On December 30, 2014, the California Office of Administrative Law (“OAL”) approved the Final Permanent Well Stimulation Treatment Regulations (“Permanent Regulations”).  The regulations go into effect on July 1, 2015, and the Interim Regulations, which were operative all of last year, will remain the governing law in the meantime.  By finalizing the Permanent Regulations, California leads the way with the most stringent, comprehensive hydraulic fracturing (“fracking”) regulations in the country.

The Permanent Regulations are the result of multiple regulatory revisions and reflect extensive input from the public, industry, and various state agencies. Please see our oil and gas resources page for more information about the development of the Permanent Regulations.

The Permanent Regulations implement Senate Bill 4 (“SB 4”) which created a comprehensive regulatory scheme for well stimulation treatments in the state.  SB 4 requires the Division of Oil, Gas, and Geothermal Resources (“DOGGR”) to ensure that well stimulation is conducted safely through a permitting scheme, and mandates operators to comply with public disclosure requirements and neighbor notification.  Further, DOGGR was tasked with creating a website to facilitate public disclosure of well stimulation information, prepare an Environmental Impact Report (“EIR”), and oversee an independent scientific study of the impacts of fracking.  The State Water Resources Control Board (“Water Board”) also has a significant regulatory role: the Water Board must approve operators’ groundwater monitoring plans, develop model groundwater monitoring criteria, and implement a regional groundwater monitoring plan.  The Water Board also supervises and reviews water quality sampling and testing at permitted wells.

The following is a summary of the most significant revisions to the Permanent Regulations.  This list does not exhaust all requirements of the regulations, but merely highlights the changes between the second revision and the Permanent Regulations.

  • “Single-Project Authorization” defined: A “single project authorization is a single Division approval for multiple applications for permits to perform well stimulation treatments.”  (Section 1751.)
  • Well stimulation permit application: The requirements for the application are described in detail, including the requirement of identification of all wells and the anticipated water source for the operation.  (Section 1783.1.)
  • Evaluation prior to a well stimulation treatment: The operator must perform the following prior to a well stimulation treatment: cement evaluation, pressure testing of the well, well stimulation treatment area analysis, and well stimulation treatment design.  (Section 1784, 1784.1, 1784.2.)
  • Monitoring during a well stimulation treatment: The operator must monitor the following during the well stimulation treatment: the surface injection pressure, the slurry rate, the proppant concentration, the fluid rate, and the pressure of each annuli of the well. (Section 1785.)  Further, the operator must monitor and evaluate seismic activity in the vicinity of the hydraulic fracturing activity.  (Section 1785.1.)
  • Well maintenance and cleanout history: The operator must provide a description of the well maintenance activity and supply necessary data to DOGGR within 60 days of completing “an operation on a well that involves emplacing fluid containing acid in the well.”  (Section 1777.4.)
  • Disclosures: Within 60 days after cessation of a well stimulation treatment, the operator must publicly disclose specified information including the location of the well, “measured and true vertical depth of the well,” and the “source, volume, and specific composition and disposition of all water associated with the well stimulation treatment.”  (Section 1788.)  DOGGR will publicly post this information on their website and on FracFocus.org.
  • Trade Secrets: SB 4 limits the information that can be considered a trade secret for purposes of disclosure.  In addition, trade secret information must be disclosed in the case of a medical injury related to well stimulation treatment, and trade secret information must be included in the operator’s permit application to DOGGR.  (Pub. Res. Code, section 3160(j).)
  • Storage and Handling of Well Stimulation Fluids: Well stimulation fluids are subject to strict regulatory requirements, including “secondary containment requirements.”  The operator must create and adhere to a Spill Contingency Plan, and must notify the Regional Water Board if a spill occurs.  Further, well stimulation fluids and waste must be properly stored, and are prohibited from being stored in unlined sumps or pits.  (Section 1786.)

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.