On September 11, 2013, the California State Assembly passed Senate Bill 4 bill which would regulate hydraulic fracturing operations and require disclosure of the chemicals used in the process to the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation.

This bill now returns to the State Senate (where it was originally approved in May 2013); and, if this amended version is passed by the Senate, the bill will be sent to Gov. Jerry Brown for signature.

Additional provisions include:

  • On or before January 1, 2015, the Natural Resources Agency must conduct and complete an independent scientific study on well stimulation treatments, such as hydraulic fracturing and acid well stimulation.

    The scientific study is to evaluate potential risks from these treatments, including groundwater contamination, surface water pollution, greenhouse gas emissions, air quality, induced-seismic activity, and effects on wildlife, plants and habitat.

  • On or before January 1, 2015, the Division would be required to adopt rules specific to well stimulation, including governing the construction of wells and well casings and the full disclosure of the composition and disposition of well stimulation fluids.
  • A well owner or operator must apply to the Division for a well stimulation permit prior to performing a treatment.

    Within 5 business days of approving the one-year permit, the Division must post the permit on a publicly accessible portion of its internet web site.

  • At least 30 days prior to well stimulation, the operator must provide a copy of the approved permit to specified tenants and property owners “whose property line location…is (i) within a 1,500 foot radius of the wellhead [or] (ii) within 500 feet of the horizontal projection of all subsurface portions of the designated well to the surface.”

    The operator must provide notice to the Division at least 72-hours prior to the actual start of well stimulation in order for the Division to witness the treatment.

  • The supplier of the well stimulation treatment must provide the operator within 10 days of the process certain information regarding the fluids used.

    Within 60 days of the completion of the stimulation, the operation must post or cause to be posted to a publicly accessible web site the fluid information.

    The Division would be required to begin development of its own web site for this information (to be completed by January 1, 2016).

    Until then, an alternative website can be used (i.e., FracFocus.org), but the Division must obtain the information posted to the alternate web site and make it available to the public electronically within 15 days of the alternate posting.

    A supplier claiming a trade secret must disclose the composition to the Division and substantiate its claim by identifying the extent to which the information is known by its employees, the measures taken to protect the trade secret, the value of the trade secret, and the cost of developing this information.

    The Division would not disclose trade secret information except in specific situations, including medical emergencies.

  • Chemical information to be disclosed includes: list of names, Chemical Abstract Service (CAS) numbers, and maximum concentration in percent by mass of each chemical constituent; the trade name, the supplier, concentration, and a brief description of the purpose of each additive contained in the fluid; total volume of base fluid used; the source, volume, and specific composition and disposition of all water used as a base fluid and all water recovered; and the specific composition and disposition of all well treatment fluids.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright’s Energy Practice Group.