CALIFORNIA - Oil companies are eying the Central Coast because under the golden hills around it could be California's next big boom. Igniting a statewide controversy, is the relatively new method of extracting natural gas and oil that's currently buried thousands of feet underground, hydraulic fracturing or fracking.
Central Coast News went to a small town in Kern County, where oil companies have already used the method, to find out whether the growing industry stands a chance against some environmentalist fighting to stop it in the state.
Possible Groundwater Contamination
The city of Shafter, California, has a population of 17,000 and among them is almond farmer, Tom Frantz. Frantz has lived in Shafter his whole life, and for the most part, things have been good.
"I drive through this area on a daily basis. I go to Shafter and drive pass the oil wells. I see a lot of things that bother me," said Frantz.
Last year Frantz videotaped a suspicious fluid discharge that was coming from an oil operation. After Frantz posted the video online, he sent the video to the Central Valley Regional Water Quality Board. The agency then began an investigation and tested a sample of the fluids dumped. The test found the fluids were laced with boron, salt, and a mixture of chemicals related to gasoline and diesel.
Frantz said all that was a result from hydraulic fracturing. "Here they were breaking the law right in my backyard. Dumping fluids into a pit that cold contaminate my groundwater," said Frantz.
The water quality agency is investigating operations in the Shafter area. According to Frantz, it's the state's first look at the impact fracking can have on the quality of groundwater.
What about Earthquakes?
Fracking is the use of specially blended liquids, pumped into a well under extreme pressure causing cracks in shale formations underground. The cracks allow oil and natural gas to flow.
"Here in California we heard rumors that fracking was happening but no one really knew what was going on, " George Torgun, Staff Attorney at EarthJustice.
EarthJustice, a non-profit environmental law firm based in San Francisco, has been on the forefront of representing clients affected by fracking. Torgun said when they started asking questions about fracking in California to the Oil, Gas and Geothermal Division in 2010, the state agency didn't really know much.
"How much fracking is happening in the state? They didn't know. What are the environmental impacts of those activities? They had no idea. They required no reporting from the industry about when fracking is happening, where it was happening, how much water was being used, what chemical was being used. Simply no data," said Torgun.
So far, there 1,200 oil wells have been fracked in California, that's according to the website Fracfocus.org, a site where oil companies are voluntarily reporting their methods.
In California, geologists say there should be more concern about them triggering earthquakes.
"The difference in California would be that we have a number of active faults, if you trigger an earthquake, it could trigger a large earthquake," said Bob Barminski, Geologist on the Central Coast.
Barminski said fracking can put too much pressure on rocks underground and then fractures them. He said that's when it can trigger small earthquakes because it reduces the friction that holds rocks together.
What's more, the newer way to frack has changed from going into the ground just vertically to frack, to going down vertically and then horizontally. Barminski said that means companies could be increasing the risk of larger earthquakes.
What's even more concerning for environmentalist like Frantz and Torgun, California sits on the largest oil reserve in the nation, the Monterey Shale.
Fracking is nothing new in the country. It happens in Pennsylvania, Texas and North Dakota.
"In general, I don't think there are any concerns for hydraulic fracturing," said Dennis Johnson, Mayor of Dickinson, North Dakota. Dickinson has seen dramatic economic growth and Mayor Johnson gives credit to the fracked wells in the Bakken Shale Formation near Dickinson.
"It's led to success in the Bakken and that in turn has led to more jobs," said Johnson
Johnson said in 1999 North Dakota was producing less than 1,000 barrels of oil a day, but this past January they reached one million barrels a day. The sales tax revenue has nearly doubled from $5.3 million to $10.5 million in the past two years. He added the unemployment rate, sits close to one percent.
When asked where the growth came from, Johnson said, "this growth is almost solely oil driven."
So could this growth be the solution to cash strapped towns in California?
A study released by the University of Southern California in May, found that more oil development on the Monterey Shale could add 2.8 million new jobs in California by 2030. The state's Gross Domestic Product could increase to 14.3 percent per person and tax revenue collected by California state and local governments could grow to $24.6 billion dollars by 2030.
"Having temporary jobs, its an important thing, its important for the economy, for California, but are these the types of jobs we want to have? Are these the types of public health and environmental consequences we want?" said Torgun
The oil industry is already regulated in California but Torgun said there is nothing that differentiates the methods on how oil is extracted.
"They just threw up their hands and said we are going to trust what they are doing is safe," he said.
In September, Governor Jerry Brown signed Senate Bill 4. The law adds some regulations which go into effect in 2014. Fracking operators will now be required to notify nearby property owners, obtain a permit from the state, conduct groundwater testing and disclose the chemicals they are using. More finalized regulations won't come in to play until 2015.
Also beginning in early 2014 will be an independent study to analyze impacts including seismic risks, use of recycled water and other well stimulation techniques besides fracking.
Senator Fran Pavley who authored SB4 said one of the requirements of the bill is that the State Water Board will develop regional groundwater monitoring plans that will be in place to assess future long term impacts.
The law calls for an independent scientific study on the any risks behind fracking or acidizing to be completed by 2015. But for environmentalists a lot of damage can be done by then.
"Essentially it allows the status quo to continue for at least the next couple of years and that concerns us," said Torgun.
For the city of Shafter that could mean more non-stop machines around prime farmland, more oil wells filling the backdrop of an elementary school and more concern for Kern County activists, Frantz, who carries a camera in hand all the time, to document what could be a boom, or bust for his town.
"In the next two years they could drill another 30 wells, maybe 50, right here in the middle of this prime farm land, one mistake in one well can damage the groundwater for thousands of acres of farmland or even the whole town of Shafter," said Frantz
Wednesday, 20 leading climate experts called on Governor Brown to impose a moratorium on fracking in the state. Other states like New York have put a ban on the practice while the risks are evaluated.
Q & A with Senator Pavley
Q: While the law and regulations is a big step as far as keeping an eye on new methods oil companies are using to extract oil and gas, why the deadline of 2015 to finalize regulations?
A: "Beginning in 2014, companies may not frack or acidize oil and gas wells unless they disclose all chemicals, notify neighbors and test the groundwater before and after operations. Like most agencies implementing comprehensive legislation, the Department of Conservation will need time to receive public comments and finalize its regulations, but these key provisions will give us immediate safeguards in 2014 and end unregulated fracking and acidizing in California."
Q: Some environmentalist have said a lot of damage could be done by then, how can you address those concerns?
A: "Companies have been fracking and acidizing without any oversight in California, and SB 4 will provide the first regulations and data while leaving room for more restrictions. This bill is just the first step toward greater accountability and transparency, and it will help California decide whether we can allow these activities to continue. The public is encouraged to review and comment on the draft regulations that will be released to implement SB 4."
Q: What's your take on the outcome of getting a bill signed, a lot of bills introduced this session but yours was signed, is this a step in the direction California needs to go when looking at what could be the next boom for the state?
A: "We need to account for all the costs and risk of fracking, and SB 4 will help us do that going forward. There were a variety of bills introduced, including several that proposed a moratorium. A moratorium would be a reasonable precaution, but there was little support in the Legislature this year. SB 4 is a first step but it will not be, and was not intended to be, the end of the debate on this issue, and it does not prevent local governments, state agencies or the governor from adopting more stringent regulations or a moratorium."