Yesterday, the California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources (DOGGR) released what they are calling a “discussion draft” of a rule regulating hydraulic fracturing.  The draft rule imposes new requirements specific to fracking operations, including testing, monitoring, disclosure and fluid handling obligations. 

Current state rules require an operator to obtain authorization from DOGGR before drilling an oil and gas well.  DOGGR grants approval based on the proposed well construction and authorizes the depth and type of the well (i.e. production, injection or disposal).   This authorization allows the operator to construct and operate the well, including fracking activities, so long as the well meets regular mechanical integrity tests.

The discussion draft rule, as written, would not require additional approval to conduct fracking operations, but the rule would require operators to evaluate the integrity of the well and provide notice before fracking, monitor the well during fracking, and publicly disclose certain information when fracking is complete.  Before fracking a new or existing well, the rule would require operators to evaluate the integrity of the well based on the proposed fracking radius and design the fracking treatment accordingly to prevent groundwater contamination.  At least 10 days before commencing fracking operations, the operator would need to provide notice to DOGGR, including the evaluation and fracking treatment design and an estimate of the volume and pressures of fracking fluid.  The rule would also require continuous monitoring of several parameters relating to well integrity during fracking.  In addition to regulating activities in the well, the rule would impose fracking fluid storage and handling requirements similar to those for petroleum or other hazardous materials.  After fracking activities are complete, the rule would require monitoring for at least an additional five years and public disclosure of the volume and components of the fracking fluid.  The rule would allow for trade secret protection but would require disclosure to DOGGR or health professionals under certain circumstances.

The draft rule focuses on disclosure and on potential impacts to the surface and groundwater but does not address potential air emissions or seismic activity.  As DOGGR indicates in a set of FAQs released with the rule, the local air quality control districts are evaluating the need for further regulations relating to fugitive air emission associated with fracking activities.  DOGGR also takes the position that induced seismicity is not a concern associated with fracking, perhaps in response to the proposed assembly bill that would require DOGGR to consider any seismicity impacts in its fracking rulemaking (see December 9 post).  Rather, DOGGR indicates that reports of induced seismicity relate to long-duration, high-volume injection of waste fluids into disposal wells that are already addressed by the state’s underground injection control regulations.

Given that the draft rule imposes further requirements without significantly restricting fracking operations, environmental groups are likely to seek more limitations on fracking than the draft rule provides.  Also, with a Democratic supermajority in the state legislature, there is the possibilty that lawmakers may seek to further restrict fracking activities by statute.

Although the rule does offer some specific benchmarks associated with pre-testing and monitoring of fracking activities, DOGGR emphasizes that the “discussion draft” of the rule is intended only as a starting point for stakeholder discussions and anticipates the formal rulemaking process will commence in early 2013.  Given the public attention to fracking, we can expect potentially significant revisions to the draft rule as the rulemaking process progresses.  Meanwhile, comments on the draft rule may be emailed to comments@conservation.ca.gov.