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On February 6, 2015, the Division of Oil, Gas, and Geothermal Resources (DOGGR) of the Department of Conservation and the State Water Resources Control Board (SWRCB) jointly sent the United States Environmental Protection Agency (EPA) a letter outlining their plan to review and, where necessary, adjust regulations relating to the underground injection of wastewater associated with the production of oil and gas throughout the State of California.  The letter was sent as the result of a dialog between the State and EPA following EPA’s warning that the State may be failing to fulfill its obligations to maintain primacy for the regulation of Class II injection wells under the federal Safe Drinking Water Act (SDWA).  State efforts to uphold primacy, including possible new rulemaking, will continue pursuant to the steps outlined in the February 6th letter.

The extraction of oil results in both oil and wastewater.  Wastewater consists mostly of brine (i.e., salty water) brought to the surface and separated from the oil.  Underground injection of wastewater has been the primary method of disposal for over half a century. Under the SDWA, Class II injection wells are those wells that inject these fluids.  Currently, over 50,000 wastewater injection wells exist throughout California.  The EPA, in consultation with DOGGR, conducted a review of California’s Class II injection program in 2011.  The audit identified certain areas for improvement and DOGGR committed in November 2012 to adopt regulations and provide resources to address the federal concerns.

The recent letter follows these efforts and indicates that DOGGR will rapidly review injection in over 2,500 wells that inject into non-exempt aquifers (i.e., aquifers of sufficiently high water quality to be suitable for drinking) and 11 aquifers historically treated as exempt but that have been determined to be non-exempt on the account of misidentification in the early 1980’s when DOGGR established primacy.  DOGGR will review the aquifer exemption process and will soon provide a guidance document for operators to supply the required data to support and justify an exemption.

The letter also broadly outlines the State’s plan for rulemaking to wind down existing injection into the non-exempt and 11 inaccurately classified aquifers within two years.  During that period, the State commits to use administrative orders to suspend any injection operations in the event there is a potential impact to water supply wells.

In response to the 2011 EPA audit, the State’s letter identifies many areas in which it may modify existing regulations or enact new regulations, including well construction and cementing requirements, plugging and abandonment requirements, requirements for fluid disposal, annual project reviews, well monitoring, and others.  DOGGR intends to provide a more detailed rulemaking plan by April 15, 2015.

The letter closes by noting that the DOGGR injection well database needs vast improvement, one of EPA’s major concerns.  At this time, DOGGR cannot provide a timeline for when it will provide a searchable database of injection wells but it notes that the information technology procurement process has commenced.  Overall, the letter draws significant attention to state and federal efforts to regulate underground injection.  The letter commits to open communication between the state and the oil and gas industry, environmental groups, state and federal representatives, and the public.  All stakeholders should pay attention and will have the opportunity to be involved in each of the proposed rulemaking processes, further details of which should be released by April 15, 2015.

A copy of the State’s letter can be found here.

For more information on this issue, please contact Rich Deitchman at (916) 446-7979 or rdeitchman@somachlaw.com.

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