By Colby Bermel, POLITICO PRO CALIFORNIA
September 2, 2020
WELL, WELL, WELL: New oil and gas production drilling permit approvals are up 190 percent in the first half of 2020 compared to the same period last year, according to a Consumer Watchdog and FracTracker Alliance report provided to POLITICO.
According to the groups, the California Geologic Energy Management Division approved 1,354 new drilling permits for traditional oil and gas production from January through June, compared to 467 permits over the same period last year. Other extraction techniques are down from 2019, though: Enhanced oil recovery and support well permits are down 80 percent, while well stimulation permits, which include fracking, are down 77 percent.
Consumer Watchdog claimed credit for the decline in well stimulation permits, which came amid a nine-month moratorium that Newsom imposed after the groups revealed conflicts of interest at CalGEM’s predecessor last year. But the jump in traditional permits is what’s concerning to the groups, with Consumer Watchdog advocate Liza Tucker claiming that companies are increasingly applying for permits just to secure outside investment during the pandemic-driven decline in oil prices.
“The last thing California should be doing is abetting them to go deeper into debt without shielding Californians from the financial consequences of being left holding the bag on well plugging and cleanup if they go under,” Tucker said.
But the industry disagrees. Also citing CalGEM data, the California Independent Petroleum Association said well-plugging approvals from 2018 through 2020 haveexceededgreen lights for any production or maintenance activity. CIPA added that a trio of bills signed last fall —CA AB1057 (19R),CA AB1328 (19R)andCA SB551 (19R)— tighten management of idle wells, which industry argues is an equally, if not more, significant responsibility it has compared to production.
The data from CalGEM, which didn’t respond to requests for comment, isn’t totally representative, CIPA and the Western States Petroleum Association said, because applications and the conditions needed for various stages of operation fluctuate so much. WSPA spokesperson Kevin Slagle accused Consumer Watch and FracTracker Alliance of manipulating agency data “to attack the Newsom Administration and promote their off-oil agenda.”
“Let’s remember that any permits being issued are done so under the toughest regulatory environment in the world,” he added. “Our state’s recovery requires a healthy oil and gas industry. The impacts of reducing the production of affordable and reliable energy in our state hurt families, workers and the economies of communities where we operate.”