions to 1990 levels by 2020.  The California Air Resources Board (CARB) is the lead agency authorized to implement the law.  The agency’s tools include instituting a cap and trade system, increasing the renewable energy within the state’s portfolio, promoting energy efficiency and establishing target transportation emission reductions.  Fracking increases GHG emissions from operational procedures, gas leaks and truck traffic.

Several studies looked at the GHG emissions from gas fracking operations.  Yet I found no studies that compared GHG emissions from oil fracking operations to conventional extraction.  Natural gas contains methane, which is a greenhouse gas with a different risk pattern than carbon (CO2).  Methane traps twenty five times more heat than CO2.  Methane is a key component of natural gas.  Many of the fracking practices for oil extraction are comparable to those for gas extractions.  For instance, overflow evaporation ponds vent VOCs and cause air pollution.  In addition, the transportation of oil translates into many spills and accidents that cause VOCs to escape and contribute to air pollution.  Furthermore, the air pollution at fracking locations increases due to heavy truck traffic.  Collectively these higher emissions do not align with AB32’s goal and would hamper California’s efforts for GHG reduction.
Evidence points at escaped gas from fracking operations as well as along the pipeline as the source of higher emissions.  We can likewise expect some of these to be true for oil production, since methane and other VOCs are present in the oil reservoirs.

Hydraulic fracturing production of natural gas carries a 30% – 200% higher burden of GHG than conventional methods.  A 2011, study accounts for the entire life-cycle of each practice and calculates the reported methane emissions conservatively.  The reasons for the increased emissions are fracking fluid flow-back that includes methane and the “drill-out” stage, both of which happen at well completions.  This study concluded, “The large GHG footprint of shale gas undercuts the logic of its use as a bridging fuel over coming decades, if the goal is to reduce global warming(Howarth, Santoro, & Ingraffea, 2011).

Comparison between natural gas from fracking and coal GHG emissions over their life-cycle reveals that shale gas (fracked gas) carries a range of 0.87 up to 1.71 GHG burden compared to that of coal in the first 20-year span and 0.61 up to 0.88 burden in a 100-year span.  Due to methane characteristics, that intensifies GHG potency in the first 20 years but decreases in the long term, up to 100 years (Wang, Ryan, & Anthony, 2011).

 A third study looked at the GHG emissions of shale gas and compared flaring activity to reduced emission “green” completions.  Flaring burns excess gas and emits hazardous pollution.  In an effort to consider cleaner options to flaring that creates excessive pollution, the study compared other completion procedures.  They assessed the fugitive emissions at 3.6% of all natural gas production, which are the lowest estimates of all the studies.  The industry would not commit to a maximum of 5% escaped gas, since it assumes the levels could be much higher.  They noted that “increased efforts must be made to reduce” the fugitive emissions.  Nevertheless, they concluded that with better completion procedures, shale gas is comparable to the rest of that sector (O'Sullivan & Paltsev, 2012).  Completion techniques refer to the transition from fracking activity to capturing the extracted resource, whether gas or oil, in pipelines.
Since the oil extracted in California is not of adequate quality for state use, additional transportation (shipping) would increase its life-cycle GHG emissions.  Fracking location emissions, pipeline leaks, transportation and the polluting nature of heavy crude add up to a heavy GHG impact.  This increases GHG load, which contradicts the state’s goal of GHG reduction.

California’s Oil Resources

The estimated 15+ billion barrels of oil are speculative USGS assessments (Roberts,, 2013).  Nevertheless, the reserves are expected to supply oil for many years to come.  In calculating the economic benefits of the resource, global oil prices play a large role.  Gas prices plummeted in the US due to fracking but remained high elsewhere (Kemper & Martin, 2013).  So far, that decline in price increased demand on fracking for gas.  Would declining oil prices increase demand and thereby increase pressure on fracking for oil?  Reduced profits, on the other hand, could spell an economic decline.
Canadian crude trades at discount prices these days and historically has had high trading volatility.
“In Canada, we have been shocked to see the opportunities for growth and potential profits from unconventional energy sources evaporate before our eyes.  Perhaps this story is worth telling in a larger arena: what can we do to hedge the risks to companies and governments of energy bubbles?” (Kemper & Martin, 2013)
Producing tar-sands oil is costly by comparison to fracking, which may give preference to California crude and increase oil company’s profits.  Market volatility however will stay a significant part of the equation for these dirty fuels.  Depending on such a volatile market and energy sector that creates so many negative externalities is a bad bet for California.
On the other hand, Deutsche Bank points out that solar energy have reached the market price for electricity.  Consequently, with or without subsidy, renewable energy makes better economic sense (Kemper & Martin, 2013).

Renewable energy is more labor-intensive than the fossil fuel industry and, therefore, creates more jobs per profit margin.  If California wants to keep its economic edge, we should invest heavily in solar and wind power.  Our competition, Germany, is set to triple its renewable sector jobs by 2030 from 2006 levels, which were already comparatively high.  In the US, 200,000 jobs belong to the green energy sector, and a third of that sector’s employment is in China (World Watch Institute, 2013).  California will lose its economic prominence if its investments follow dirty oil.
Recently, the Bureau of Land Management sold leases to oil companies in the area around Bakersfield where fracking activity is ramping up operation.  In 2012, the BLM sold 23 thousand acres for an average of $56 an acre.  While farmland prices rise, these lease prices are dirt-cheap.  Oil companies gobble up these leases, seeing visions of oil profits.  The state, however, will not see much gain.  Since DOGGR doesn’t keep full records of fracking activities, the list of companies below includes only the ones who volunteered the information.

Sale of public lands for oil production:
Figure 3, Oil and Gas Leases
Total number of leases
Total acres under lease
Total revenues
(Bureau of Land Management, Competitive Oil & Gas Lease Sale, 2012)

Fracked wells operators and years of well activity:
Aera Energy LLC - 2011
DCOR, LLC - 2012
Mirada Petroleum Inc. – 2006, 2010
Renaissance Petroleum, LLC - 2010
Seneca Resources Corporation – 2011-2012
Vintage Production California LLC – 1997-2012
This list is not complete due to the voluntary nature of DOGGR’s records (Conservation, 2012).

Chapter 4 – To Regulate or to Ban; That is the Question!

Until now, the powerful oil industry has largely avoided fracking regulation.  In states where regulations are in place, they are inadequate and include loopholes.  By pouring money into the federal government, they averted strict regulations and attempt to do the same in the states where they operate.

U.S. EPA Oversight and the “Halliburton Loophole”

Prior to 1997, fracking was not regulated under the Federal Safe Drinking Water Act (SDWA).  After a lawsuit brought by Legal Environmental Assistance Foundation (LEAF), the 11th Circuit Court constituted that hydraulic fracturing is “underground injection” and therefore, fracking from coalbeds (which narrowed the scope of the regulation) came under the jurisdiction of the federal SDWA (Rogers S. M., 2009).  The decision federalized fracking regulations.  In response, the EPA fought the decision asking the courts to clarify its mandate of supporting industry exploration while conducting its oversight functions.  When the agency received the orders to use oversight but not impede the industry, it initiated a “study” on fracking contamination though only from industry and government sources.  The US EPA finally released a report on fracking in 2004, declaring that fracking does not threaten underground drinking water (Rogers S. M., 2009).

 The EPA Discounted Concerns over Fracking Practices.

Weston Wilson, an EPA whistleblower, argued that this sort of scientific “packaging” occurred in the preparation of EPA’s fracing report, urging that
“EPA decisions were supported by a Peer Review Panel; however, five of the seven members of this panel appear to have conflicts-of-interest and may benefit from EPA’s decision not to conduct further investigation or impose regulatory conditions.” (Wiseman, 2009)
In 2005, Congress amended the Energy Policy Act to exempt hydraulic fracturing from regulation under the SDWA.  The changed definition of “underground injections” excluded regulating fracking fluid components.  Nevertheless, the courts upheld the regulation on diesel fuel when it is used in fracking fluid.  Environmental organizations refer to the law as the “Halliburton Loophole,” named for the company that developed the technique (Rothberg, 2010).  Vice President Dick Cheney, who once led the company bearing the exemption’s name, championed the energy policy that included the “Halliburton Loophole” which was a giveaway to the industry.  The “Halliburton Loophole” deregulated the extraction method and allowed the industry to keep the fracking fluid chemicals secret (Rothberg, 2010).

Two recent attempts to regulate fracking on the federal level did not make it out of committee.  The first, in 2010, was The American Power Act, introduced by John Kerry and Joe Lieberman.  It would have brought fracking regulation under The Energy Planning and Community Act of 1986.  The second, brought before the Senate in 2010 and again in 2011, would have reversed the “Halliburton Loophole” by mandating fracking regulation under the Safe Drinking Water Act (SDWA) (Maule et al., 2013).
Common Cause reports that the gas industry gave $20 million to current members of Congress and upwards of $700 million in lobbying campaigns to avoid oversight.  The industry targeted representatives who supported the “Halliburton Loophole” in 2005 (Common-Cause, 2011).

In March 2013, two new bills attempted to close the loopholes enjoyed by the industry to date.  Rep. Jared Polis (D, CO) introduced the Breathe Act, HR1154, which would repeal the exemption for oil and gas industry, allowing them to emit more air pollution than other industries.  The Fresher Act, HR 1175, introduced by Rep. Matthew Cartwright (D, PA) would eliminate the oil and gas exemption from permits required to prevent storm-water runoff (Ollison, 2013).

With the current Republican predominance in Congress, the future of these bills seems doomed.  Federal government inability to regulate fracking has left state and local governments to fill in the regulatory gap.  Communities that experienced fracking activity are leery of the practice’s benefits.  They can see the devastating aftermath clearly and try to use zoning ordinances to curb the practice’s harmful effects.

The Short Lived Benefits

The oil and gas industry claims that fracking leads to additional jobs and economic growth but after review, these jobs are short lived and the potential environmental harm long lasting and costly.  A study by Cleveland State University concluded that fracking areas of Ohio did not see more overall job growth by comparison to other areas where no fracking occurs.  This could point to a gain in fracking jobs equal to a loss in farming and tourism jobs.  Even though fracking jobs may be better paid, they are not long lasting.  Mothers Against Drilling in Our Neighborhoods, an Ohio grassroots group, notes that the economic losses due to pollution and leaks are not included in the equation.  Such losses to fishing, parkland and organic farming cannot be undone after fracking leaves an environmentally degraded landscape (Apton, 2013).

Underneath an ad tempting people to own oil wells, an Associated Press article in the Miami Herald discussed the legal battle between states and local communities.  When cities and counties try to limit or ban fracking through zoning ordinances the industry fights back using state regulatory power.  State agencies are influenced heavily by industry since they promote and approve extraction activity.  The article describes the local argument against pre-empting local zoning.
"This case comes down to this," said Dryden Town Supervisor Mary Ann Sumner. "Who should make the decision affecting the use of our land? The people who live here, who can identify a particular bend in the road or hayfield or sensitive wetland or bog? Do we have that choice or do we leave it to people in corporate offices thousands of miles away who know nothing of our lifestyle?" (Esch, 2013)
Many towns are concerned about contamination of ground water due to fracking.  State regulators’ function is to encourage the full use of natural resources.  Consequently, they discourage waste in the mining and harvesting of raw materials.  Through this capacity, the regulators are closely linked to industry.  Local residents feel the environmental impact of fracking directly and have less faith in industry practices.

In California DOGGR has opened the process to local communities by holding meetings in affected areas.  The agency opened the process as part of its proposed regulation, announced December 2012.  With any luck, the process will encourage stronger regulations at the state level.

Other States’ Regulations

Regulations of fracking vary from state to state.  The division of authority between federal, states and local governments defines the fracking regulations saga.  Several states are currently in the midst of an authority battle over fracking regulation.  ALEC, the American Legislative Council, a pro-industry legal think tank, produced bills that strip local governments of their planning and zoning authority while limiting federal oversight of industry practices in order to keep disclosure loopholes (Currier, 2012).

State legislators have proven friendly to the industry by passing bills such as Pennsylvania Act 13, Ohio HB 278, Idaho HB 464 and Colorado SB 88 (Horn, 2012).  Act 13 imposes hefty fees for unconventional drilling practices such as fracking (Rubinkam, 2012), but restricts local planning and zoning laws in exchange for impact fees and limited disclosure (Ross, 2012).  Act 13 also grants the industry the power to obtain property through eminent domain.  In retaliatory action, the state withheld local impact funds from local governments that attempted to limit fracking near schools, parks and residential areas. (Rosenfeld, 2012).

Alabama regulates fracking from coalbeds through a program approved by the US EPA in 2000.  The regulation established a registration program with administrative costs passed to well owners at $175 per well (Rogers S. M., 2009).  The registration does include an exemption from disclosure of the proprietor’s secret fracking fluid components.

In an effort to regulate fracking fluid components, a bill similar to California’s AB591 passed in Wyoming in 2010 (Kusnetz, 2010).  Wyoming established the regulation to prevent US EPA from regulating wells under federal standards.  This law, however, includes a loophole that allows extraction companies to exempt certain chemicals they consider industry secrets (Fugleberg, 2011).  Although the provision was not expected to be used much, in the first year, companies used the exemption on 146 occasions (Kusnetz, 2010).  This overuse of regulatory exemption indicates that fracking fluid components would evoke a strong response from the community that carries the risk of contamination.

Three other states - Arkansas, Pennsylvania and Tennessee - require limited disclosure of fracking chemical use, but the disclosed information is not available to the public (The Wilderness Society, 2011).  The Wilderness Society stated in their survey of state regulations that “almost all states where drilling occurs have not taken steps to ensure that the public…know what is being injected underground during natural gas drilling. (The Wilderness Society, 2011)
New York State took a preemptive stance by placing a moratorium on fracking until the EPA releases its study of the practice.  Formerly a two-year ban was extended by the Assembly due to delays in the EPA study, now expected in 2015.  Now the moratorium waits for Senate approval (Energy-Solutions-Forum, 2013).

In the past couple of months, Illinois put together a coalition of industry and environmental groups in an attempt to create strict fracking regulations.  The industry pulled out, however; due to fresh water-well unions’ demands that a certified water contractor be on-site until the industry educate their employees and comply with the regulation fully.  The state has two moratorium bills that have not made it out of committee.  Both require studying fracking impacts for two years prior to establishing regulations (Wernau, 2013).

Regulations in California

In California, the fight has just begun.  The Federal Bureau of Land Management (BLM) started selling land parcels to oil industry in several counties.  Unfortunately, these land deals are under federal regulation.  By reneging on their chemical disclosure requirements and air quality compliance standards, the Obama administration catered to industry demand (Broder, 2012).

DOGGR, under public scrutiny, initiated a study of the practice and announced that draft regulations would be published in January 2013, with adoption of final regulation by August 2013 (Hagstrom, 2012).  In December 2012, a preliminary proposal by DOGGR received a tepid reception from environmental groups.  The Sierra Club and other environmental organizations sued DOGGR in October 2012, demanding that oil and gas exploration, particularly fracking, should trigger an Environmental Impact Report (EIR) process under the California Environmental Quality Act (CEQA) (Hagstrom, 2012).  Currently this activity has enjoyed categorical exemption as a ‘minor alteration’ to land (Hagstrom, 2012).

In February 2011, California Assembly Members Wieckowski and Butler introduced fracking regulations AB591 and AB972 respectively.  The first would require registration of all oil and gas production wells while the second bill set up a moratorium on fracking until the state studied this extraction method and its environmental risks.  Both bills moved quickly through the committee process in the 2011-12 legislative session.  Although the bills died before reaching the Appropriation Committee due to industry pressure, they may be the basis for future legislative action (Mills, 2011).
In December 2012, The Sierra Club and The Center for Biological Diversity filed a lawsuit that requires an EIR for fracking activity, which DOGGR currently exempts.

In the meantime, oil companies are purchasing Bureau of Land Management parcels.  To date, BLM sold thousands of acres in Monterey, Kern, Fresno and San Bonito Counties (BLM, 2012).  These leases are subject to NEPA (National Environmental Policy Act) under federal law.  However, since a prolonged contract agreement could stifle industry progress, a tiered process evaluates EA (environmental assessment) at each step of the land development.  These EAs list possible environmental degradation but they leave the critical oversight to local air and water boards. (Bureau of Land Management, May 8 2013 Oil & Gas Lease Sale Environmental Assessment, 2012)

Pending Bills 2013

In the current legislative session, there are several bills addressing fracking concerns.  These new proposed fracking regulations are:
AB 7, introduced by Assembly Member Bob Wieckowski would require standardized rules for construction, public notification and chemical disclosure adopted by January 1st 2014 (Ollison, 2013).
AB 288, introduced by Assembly Member Marc Levine, requires DOGGR to establish a fracking specific permit process and authorizes DOGGR to collect a fee for regulation costs.
Three Assembly Members from fracking affected areas, Richard Bloom, Holly Mitchell and Adrin Nazarian introduced AB 1301, AB 1323 and AB 649.  These bills would place a moratorium on fracking until a study of its impacts would establish the conditions permitting this practice (Nowicki, 2013).
AB 669, introduced by Assembly Member Mark Stone, proposes that a regional water quality board approve a plan for disposal of wastewater prior to fracking activity (Ollison, 2013).
AB 982, introduced by Assembly Member Das Williams, would establish a ground-water monitoring plan administered by DOGGR and the Regional Water Quality Control Board for every well employing fracing activity.  These plans must include a description of ground water in the particular location, disclose fracking fluid components and establish oversight of fracking activity to detect contamination.

SB 4, introduced by State Senator Fran Pavley, which at first required chemical and water use disclosure, was amended to include a moratorium prior to an impact study as well as a specific registration for fracking activity.  The bill requires the Natural Resources Agency to complete the study by 2015; however, if not completed in time the bill extends the moratorium until the study’s completion (Seifried, 2013).
SB 241, introduced by Senator Noreen Evans, would impose a severance tax on oil production (Ollison, 2013).
SB 395, introduced by Senator Hannah-Beth Jackson, would regulate fracking “produced water” (overflow).  The bill defines “produced water” as a hazardous waste and authorizes the Department of Toxic Substances Control (DTSC) to regulate fracking fluid overflow (Seifried, 2013).
In such a jumble of proposals, it is hard to imagine a coherent and comprehensive legislation emerging.  The multitude of approaches to this problem, illustrate the complexity of this issue and the numerous problems resulting from fracking.  Regulations would help curb some environmental damage but it will not significantly cut water use or the problems resulting from produced water.

The Precautionary Principle

The precautionary principle is a legal approach that dictates an assessment of the hazards related to a product or a practice and applies preventive measures before approving industrial production.  According to this principle, the burden of proof for harm to people and/or the environment lies with the industry.  This approach attempts to mitigate possible risk prior to the harm done since it’s difficult to “clean up the mess” once it’s done.  The European Union had made this principle into a statutory requirement.

The California bills proposing to study fracking before continuing the practice are an example of the precautionary principle in practice.  New York State effectively acted within the spirit of the precautionary principle by continuing the fracking moratorium until the EPA publishes its study.
Legal implications of the precautionary principle would translate risks to a weighted burden of proof.  Anticipating the magnitude and probability of harm would shift the burden of proof to the industry.  The industry must prove that their practices are safe.

In the US, the principle could also compliment the anticipatory nuisance doctrine.  Environmental damage is legally difficult to litigate since the claimant must show causation.  However, the nuisance doctrine can help neighbors of fracking activity receive compensation for harm and loss to property value.  Thereby, achieving legal success prior to regulation expected when the EPA study is released in 2015 (Lees, 2012).

Chapter 5 – Political Feasibility for a Ban

The Current Political Landscape

For the past three years, environmental groups have ramped up a campaign against “fracking as usual” in California.  The Center for Biological Diversity and Food and Water Watch and Credo gather signatures for banning the practice, while other groups inform their members and push for regulations.

The groups are fragmented in their approach but unified in their aim, to protect California from environmental harm.  The Environmental Defense Center is calling for a moratorium on fracking until adequate regulation is in place.  The League of Women Voters also supports tighter regulations.  DOGGRs proposed regulation lacks full disclosure of fracking chemicals and provides little time for public notification (Ratcliff, 2013).

Santa Barbara County Supervisor Doreen Farr said, “We heard from everybody, city dwellers, county dwellers, farmers, ranchers, vintners, water districts, in addition to those environmental groups that always follow oil issues very closely.”  The board passed amplified requirements for land use code for fracking.  People are concerned about water contamination, water scarcity and lack of disclosure, all of which diminish public confidence in the industry (Rivers, 2013).

Creating the Campaign’s Strategy and Message

Environmental organizations have won and lost campaigns based on the strength and inclusivity of their message.  Introducing images and concepts from other spheres of life broadens the support and increases the impact of a campaign.  When John Muir created the image of the “cathedral of redwoods” invoking a religious experience, it resonated with the public.  When Lois Gibbs struggled to relocate the Love Canal residents, her campaign gained authenticity and authority due to her own child’s health issues.  She was protecting her son, which is a powerful image.

The campaign to ban fracking needs to include a broad spectrum of people without losing the impact of the message.  Environmentalists must remember that farmers are an integral icon in American culture and they cannot afford to isolate or alienate California farmers.  Prop 37 was defeated in the past election cycle, in part, by the image of the concerned farmer that the opposition to GMO labeling presented correctly, or not, but certainly effectively to the California voters.  Farmers have been at odds with environmental groups over water issues for decades.  Environmentalists must create new alliances in order to include the farmers of the San Joaquin Valley in this struggle.  Farmland water is at risk; that message has to originate and be articulated by the farming community, not the environmental movement.  The Valley’s community has more legitimacy in their complaints about water contamination, since the environmental movement is not associated with that location.  The farmers are fighting to protect their land and that message is compelling and vital to this campaign.

Pointing out pollution levels and ground water contamination is only the beginning.  The real conflict is the economic one.  Environmental groups must expand their arguments to include green job creation and the narrow scope of economic benefits that fossil fuels provide.

A Proposition to Ban Fracking

As indicated by the slough of regulation bills this year, fracking poses a complex problem.  A proposition for a ban on fracking could provide an alternative legislative avenue.  Analyzing previous proposition’s success and failure could shed light on the outcome of such an effort.  A suitable comparative model is the voting record of Prop 23.  Prop 23 can provide the analytic basis for a fracking ban campaign because its relation to the oil industry.

Proposition 23 was drafted by the oil and gas industry in an effort to halt AB 32’s GHG reduction measures until unemployment drops below a certain level for a whole year.  This attempt to derail GHG controls is the mainstay of an industry bent on profiting from a highly polluting resource.  Fortunately, the proposition failed and AB 32 is implementing systems to decrease GHG.

The fall 2010 election demographics would present a comparable election circumstance with fall 2014, being mid-cycle presidential and gubernatorial election.  Understanding the demographic make-up would allow a reasonable comparative model.  In 2010, the high turnout of almost 60 percent included a higher percent of Latino vote than ever before (McGreevy, 2010).

California’s voters rejected Prop 23 by a wide margin, 38 for and 62 against.  Among the different ethnic groups emerges a picture that contradicts common assumption about who is an environmentalist.  Incidentally, the segments of the state population that presented the strongest opposition to the proposition were people of color 73 percent compared to 57 percent of whites; not your white, middle class, Birkenstock wearing Sierra Club member.  Community grass-roots organizations such as the Ella Baker Center for Human Rights and the Asian Pacific Environmental Network (APEN) along with many others connected with the diverse ethnic and social mix that makes up the California population (Hertsgaard, 2012).

A 2010 Los Angeles Times/USC poll found that 50 percent of Latinos and 46 percent of Asian-Americans “personally worry a great deal about global warming,” compared with 27 percent of whites.  Likewise, significantly more Latinos and blacks see air pollution as a serious health threat, according to the last three years of annual statewide surveys by the nonpartisan Public Policy Institute of California. (Hertsgaard, 2012)  Therefore, a “get out the vote effort”, media campaigns and organizational out-reach must cover a wide spectrum of communities and create inclusive messages.


“Fracking is an environmental nightmare,” said Dan Jacobson, legislative director of Environment California.  “It pollutes our water, contaminates our air, destroys our beautiful places and keeps us addicted to fossil fuels.  We need to ban fracking now.” (Nowicki, 2013)

 Although fracking has been in California for over 50 years, the Monterey Shale Formation reserves would increase the fracking activity to levels not seen before in the area.  Since the industry has enjoyed exemption from environmental review, it is difficult to assess the pollution and environmental degradation it has caused.  Nevertheless, there are enough incidents to indicate that the industry is not exceedingly concerned with their environmental impacts.  Furthermore, their efforts to suppress regulation diminish the public trust.

The oil industry’s boom and bust economy diverts resources from the more productive renewable energy.  The goals set by AB32 are not consistent with fracking operations since extracting heavy crude conflicts with California’s GHG standards.  In addition, investing in green energy would boost California’s competitive edge.
Finally, fracking uses scarce water resources that California cannot adequately provide.  This practice diminishes the state agricultural capacity, with very little to show for the high water demand.  For such small economic gains at such large environmental costs, a ban on fracking would free water resources and funds for a sustainable economic future.


I would like to recognize and thank Jillian Harris for her GIS map skills, of these distinct and insightful images of the Monterey Shale Formation.

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  1. Hydraulic fracking should be banned because study say that this process contaminates the ground water and make it unfit for drinking .

    Hydraulic Installation Kits

    Bruce Hammerson

    1. Yes that is absolutely correct. We don't really have a grasp on industry use of water in general let alone the oil and gas sector.