New Permit Requires Disclosure of Hydraulic Fracturing Fluids For Offshore Oil and Gas Operations in Southern California

On January 9, 2014, the U.S. Environmental Protection Agency (EPA), Region 9, announced that it will require oil and gas operators engaged in hydraulic fracturing off the southern California coast to disclose any chemicals discharged into the Pacific Ocean. This disclosure requirement is part of a revised National Pollutant Discharge Elimination System (NPDES) General Permit for offshore oil and gas operations in Southern California. The disclosure requirements go into effect on March 1, 2014.

The January 9, 2014, Federal Register posting announcing the revised permit is available here: http://www.gpo.gov/fdsys/pkg/FR-2014-01-09/pdf/2014-00156.pdf

An EPA updated Fact Sheet dated December 17, 2013, is available here: http://www.epa.gov/region9/water/npdes/pdf/ca/offshore/CAG280000-addendum-factsheet.pdf

The revised permit requires those drilling off the coast of Southern California to maintain an inventory of the chemicals used to formulate well treatment, completion, and workover fluids. If there is a discharge of the fluids, the companies must report the chemical formulation and the volume of the discharge. The permit will apply to 23 existing development and production platforms on the Pacific Continental Shelf, as well as to any new exploratory drilling operations in areas the permit covers.

Hydraulic fracturing, sometimes called "fracking," is the practice of injecting water and chemical additives under high pressure into underground shale formations in order to enable extraction of oil or gas trapped in the rock. The disclosure requirement in the permit was added "in response to recent concerns regarding the potential effects of discharges of fluids used for offshore hydraulic fracturing operations," EPA said in the Federal Register posting announcing the revised permit.

Separately, the State of California recently enacted SB 4, a law that regulates the use of well stimulation techniques, including hydraulic fracturing and acidization. California's Department of Conservation, Division of Oil, Gas and Geothermal Resources (DOGGR) has released draft regulations pursuant to SB 4 requiring companies to test groundwater and alert landowners before hydraulic fracturing or other well stimulation operations. Companies would also have to disclose the chemicals used and acquire permits before a job. The DOGGR regulations go into full effect in 2015.