In his SB 4 signing message (see September 20, 2013 post), Governor Brown promised certain “clarifying” amendments for SB 4, and his administration has begun the process of seeking those amendments.

Governor Brown’s proposed legislation would amend SB 4 in three major categories:

Permanent Regulations

  • DOGGR’s deadline for draft permanent regulations will be pushed from January 1, 2015 to July 1, 2015, in order to better correspond to DOGGR’s existing deadline to complete its statewide EIR on well stimulation activities.  This means that the Interim Regulations will stay in place until that time as well.

Environmental Review

  • The proposed legislation would delete the provision that eliminates additional environmental review for a SB 4 well stimulation permit where the DOGGR Supervisor determines that an applicant already has complied with the California Environmental Quality Act (“CEQA”).  The proposed legislation states that SB 4 does “not prohibit a local lead agency from conducting its own EIR.”  Currently under SB 4 (Pub. Resources Code § 3160(d)(2)(C)), where the DOGGR Supervisor determines that the activities proposed in the well stimulation treatment permit have met all the requirements of CEQA, “no additional review or mitigation shall be required.”  Considering California is a home-rule state (see March 3, 2014 post), local agencies are already within their powers to require the issuance of a conditional use permit to conduct oil and gas drilling and well stimulation activities, thereby triggering environmental review at the local level. As such, this addition appears to be a restatement of existing law. Nevertheless, this was a provision that the environmental community strongly supports as a necessary revision to SB 4. 
  • Section 3161(b)(4)(C) prohibits DOGGR’s SB 4-mandated EIR from conflicting with any local lead agency’s EIR that is certified by July 1, 2015.  Currently, Kern County is conducting an EIR at the local level for its county ordinances relating to well drilling and permitting, and many postulated that the Kern County EIR could serve as a model or basis for a statewide EIR.  Governor Brown’s proposed legislation would delete this prohibition, meaning that DOGGR’s EIR and Kern County’s EIR could conflict.  For example, if Kern County identifies an environmental impact as part of oil and gas extraction and determines that it can be sufficiently mitigated, such a determination will not necessarily be preclusive on DOGGR’s later CEQA process under SB 4.  This clarifying amendment might satisfy environmentalists who did not want the Kern County CEQA process to dictate DOGGR’s CEQA process for well stimulation treatments, but the amendment undoubtedly will lead to additional uncertainty, litigation and delay for industry.

Groundwater Monitoring

  • DOGGR’s Interim Regulations – promulgated under the authority of Section 3161(b)(6) – state that if wells penetrate exempt aquifers, groundwater monitoring is not required. The proposed legislation would further clarify that monitoring is not required only where the well solely penetrates exempt aquifers. As the groundwater monitoring plans have been a source of headache for the industry, due to a lack of guidance in the regulations, this is unlikely to assuage much of the remaining concerns over how to obtain an approved plan.
  • Where there is an absence of a regional groundwater monitoring program, and an area-specific groundwater monitoring plan has yet to be approved, DOGGR may approve a permit for well stimulation so long as that area-specific plan is attached. However, well stimulation cannot occur until that plan is approved.

For more information on the current state of regulations and practical advice on navigating the SB 4 Interim Regulations period, see our SB 4 Resources page.