The first restrictions on hydraulic fracturing are about to be implemented in California. This follows the passage of Senate Bill 4, authored by Fran Pavley (D- Agoura Hills). Approved in 2013, the regulations will force oil companies to expand monitoring and reporting of water use and water quality, conduct rigorous analysis of potential seismic impacts of operations and disclose chemicals used in all operations. Abiding by these new laws will discourage future investments by oil and gas companies in the state.
Recently, the Division of Oil, Gas, and Geothermal Resources (DOGGR) ― California’s agency charged with enforcing such laws — has been coming under attack by lawmakers over its inadequate oversight over oil and gas operations. In the past, DOGGR has admitted to falling behind on monitoring oil field wastewater injections into federally protected aquifers, as well as missing deadlines imposed by legislators for providing data. Many doubt the agency’s ability to correctly implement and abide by these new regulations.
More importantly, the California Monterrey Shale formation could potentially hold the largest “tight oil” shale deposits in the United States. While oil and gas activity in the region could have boosted the California economy, new regulations will hurt potential economic growth in the state. Currently, it has been estimated that oil and gas contribute about $21.55 billion to the public coffers every year. Without such revenue, California will have to make some tough financial decisions and fire many state employees.