On September 20, 2013, California Governor Jerry Brown signed a law that will establish a comprehensive regulatory program for a natural gas and oil extraction process known as hydraulic fracturing, or "fracking." Fracking involves injecting a high pressure stream of water, sand and chemicals into rock formations known as shale, to create fractures within the shale from which natural gas and oil is extracted.
Senate Bill 4, introduced by Senator Fran Pavley (D-Agoura Hills), would impose the following requirements:
Perhaps the most debated issue during the final weeks of the legislative session was SB 4's requirement that fracking operators obtain a permit from DOGGR. SB 4's permit requirement is significant because discretionary approvals such as the DOGGR permit require CEQA review. According to SB 4's permit requirement, however, once DOGGR determines that the fracking operation complies with CEQA, "no additional review or mitigation shall be required." In other words, the language appears to preclude the local agency from conducting its own CEQA review, so long as DOGGR has determined that the fracking operation has been fully analyzed and mitigated under CEQA.
Certain stakeholder groups expressed concern with SB 4's limitation on CEQA review, as DOGGR regularly approves traditional oil and gas development proposals under CEQA's categorical exemptions for minor alterations to land or existing facilities, or by way of abbreviated environmental review in the form of a negative declaration or mitigated declaration. Indeed, on October 16, 2012, the Center for Biological Diversity and other groups sued DOGGR, arguing that DOGGR has improperly exempted or otherwise limited its review of oil and gas developments. The groups requested that DOGGR be enjoined from approving further oil and gas permits where fracking may occur until EIRs are prepared for those operations. The lawsuit is still pending.
It is worth noting that notwithstanding SB 4's provision limiting CEQA review, SB 4 requires DOGGR to prepare a broader EIR analyzing the potential environmental impacts of fracking in the State of California. Such EIR would likely establish a framework for "tiered" project-level EIRs for future fracking operations, an abbreviated environmental review document which would summarize and incorporate by reference much of the information contained in DOGGR's EIR.
The fracking debate in California is certain to continue as DOGGR promulgates its regulations and prepares its scientific study and EIR. We will continue to provide regular updates regarding these and other legislative and judicial developments as they arise.
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