On January 24, 2013, the Center for Biological Diversity (CBD) filed a challenge, in California’s Alameda County Superior Court, claiming that California’s Underground Injection Control program requires the California Division of Oil, Gas and Geothermal Resources (DOGGR) to regulate hydraulic fracturing. CBD seeks declaratory and injunctive relief.
DOGGR’s Fracking Exemption. DOGGR is the state agency with primary regulatory authority over oil and gas operations in California and operators must obtain a permit from DOGGR prior to drilling oil or gas wells. Operators, however, are not required to provide notification prior to conducting hydraulic facturing at a well. DOGGR has determined that the Underground Injection Control program under California Code of Regulations Sections 1724.6 through 1724.10 does not apply to fracking. Recently, through the issuance of Pre-Rulemaking Discussion Draft,1 DOGGR took an initial step in developing a new regime to regulate fracking operations. Under this new regime, fracking would be subject to notice, testing, monitoring and reporting requirements. The Discussion Draft would also codify DOGGR’s exemption for “well stimulation, including hydraulic fracturing” from California’s Underground Injection Control program.
CBD’s Challenge. CBD argues that under current California law, DOGGR is obligated to monitor and supervise all forms of underground injection, including fracking. CBD further alleges the Public Resource Code’s mandate that DOGGR supervise drilling operations “so as to prevent, as far as possible, damage to life, health, property, and natural resources,” requires DOGGR to regulate fracking. CBD seeks a declaration that DOGGR’s failure to regulate fracking activities under the Underground Injection Control program and its alleged failure to prevent impairment of public resources violates state law. CBD also seeks an injunction prohibiting DOGGR from issuing new permits for fracking activities until it complies with the law. While the complaint mentions the Discussion Draft, CBD does not specifically challenge it because it would be premature to do so.
Commentary. This complaint is the second challenge in six months that the CBD has filed against DOGGR relating to its regulation and oversight of hydraulic fracking. The first complaint challenged DOGGR’s issuance of oil and gas drilling permits without completing environmental impact reports for each new hydraulic fracking project, as allegedly required by the California Environmental Quality Act (CEQA). In the first complaint, CBD also requested that DOGGR be enjoined from issuing any further drilling permits until it achieves CEQA compliance by appropriately considering and mitigating the impacts associated with hydraulic fracking. This CEQA case is still pending.
Both of CBD’s lawsuits challenge DOGGR’s failure to regulate fracking under existing California law. However, DOGGR has initiated a process, through the issuance of the Discussion Draft, which is anticipated to result in the adoption of new fracking regulations. As presented in the Discussion Draft, DOGGR would require operators to provide DOGGR and the appropriate regional water quality control board with at least 10 days’ notice prior to commencing fracking activities, and describes the type of information that might be required in the notice. DOGGR would then be required to post a public notice of the proposed activities on its website within seven days of receiving the notice. The Discussion Draft also prescribes pre-fracking testing and evaluation activities, and monitoring requirements during and after fracking operations, as well as requirements for the storage and handling of fluids associated with fracking.2
The Discussion Draft does not “kick off the formal rulemaking process,” but is likely to lead to the more formal proceeding. Therefore, environmentalists, industry and lawmakers will have substantial opportunity to mold and shape the regulations before they go into effect. The battle of if and how fracking will be regulated in California is likely to be fought on multiple fronts, including the courts, at DOGGR and potentially in the state legislature.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:Gannon-Ella
2 See also DOGGR’s “Narrative Description of Hydraulic Fracturing Draft Regulations” available here.
This article was originally published by Bingham McCutchen LLP.