Brown Announces New Oil Industry Regulations Ahead of "Promised Land" Release

Posted on 20 December 2012

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By Dan Aiello

The Brown administration Tuesday proposed new draft regulations that would require the oil industry to disclose where in California its oil extraction operations are using hydraulic fracturing, commonly referred to as "fracking," in advance of a new movie starring Matt Damon meant to bring public awareness to the environmental destruction caused by the practice.

While an oil and gas spokesman says his industry is "resigned" to the long-awaited new regulations, environmentalists claim the out-of-state and resource tax-exempt oil companies largely ignore the state's current regulations, despite earning record profits in recent years, and the governor's proposal of new regulations may do little more than placate the public's concern over fracking, the hydraulic injection of water, steam and sand into the soil to loosen and retrieve the last oil deposits of a depleted well.
Promised Land's producers hope to raise public concern and bring greater government scrutiny to the irreparable environmental cost of fracking when "Promised Land" opens in California theaters December 28th.

The oil industry also is using the days before the Damon film opens with what environmentalists describe as a "smear campaign", and stories like the censorship by Apple's iTunes of a Damon interview on fracking are already being told.

While the oil industry's response to the yet-to-be released film is just days ahead of the movie's premiere, oil, gas and chemical interests have effectively lobbied in Sacramento and other state houses years ahead of any organized political opposition.
Because consumers, commuters and the nation's economy is dependent on fossil fuels, Simply by inferring an environmental protection will increase the price for a gallon of gas - despite public disclosure as evidence that these cost claims are false - the oil and gas industry has been able to effectively avoid accountability for many of its methods of production or transportation.
In fact, among Brown's new "bold" regulations is a requirement that the oil producer inform the California land owner that a fracking operation is underway, as currently, oil producers aren't required to provide any information about their operations to property owners who don't possess the rights to the oil deposits beneath them.

Promised Land's writers, producers, cast and crew can rightfully credit their collaboration for the timing at least of the 2012 release of California's new fracking regulations that have been so long-delayed.

More regulation while maintaining an insufficient number of state inspectors to monitor what has historically been a politically arrogant oil and gas industry, is not the answer to protecting California's water supply or the state's fertile farmland, leading environmental lobbyists in Sacramento told the state's newspapers in interviews that expressed disappointment in the governor's announcement.

"Promised Land," starring Matt Damon, was filmed largely outside of California, but is meant to bring public awareness to the environmental impact of the hydraulic injection of water, steam and sand into the ground to liquify and bubble to the surface the thickest crude, for which Kern's oil deposit known.

Opponents of fracking believe oil producers encourage news media to refer to the method as "controversial" to suggest to the public there may be an informed debate among experts whether or not fracking is destructive.

No independent scientific studies appear to exist that conclude the extraction of oil by fracking was either good for the environment or was neutral or not bad for the environment. What is controversial is over the degree of damage fracking causes and if all of the accountable damage to the environment amounts to irreparable harm. Controversy surrounds a single question, whether the cost to the environment is outweighed by the benefit to the nation's economy.

The only controversy about fracking is whether or not the environmental damage it causes long-term is worth the short term gain of oil production. The oil and gas industry believes it is, environmentalists and water interests in California do not.
Hydraulic underground fracturing injecting water into the soil in order to loosen and bring to the surface tar-like oil and the now polluted water left over, damages surface soil (anyone who has ever seen where engine oil has leaked from their car onto the ground can appreciate the affect) and turns water into a toxic soup unfit for plant or animal consumption.

"Promised Land," will not shine any favorable light on the oil industry or fracking according to audience previews cited by the entertainment publication, Hollywood Reporter. The film's writers, actors and producers portray the irreparable damage to a rural family farm similar to the thousands of acres of California farmland and similar agriculture-based Central Valley communities damaged or diminished by the loss of their agriculture acreage.

As with the damage to land, there also appears to be no debate about the amount of California drinking water that is turned toxic in order to produce oil with the fracking extraction process. A cumulative 2.8 trillion gallons of water is said to have been used for fracking in California to date, water taken primarily from the endangered Sacramento/San Joaquin Delta estuary (now under threat of another peripheral canal proposal to drain 7 million acre feet of water that could wipe out several species of Northern California fish native to the largest estuary on the Pacific Coast), conveyed south via the state's taxpayer-funded water conveyance system (aqueduct) and siphoned off for fracking by tax-exempt oil producers in Kern where it is processed into highly toxic waste - or "produced" water.

Fracking waste-water, if improperly handled or stored, has the potential of polluting local groundwater tables if not contained above the surface with the same lethal effect to the soil and water as would used motor oil from an automobile, or more precisely the same effect as pouring 1.46 million gallons of car oil on the ground every week. The damage to the environment can be irreparable.

Fracking not only has the potential of destroying otherwise fertile and productive California's farmland and groundwater supplies, just as in Promise Land, California farmland is being rendered unusable by oil producers undeterred by state regulations that one State Senator says amounts to nothing more than a "tell your neighbor," suggested compliance with regard to existing state law. .
Fred Starrh, a longtime Kern County farmer, turned on his irrigation system one spring to water his vast productive Almond orchards. Starrh's watering system was designed to pump groundwater from a well on his property into the farm's hundreds of acres of productive California Almond trees.

But instead of hydrating his orchards, it killed them. Every tree - after a single watering.

In the first of two lawsuits filed by Starrh against Aera Oil, reported by PBS to be a Chevron subsidiary, but reported by Brent Tippen of Chevron to be a Shell, Mobile subsidiary, Starrh's suit claimed groundwater beneath his farm had been so contaminated by Aera's nearby fracking operation that it was so toxic it killed every tree in the orchard after a single irrigation, while also rendering hundreds of acres of fertile Central Valley farmland barren and unable now to sustain life.

Kern County still produces 10 percent of the nation's domestic oil supply, once accounting for 37 percent. But the area's oil is what is known as "heavy oil," say oil industry representatives, and water and steam have been a necessary tool in the extraction of Kern's tar-like oil deposits.

The oil industry, despite the depleted oil fields, still dominates politics and public policies, state and county-held offices, and the county remains a place where a local official might "turn a blind eye" to oil industry practices including Aera's siphoning of 1.46 million gallons of water each week intended by the State Water Project for homes and agriculture for fracking, according to Jeremy Miller for the environmental news producer, High Country News.

But despite the industry's influence in the region Starrh, after a second trial, won suit against Aera's illegal fracking operations, a moment when a Kern County jury sided against big oil, finding Aera guilty of a flagrant disregard for the environmental impact company executives knew would occur from the migration into Kern County groundwater of fracking "produced water."

Starrh was eventually awarded $8.5 million in damages.

During the trial both the jury and the press learned how, in a story reflecting PG&E's actions portrayed in the film "Erin Brockovich," Aera management knowingly and with wonton disregard for the impact to local groundwater, chose to violate state regulations requiring "lined" holding ponds built to contain the waste or "produced" water in order to cut costs despite the industry's record profits from increasing gas prices the industry charges California drivers.

"Our groundwater resources need to be protected from oil and gas development to prevent what happened to the farmer in this case from happening again," said State Senator Lois Wolk (D-Davis), a stalwart defender of the Sacramento/ San Juaquin Delta, California's largest and most endangered estuary, from which the State Water Project aqueduct conveys the water Aera then syphoned of and used to contaminate Kern groundwater.

"I am monitoring the development of state regulations governing hydraulic fracturing and am hopeful that, once adopted, these regulations would not only protect water quality from the impacts of fracking in the future, but let Californians know just how much water is being used for fracking purposes, given our limited supply," said Wolk, who continues to be a strong advocate for the adoption of a state policy of regional water sustainability and abandonment of the costly construction of another canal of the BDCP that would continue the state's politics and practices of resource exhaustion that has historically caused most of California's water wars.

Sen. Wolk's regional water sustainability plan is only possible if local groundwater supplies throughout the state remain potable.

The oil industry's thirst for California's other precious liquid is not widely known outside the state's environmental organizations and the oil industry itself. And oil producer's thirst is growing as the depleted oil fields are exhausted. A decade ago Kern County produced almost an equal amount of polluted waste-water as it did oil from fracking, approximately a 1:1 ratio. By 2008, the barrels of oil were significantly reduced while the amount of water used to produce them had grown by 100 million barrels, annually, a 3:1 ratio. And the amount of waste-water produced by Kern County annually continues to rise in the face of ever-decreasing oil production.

In the case of Chevron-controlled Aera oil, company executives and engineers knowingly violated the state's Department of Oil, Gas and Geothermal Resources (DOGGR) regulations meant to protect Kern's groundwater when they made the cost-cutting decision not to line the ponds that are supposed to, if properly constructed, prevent waste-water "migration" to local groundwater below.
There is no reversing the contamination caused by Aera, the damage to the land and water is irreparable. And the executives and Aera and Chevron corporations, unlike BP, are not being held accountable by the state for cleanup of the site.

With the strongest political lobby in Sacramento, its no surprise that the state's water quality board and DOGGR staff charged with oversight of fracking operations, are few and far between, or that oil producers like Aera feel immune to the consequences of cost-cutting decisions that violate DOGGR regulations.

And with the money saved from denying California its own resource extraction tax, the oil industry continues to invest in its political influence in Sacramento over DOGGR policies and Department of Water Resources' environmental regulations.

Even if California's electorate is largely unaware of the oil industry's influence over the state's legislature, elected representatives from throughout the state are keenly aware of the political risk that come with opposing the industry's interests.

According to the Secretary of State's political action committee records, all of the major corporations that comprise the nation's oil industry, despite being headquartered out-the-state, maintain California political action committees (PACs) for maintaining the requirement of a two-thirds majority for any revenue generating legislation.

These PACs, through which millions of dollars in campaign contributions flow to retain enough anti-extraction tax (97 percent Republican) representatives in the legislature, have successfully prevented the state from receiving billions of dollars in oil revenue, thwarting extraction tax proposed nearly every legislative session. Resource extraction revenue is paid by these corporations to every other state government in the nation and every nation in the world. But in California's state legislature, as in Kern County, oil is king and legislators here oppose oil at their own peril.

Last year legislation calling for a tax of oil at a rate just half the severance charged by Texas, Alaska and Louisiana intended to help offset cuts to education was defeated by pro-oil (97 percent Republican) legislators.

The defeated bill would have generated approximately $1 billion dollars annually for the coffers of a cash-strapped California (calculated at the current total production rate of 222 million barrels annually.) California taxpayers instead voted to tax themselves to pay for education while the oil industry maintained its "California bonus" tax exempt status.

The oil extraction or severance tax ties into the issue of fracking closely because revenue generated by it would pay for state inspection of the highly profitable but largely unmonitored California oil industry.

State Senator Fran Pavley (D-Agoura Hills) who had struggled last session to navigate her 'fracking' monitoring bill, SB 1054, through a hostile state legislature, told the Bakersfield Californian that the governor's proposal is not a solution, but did say it was "a first step."

"The public is asking, and perhaps rightly so, what are they (the oil producers) trying to hide?" Pavley said in a May, 2012 interview with the Los Angeles Times about her bill, which was defeated.

The severance also has been used to restore environments decimated by oil disasters or just through normal production. Governments need the revenue to restore abandoned oil fields or, in the case of Louisiana, restoration of its fragile Delta wetlands that were again decimated by the BP gulf disaster. In fact, Louisiana's restoration of miles of coastal wetlands, completed using its extraction tax revenue just prior to the BP oil spill, was credited with preventing the extinction of several species native to Louisiana's endangered estuaries, acting as a buffer between the restored wetlands and what was left of the Mississipi Delta, marshes largely erased by a poorly thought out US Corps of Engineers' 'straigtening' of the Mississippi river mouth to the gulf.

In the case of restoring the groundwater under Starrh's Kern County farm, California has no such restoration fund and still remains the only government in the world not to charge oil producers a royalty for the removal of a finite natural resource.

While Governor Brown's administration managed to beat Hollywood's release, it should be noted that concerns over the practice of fracking have been around for several decades and Promised Land's release belies the year the story was penned, 1983. There is perhaps no better testament to the influence of oil and industry interests over California's legislative bodies then the fact that these regulations, what Senator Pavley called, "a first step," are only now being considered for action by Sacramento.

Dan Aiello reports for the Bay Area Reporter and California Progress Report.