More job transfers blamed on fracking regulations

Published 03/28 2014 07:17PM

Updated 03/28 2014 11:29PM

KERN COUNTY - Two companies, Halliburton and Slumberger, announced Friday they are transferring a combined 90 workers out of Kern County because of new state fracking regulations. This is in addition to the 110 layoffs and transfers by Baker Hughes, announced Thursday.

Companies said the problem is permits. Before new fracking regulations, service companies like Baker Hughes could frack oil wells without permits. Now they need a permit, but say new groundwater monitoring is delaying approval.

As described by the industry, hydraulic fracturing is when water, sand and chemicals are pumped into an oil or gas well to stimulate production in dense rock. Officials said it's a practice that's been done without a permit for 50 years in Kern County, until January of this year when Senate Bill 4 took effect.

"It is the most comprehensive, stringent hydraulic fracturing stimulation regulations in the nation," said Nick Ortiz of the Western States Petroleum Association or WSPA.

As of January 1st, companies need a permit from DOGGR. So, 17 News asked DOGGR how many applications have been received and how many permits have been issued. The Division of Oil, Gas and Geothermal Resources said it's received 398 applications. Of those, DOGGR said 258 were approved, 15 were withdrawn by the operator, and 125 were incomplete and returned. DOGGR said this is mostly because the applications aren't showing sufficient information about groundwater quality protections near the proposed frack sites, one stipulation of the new rules.

"It's bureaucrats in action. That's what it is unfortunately," said Les Clark of the Independent Oil Producers' Agency.

The State Water Resources Board said oil operators have two options to comply with the groundwater monitoring aspect of the new fracking regulations: ask for an exemption due to poor groundwater quality or create a groundwater management plan.

The State Water Resources Board said most of the applications received are incomplete because nearly all oil companies were asking for an exemption on groundwater monitoring.

"We got lots of them that said we don't think there's any water here so we don't need a groundwater monitoring plan," said Jonathan Bishop, Chief Deputy Director of the State Water Resources Board. "A statement to that effect isn't sufficient."

The State Water Board said it's issued no permits for fracking sites with a Groundwater Monitoring Plan, but said it's working with companies so they can qualify for a permit.

"I know it will be a different story within a few months," said Bishop.

Kern County companies said they've had to cut or transfer 200 local jobs because of the delay. Baker Hughes said it laid off or transferred 110 employees. Slumberger said it transferred 20 employees. Halliburton said it transferred 70 employees.

"We continue to work with all stakeholders to ensure a stable regulatory climate that protects the environment and California's economy," said Chevalier Mayes, Public Relations Representative for Halliburton in an e-mail.

"To say it's not having an impact on oil producers in Kern County that's not true. It is having an impact," said Clark.

"We do take seriously people's livelihood," said Bishop. "I think it's disappointing that the operators waited until after SB4 went into effect to start thinking about what it required."

The Division of Oil and Gas said the new regulations don't seem to be stopping drilling. DOGGR said as of last year at this time, 924 wells had been drilled. This year DOGGR said there have been 923 wells drilled.

The Department of Conservation's Chief Deputy Director Jason Marshall, in charge of DOGGR, released the following statement on the claim that SB4 is hurting Kern County oil business.

"DOGGR staff has organized and/or participated in multiple workshops providing guidance to operators, and is in constant conversation with industry. The Division of Oil, Gas, and Geothermal Resources is also working with the State Water Quality Control Board and the regional water boards to ensure operators submit and implement groundwater monitoring plans that meet the public health and safety goals of SB 4. This is a new process and we committed to getting it done right to keep projects moving while enforcing the law and protecting public health, safety, and the environment," said Marshall.

WSPA's President Catherine Reheis-Boyd also released a statement saying: "While any new regulatory structure can prove challenging, WSPA's members are working through all required processes to obtain the necessary approvals for well stimulation operations. Furthermore, we appreciate the hard work and diligence shown by all the state agencies involved, to implement aspects of SB4 as expeditiously as possible."

But, how did Kern County lawmakers vote on this new fracking law?

Senator Andy Vidak, Senator Jean Fuller and Assemblywoman Shannon Grove all voted no. But Assemblymember Rudy Salas did not vote.

17 News asked Salas why he abstained. He did not answer that question, but did release a statement saying: "As I stated back in September, I support the safe and environmental practices for fracking, but did not support SB 4 because at that time we should have waited for DOGGR to develop their regulations and come to their conclusions before taking legislative action. It was this type of confusion that I had hoped would not occur. As a result, I have written to State Natural Resources Agency Secretary Laird to convene a meeting to address the confusion and frustration with the current permitting practices and implementation regarding fracking and well stimulation at the department."

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