The California Department of Conservation’s Division of Oil, Gas and Geothermal Resources and the California Council on Science and Technology recently released studies that examine the impact of hydraulic fracturing of oil and gas resources in California, but it is not yet know whether these studies will lead to changes to California’s regulations on this practice.

Two long-anticipated reports that concern hydraulic fracturing operations (commonly referred to as “fracking”) were released on January 14, two weeks after California issued its final proposed regulations on the subject.^[1] The first is the draft environmental impact report (EIR) prepared by the California Department of Conservation’s Division of Oil, Gas and Geothermal Resources (DOGGR), which provides detailed information regarding potential environmental impacts associated with hydraulic fracturing in the state. The second report is the first of a three-volume independent scientific assessment by the California Council on Science and Technology (CCST), which surveys past and current hydraulic fracturing operations in California and assesses where and to what extent hydraulic fracturing operations will continue.

Senate Bill 4 (SB 4), the law signed by California Governor Jerry Brown in September 2013 that for the first time regulated the practice of hydraulic fracturing within the state, mandated the preparation of both reports. However, because both reports were released after California issued its final proposed regulations on hydraulic fracturing, it is unclear what effect these reports and additional reports yet to be issued may have on the current and future use of this practice in California. It is not known, for example, whether the DOGGR might revise the regulations, scheduled to go into effect on July 1, based on the reports or whether the reports might lead to future amendments of California’s regulations or even SB 4 itself.

The EIR analyzes hydraulic fracturing’s potential impacts that will take place in California under the DOGGR’s proposed permanent regulations. Although it considers broad issues that are applicable on a statewide basis, the EIR focuses on potential impacts at three specific oil and gas fields (the Wilmington, Inglewood, and Sespe Oil Fields, located in Los Angeles and Ventura Counties). The report dually informs the public of potential environmental impacts and provides regulatory agencies with information necessary to evaluate hydraulic fracturing permits once the proposed regulations take effect later this year. The EIR also considers hydraulic fracturing alternatives, which include an outright ban, limiting hydraulic fracturing to existing wells, and prohibiting it in urbanized areas. All of these alternatives, however, would require legislative action to amend either SB 4 or existing general plans and zoning ordinances.

Critically, the EIR finds that hydraulic fracturing has the potential to cause “significant and unavoidable impacts” to the environment in the areas of air quality, greenhouse gas emissions, biological resources, cultural resources, aesthetics, land use and planning, transportation of hazardous materials, and public and worker safety and has the potential for leaks from pipelines and hoses that carry fluids used in hydraulic fracturing operations. The EIR notes that all of these “risks” can be mitigated or prevented. The report also notes that seismic impacts may be reduced to a level of less than significant if certain measures are taken, including avoiding active fault zones, conducting ground monitoring, and preparing an Earthquake Response Plan. If implemented with all of the recommended mitigation measures, the EIR concludes that hydraulic fracturing is the “Environmentally Superior Alternative” because any decision to limit or prohibit the practice would necessarily require greater levels of imported oil and gas resources to meet projected demand, and the use of these alternatives poses social, political, and economic consequences at both local and national scales.

Volume I of the three-volume CCST study evaluates how hydraulic fracturing is presently used in California and where this process might enhance or enable oil and gas production in the future. The study concludes that the practice is not widespread and that almost all hydraulic fracturing in California occurs in the San Joaquin Basin in wells that primarily produce oil. Over the last decade, one-fifth of oil and gas production in California came from wells that had been hydraulically fractured in this area. Operators during this period fractured roughly 125 to 175 wells of the approximately 300 wells installed per month in the state. The study predicts that future oil recovery using hydraulic fracturing will be from expanded production in the San Joaquin Basin because a significant amount of oil remains in those reservoirs. The study further finds that hydraulic fracturing practices in California differ from those used in other states, primarily because of differences in the geology of the petroleum reservoirs. Typically, California reserves are much shallower and use vertical wells only as compared to those for producing oil from source rock in North Dakota, Texas, and elsewhere.^[2]

Hydraulic fracturing in California also uses significantly less water: 530 cubic meters of water per well, on average, compared to about 16,000 cubic meters used in horizontal wells in the Eagle Ford Formation in Texas and the 12,000 to 20,000 cubic meters used in the horizontal wells in the Marcellus Shale Formation in Pennsylvania. Consequently, certain practices and impacts of hydraulic fracturing in other states do not necessarily apply to hydraulic fracturing in California. However, the CCST report cites recent U.S. Energy Information Administration analyses that estimate California’s Monterey Formation to hold up to 15 billion barrels of oil. These reserves are almost entirely untapped because of limitations in the current technology. These abundant reserves could motivate development of available technologies, which could certainly involve the high-volume, high-pressure hydraulic fracturing practices used elsewhere. Furthermore, the report’s apparent encouragement of multiple well pads may suggest further development and use of horizontal drilling in California to achieve the benefits of this practice.

Volumes II and III of the CCST study are set for release by July 1. Volume II will discuss the effects of hydraulic fracturing on the environment and human health, and Volume III will present case studies to assess environmental issues and qualitative risks for specific geographic regions.

Whether the conclusions from the EIR and the CCST report will affect the final California regulations is unclear. Public concerns about hydraulic fracturing in California are not likely to be alleviated given the environmental impacts documented in the EIR. Indeed, the hydraulic fracturing rules were adopted before state regulators could fully consider the environmental risks discussed in the reports. The public review period for the EIR began on January 14 and will end on March 16. During this comment period, DOGGR will also conduct six public comment meetings throughout the state. It is required to certify the EIR by July 1, the same date that California’s final hydraulic fracturing regulations are scheduled to take effect.

_{[1]. For more information regarding the draft final regulations, refer to Morgan Lewis’s LawFlash “‘Final’ May Be a Misnomer for California’s Final Fracking Regulations,” available here.} 

_{[2]. According to the CCST, “California operations require smaller volumes of water because operators in this state fracture in relatively shallow vertical wells (less than 600 meters (m; 2,000 feet, ft) deep), with shorter treatment intervals than the horizontal wells common elsewhere. In about half the operations, the top of the fracturing interval is less than 300 m (1,000 ft) deep. The nearly exclusive use of predominantly crosslinked gel-based hydraulic fracturing fluids in California compared to less viscous gels and slickwater in other parts of the country also accounts for smaller fluid volumes.”}