On April 4, 2014, in a 5 to 2 vote with two members abstaining, the California Senate Natural Resources and Water Committee approved proposed legislation (Senate Bill 1132) that would place an indefinite moratorium on hydraulic fracturing and acidizing activities throughout the state, both onshore and offshore, until a sufficient state study on the threats and impacts of fracking is complete and regulations are in place to protect the state and its citizens.

This bill expands on the hydraulic fracturing law (S.B. 4) that took effect on January 1, 2014, which requires oil and gas companies to:

  1. apply for and obtain permits before starting fracking and other well stimulation operations,
  2. notify near-by landowners of these activities,
  3. disclose all chemicals used, and
  4. monitor groundwater and air quality.

In addition, SB-4 requires a scientific study on well stimulation treatments. “On or before January 1, 2015, the Secretary of the Natural Resources Agency shall cause to be conducted, and completed, an independent scientific study on well stimulation treatments, including, but not limited to, hydraulic fracturing and acid well stimulation treatments. The scientific study shall evaluate the hazards and risks and potential hazards and risks that well stimulation treatments pose to natural resources and public, occupational, and environmental health and safety.”
Under S.B. 1132, the S.B. 4-ordered study would be broadened to include the investigation of the potential impacts of well stimulation and increased oil and gas activity on the state’s efforts to meet its greenhouse gas reduction targets; impacts on private property and land use; health risks; economic costs and harms; potential risks to worker safety; potential effects on ground and surface water, looking at the risks for contamination and effects on water sustainability; evaluation of the risks posed by flowback fluids and byproducts generated by fracking; potential disruption of low income communities and communities of color; and other potential environmental, health, and economic effects on the state and its residents.

Within six (6) months of the completion of the study, a panel consisting of the heads of the Natural Resources Agency, the Air Resources Board, the California EPA, and the State Water Board, shall be convened to determine whether the study is complete and whether additional regulations are needed to protect the state and its people.

A tentative copy of the report would be released, allowing the public 60 days for comments. Once finalized, the report would be issued to the Governor and to the appropriate legislative committees. It will then be up to the Governor to decide if fracking and other well stimulation activities can safely resume and under what conditions.

Gov. Brown has not been amenable to similar suggested moratoriums in the past, citing the economic benefits of the oil and gas activities.

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