On October 8, the California Department of Conservation (“DOC”) released a Renewal Plan for Oil and Gas Regulation (“Renewal Plan”) to revamp its regulatory program.  The goal of the Renewal Plan is to continue the DOC’s focus on environmental protection and public health, and it will shape the DOC’s regulatory decisions for the next two years.

The Renewal Plan contains four objectives: (1) regulatory overhaul, (2) new regulations for “new realities,” (3) modernization of data management, and (4) ensuring a high-quality workforce.  California’s Underground Injection Control (“UIC”) program is a key focus, and the Renewal Plan calls for a review of aquifer exemptions.  Exempt aquifers are those that are permitted to receive injection of Class II fluids (fluids associated with the production of oil and gas).  The review of exempt aquifers will ensure that Class II fluids are not being injected into potential drinking water sources.

Another focus is data modernization.  The DOC is launching a comprehensive online reporting database and establishing an Emerging Technologies and Regulations Unit to anticipate future regulatory needs.  In addition, the Renewal Plan directs workforce changes, including the reorganization of the Division of Oil, Gas and Geothermal Resources (“DOGGR”).

David Bunn, Director of the DOC, reported that the Renewal Plan will remedy past “shortcomings” of the oil and gas permitting scheme in California.  These regulatory issues were identified in a report on the UIC program which was submitted by the DOC to the Legislature, as required under Senate Bill 855 (2010).  For example, the report states that a “relatively small number of wells” were granted permits by the DOC in areas of protected aquifers, as classified by the federal Safe Drinking Water Act.  In a news release accompanying the Renewal Plan, Bunn stated “[o]ur Renewal Plan goes beyond fixing the problems of the past and creates an adaptive, effective program that puts first California’s public safety and environmental health.”

Stay tuned for the next steps in the implementation of the Renewal Plan, which includes a review and revision of all DOC regulations.  DOC will begin a formal rulemaking process in January 2016.

Authored by Mike Mills (michael.mills@stoel.com) and Shannon Morrissey.  Ms. Morrissey is not currently licensed to practice law; California bar application pending.

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