Consumer Federation of California

Sending the strongest signal yet that state lawmakers plan to take strong action this year to regulate hydraulic fracturing, an Assembly panel Monday passed three bills that propose to halt the oil drilling practice for up to five years while more studies on its environmental safety are conducted.

‘We have cause to pause,’ said Assemblywoman Holly Mitchell, D-Los Angeles, whose district includes the Inglewood Oil Field, the largest urban oil field in the country.

‘This is a situation that is crying out for regulation,’ said Assemblyman Richard Bloom, D-Santa Monica. ‘The best way to get everybody to the table is to impose a moratorium. That’s what will work.’

Mitchell and Bloom wrote two of three moratorium bills passed by the Assembly Natural Resources Committee during a five-hour hearing filled with environmental advocates from around the state.

The momentum for a moratorium appears to have put the oil industry on the defensive, as representatives testified the industry is eager to embrace regulation ‘ even more stringent rules than state regulators have proposed ‘ to calm public fears and allow hydraulic fracturing to continue as California is poised for a potential boom in shale oil production.

‘The industry supports a regulatory structure. It’s in our best interests that we have disclosure, that we have transparency,’ said lobbyist Paul Deiro, representing the Western State Petroleum Association. ‘A moratorium will have a chilling effect on future investment in this state.’

Theo Pahos, representing the California Independent Petroleum Association, lamented that the industry had not previously taken a more proactive position to address public fears.

‘We are a bit regretful that we were behind the curve and didn’t take the opportunity to educate the public and the Legislature on the practice,’ he said.

Hydraulic fracturing, commonly called fracking, involves injecting under high pressure a mixture of sand, water and chemicals into oil wells to create fractures in subsurface rock formations to enhance production of oil and natural gas.

Although oil producers have used forms of fracking to stimulate production in California for decades, the practice is just now being scrutinized as a result of widespread environmental concerns that have been raised elsewhere in the country.

In those areas, fracking has spurred a huge increase in oil and gas production from shale formations. Critics say California needs to act now, in anticipation of a similar fracking-driven surge in production in the state from petroleum reserves embedded in its Monterey Shale formation.

That formation lies below 1,750 square miles in Central and Southern California, including much of Ventura County. In anticipation of enhanced prospects for shale oil production, a Los Angeles-based oil company has in recent months secured leases to mineral rights beneath more than 9,000 acres in the county.

Although the state Division of Oil, Gas and Geothermal Resources has long regulated oil drilling in California, it lacks regulations to govern fracking and does not require oil companies to tell regulators when and where fracking will take place.

The division is circulating what officials call a ‘discussion draft’ of proposed rules that it hopes to have in place within about a year.

Advocates of a fracking moratorium said those proposed regulations are coming too late and are too weak.

‘DOGGR has not expressed significant concerns and has moved at a glacial pace on regulation,’ Bloom said.

Indicating the industry will not oppose more stringent measures than those now being discussed, Deiro said the agency’s rules ‘will evolve to address some of the criticism you’ve heard today.’

On party-line votes, with majority Democrats in support, the panel passed AB 1323 by Mitchell, AB 1301 by Bloom and AB 649 by Assemblyman Adrin Nazarian, D-Sherman Oaks. All now advance to the Assembly Appropriations Committee.

The only member of the panel who represents any part of Ventura County, Assemblyman Das Williams, D-Santa Barbara, voted in favor of all three.

The three measures are among nine fracking-relating bills under consideration in this legislative session. The most comprehensive regulatory bill, but one that falls just short of imposing a moratorium, was written by Sen. Fran Pavley, D-Agoura Hills. It has been approved by one Senate committee and will be before a second committee Wednesday.

Pavley said she is trying to draft regulations that will satisfy environmentalists but also gain the signature of Gov. Jerry Brown. Last month Brown said publicly that his administration hopes to respond to public concerns ‘but also wants to take advantage of the great opportunities we have. The fossil fuel deposits in California is incredible, the potential is extraordinary.’

Geologists estimate that the Monterey Shale formation holds more than 15 billion barrels of oil reserves, and an economic study by USC researchers this year estimated that new oil development in the state could create as many as 2.8 million jobs by 2020.

Although he voted for the three bills, committee Chairman Wes Chesbro, D-Arcata, said it is not clear whether lawmakers will decide to impose a moratorium this year.

‘It’s clear that there is at minimum a crisis in public confidence,’ he said.