On Tuesday, March 10, California Environmental Protection Agency Secretary Matthew Rodriquez and California Natural Resources Agency (“CNRA”) Secretary John Laird testified before a joint State Senate committee hearing.  At the hearing before the Natural Resources & Water Committee and the Environmental Quality Committee, Rodriguez and Laird confirmed that there has been no drinking water contamination due to oil and gas disposal well injection.  This finding is reiterated in a memo from the California EPA: “To date, preliminary water sampling of select, high-risk groundwater supply wells has not detected any contamination from oil production wastewater.”  (Memo from Cal. EPA, at p. 1 (Mar. 2, 2015).)

DOGGR and USEPA Correspondence

On Monday, March 9, the U.S. Environmental Protection Agency (“USEPA”) sent a letter to California’s Division of Oil, Gas and Geothermal Resources (“DOGGR”) approving DOGGR’s plan to regulate Class II underground injection control (“UIC”) wells.  The USEPA’s letter responds to DOGGR’s letter to the USEPA which presented California’s plan to revamp its regulatory scheme for Class II UIC wells in order to come into compliance with the federal Safe Drinking Water Act (“SDWA”).  The USEPA stated that they are “pleased that you [California] have initiated action to implement the plan.”  (USEPA Letter to DOGGR, at p. 1 (Mar. 9, 2015).)

Class II wells are injection wells that dispose of fluids from oil and gas operations.  The SDWA prohibits injection from Class II wells into non-exempt aquifers: aquifers that are potential sources of drinking water or water for public works.  Due to “discrepancies and confusion” regarding the classification of UIC wells, out of 150,000 oilfield disposal wells in California, approximately 140 currently inject into non-exempt aquifers.  (Memo from Cal. EPA, at p. 1.)  DOGGR and the State Water Resources Control Board (“SWRCB”) have created a regulatory plan to ensure that California comes into compliance with the SDWA requirements for Class II wells.

The USEPA letter to DOGGR follows the shut-in of twelve UIC wells in California’s Central Valley on March 3.  The shut-in was a precautionary measure to ensure the protection of drinking water sources because there was only a potential chance of contamination, according to regulators.

DOGGR’s Plan for Regulation of UIC Wells

The primary component of the regulatory plan began in summer 2014: California is in the process of reviewing and monitoring most of the State’s injection wells, “prioritizing wells that were injecting into non-exempt, non-hydrocarbon-bearing aquifers.”  (Memo from Cal. EPA, at p. 5.)  As of March 2, 2015, the SWRCB has evaluated just over 200 wells of “highest concern to potential water supplies,” and has found no drinking water contamination.  (Id.)  Further, DOGGR is performing a second review of all new or expanded project permit applications in order to “provide another opportunity to correct any permitting errors.”  (Id.)  The agency is also enforcing a compliance schedule to eliminate injection into non-exempt aquifers which will be accomplished through a rulemaking.  DOGGR will initiate the rulemaking by April 1, 2015.

Additionally, DOGGR, in conjunction with the SWRCB and USEPA, is hosting aquifer exemption workshops for oil and gas operators to present the “data requirements and process for requesting an aquifer exemption under the Safe Drinking Water Act.”  The first workshop occurred on February 24 and the next is scheduled for March 24 at the Holiday Inn Long Beach Airport from 1:00 pm – 4:00 pm. See DOGGR’s website for more details.

Important Documents

• Letter from USEPA to Cal. EPA and CNRA, directing DOGGR to take action to remedy SDWA non-compliance (July 14, 2014)
• Letter from USEPA to DOGGR, providing direction for California’s UIC plan (Dec. 22, 2014)
• Letter from DOGGR and SWRCB to USEPA, setting forth regulatory plan to ensure that California’s UIC program comes into compliance with the SDWA (Feb. 6, 2015)
• Memo from Cal. EPA to Office of the Governor and California Natural Resources Agency, summarizing Cal. EPA’s Review of UIC Program (March 2, 2015)
• Letter from USEPA to DOGGR, approving UIC plan (March 9, 2015)

By Mike Mills (michael.mills@stoel.com) and Shannon Morrissey.  Ms. Morrissey is a Law Clerk with Stoel Rives LLP and is not currently licensed to practice law in California.