California Wine Confronts Fracking

Monterey grape growers suspicious of groundwater contamination as state releases draft of new oversight rules

by Jane Firstenfeld
At least 545 wells have been hydraulically fractured in California, according to information compiled by Frac Tracker, source for the above image.
Sacramento, Calif.—For years, petroleum companies have practiced hydraulic fracturing (better known as “fracking”) in California, with virtually no government regulation or oversight. A 2011 investigation by Environmental Working Group revealed that fracking has been widely used in California for decades, contrary to assurances by officials that its use was uncommon in the state—even though they had never attempted to track the use of the controversial extraction method.

Now the Department of Conservation/Division of Oil, Gas and Geothermal Resources (DOGGR), the state agency nominally in charge of drilling, is considering new rules. Its “Pre-Rulemaking Discussion Draft” reveals few substantive changes and scant protection for the public.

Wines & Vines has reported on fracking in North America winegrowing regions since 2010. Proven or suspected repercussions of fracking—in which massive quantities of water and “trade secret” doses of chemicals are injected into petroleum-rich substrata to extract oil and/or natural gas—include heavy industrial truck traffic and pollution on rural roads, visually defacing scenic wine trails, potential triggering of earthquakes and, perhaps most vital, extraction and contamination of untold gallons of groundwater.

California wine industry uncommitted
In 2011, Steve Lyons, a winegrape grower in Santa Barbara County, was horrified when Denver, Colo.-based Venoco, owner of the mineral rights, installed a fracking operation in one of his vineyards near the southern extreme of the petroleum-laden Monterey Shale formation.

The Central Coast, Central Valley and Sacramento Valley are most vulnerable to fracking in California. To date, none of California’s major wine and grape trade organizations have adopted an official stance on fracking.

Nancy Light, director of communications at the California Wine Institute wrote: “It’s definitely an issue we’re tracking, because California wineries are dependent on energy and clean water, and committed to environmental stewardship. We’ll certainly be interested and engaged in any future legislative or regulatory activity.”

From the California Association of Winegrape Growers, Ron Lopp wrote: “Currently, CAWG has no position on the issue. As yet, we have not had any members raise fracking as a concern to their vineyard operations. At the same time, CAWG is concerned about any activities that threaten future availability of groundwater and the quality of our environment. We remain very interested in the subject and ready to protect vineyard interests as circumstances and issues require.”

Monterey takes a stand
“Fricking fracking,” said Paul Johnson, board president of the Monterey County Vintners and Growers Association, and owner of Johnson Vineyard Management in Gonzales, Calif.

“I have been fielding questions. Almost every day there’s an article about fracking. My personal opinion: I don’t trust the oil and drilling companies.

“As president of the association, I’ve talked to our county supervisors. Simon Salinas (District 3) said he was waiting for the regulations to come out. What happened in the past is that Venoco requested a permit from our county. That was turned down about a year ago: The reason was that basically, we don’t have enough information. We need to know we’re not going to compromise our water. Agriculture and public safety are our No. 1 priorities.

“We need to know that there are protections in place for our water sources. Until then, we would voice our concerns about any kind of fracking,” Johnson said.

Supervisor Salinas explained that when Venoco applied for a permit to frack in Monterey County, the supervisors demanded full disclosure of sources and quantities of water as well as chemicals to be used in the process.

Apparently Venoco found the requirements too onerous and has, at least for the moment, chosen not to pursue fracking in Monterey.

Salinas also noted local concerns about the potential of increased seismic activity in the county, where earthquakes are not uncommon. “We own the San Antonio dam as well as the Nacimiento dam, which we bought from San Luis Obispo County in the 1950s.” Located near known fault lines, these vital reservoirs are vulnerable to seismic events.

While the “traditional” oil-drilling field in San Bernabe “has been a good neighbor, and we have supported them,” Salinas said, Monterey government remains skeptical of fracking and its unknown risks.

“Our position is clear,” Salinas said. “We oppose unless they disclose.” So far, this stance has deterred fracking in Monterey County.

Expert analysis
The Environmental Working Group, a national nonprofit group, has been closely following fracking in California. Bill Allayoud, EWG’s California director of government affairs, told Wines & Vines, “The good news is: We have time to act.”

So-called “well casings”—basically concrete linings to protect petroleum-drilling holes below the level of groundwater—have been regulated all along.

“The curious thing,” Allayoud said, is that drilling is not required to be registered. “They (the drillers) don’t care what they do to get gas and oil out of the ground. The Monterey Shale may be resistant to water pressure, so they may use acid” to extract the precious fuel.

Currently, he estimated, there are about 54,000 traditional petroleum wells in California. In eastern Kern County, “One of our interns found cement failure at 1,600 feet” under the surface in one well. Since there is no central registry for wells in the state, “We have to find them one by one. Is it one company being shoddy?” Allayoud asked.

After public workshops last summer, he reported, “We are seeing a huge cultural change. The agency (DOGGR) has answered only to the oil/gas industry for nearly 100 years. They could argue that’s because there are no problems. But it is a state agency overseeing a huge private industry. The public must be served—not just Venoco, Chevron and the other petroleum companies.”

What’s discussed in the draft
Among nine pages of the “Pre-Rulemaking Discussion Draft,” the most outstanding take-home message is that California will continue to allow petroleum drillers/frackers to police themselves.

This may be because, as Allayoud explained, unlike the California Coastal Commission, DOGGR is not under control of any public body or board. It is managed by a paid staff of geophysicists, many of whom eventually leave DOGGR for work within the petroleum industry.

Some notable talking points in the draft include:

• Well casings must be cemented or anchored sufficiently to control the well.

• Protected water zones are to be isolated and sealed off to prevent contamination.

• Fracking fluids to be directed to the “zone of interest;” well bores’ mechanical integrity to be tested and maintained. “Operator shall follow the intent of all applicable well construction requirements, use engineering practices and employ best industry standards.”

• Information to be submitted to DOGGR and “appropriate regional water control board” at least 10 days prior to fracking. Notice to DOGGR “at least 24 hours prior” to commencing.

• DOGGR to post information about the well on its website within seven days of receipt.

• Operators to evaluate operations prior to fracking. Operators to monitor parameters during fracking.

• Operators to monitor storage and handling of fracking fluids, report to DOGGR within five days of “occurrence of an unauthorized release.” Operators to identify “any potential problems with a well that could endanger any underground source of protected water…immediately notify the division and perform diagnostic testing…to determine whether a well fracture has occurred…immediately take all appropriate measures to prevent contamination of all underground sources of protected water and all surface waters in the area of the well.

• Required public disclosures do not include information claimed as a trade secret. “The holder of information withheld as trade secret may request, and the division or other public agency shall, as soon as circumstances permit, provide an agreement…to prevent the disclosure of trade secret information received pursuant to this section, to maintain the confidentiality of trade secret information and to destroy all copies of the trade secret information received once the need for the information has ended.”

So, would the proposed new rules improve the existing situation?

Not really, Allayoud said. “What is new is that the applicant would have to show a zone of safety around a frack-job—that it won’t affect other wells or groundwater, or have proximity to known faults.
But in context: To drill a well, they send a paper of intent, DOGGR has 10 days to approve it.”

Lack of approval doesn’t signify a veto—just the opposite. It means drillers/frackers can go about their business. The 10-day “notice to drill,” which includes fracking, if not denied becomes the existing order of business.

According to Allayoud, this also means that owners of neighboring properties are not notified of impending fracking: “They’d have to check the Internet to see if there’s anything going on.” Developed by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission, provides a search engine for fracking locations across the United States. Its map, however, has not been updated since January 2011.

Regarding water supplies, Allayoud said, “There is no meaningful public notice” regarding the water sourced or amount used.” And, he added, there is no water quality monitoring. “We think people ought to know the quality, before and after it is used. The petroleum industry says that would be expensive.”

Calling Erin Brockovich?
Although the cinematically famous eco-watchdog Brockovich is an EWG supporter with fracking on her agenda and recently issued an email soliciting funds for the organization, even her investigative chops might be busted by the trade secrets protections of DOGGR’s proposed new rules. Summarized, here are the concluding paragraphs from DOGGR’s discussion draft:

“Trade Secrets. Some operators and contractors for operators claim that the chemical composition of the fracturing fluids they use are subject to trade secret protections. Trade secret protections are specified primarily in the California Civil Code.…The proposed regulations also require that, should the department or other agency determine as a result of spill or accidental release of fracturing fluid that the department or other agency needs to know the specific composition of the fracturing fluid for investigatory or emergency response purposes, that it shall immediately be made available to the department or other agency. The proposed regulations require disclosure to a doctor, nurse or other specified medical professional treating a patient suspected of exposure to fracturing fluid the specific chemical composition of that fluid. The division will support legislation, with appropriate safeguards, that will allow the public to directly challenge an assertion of trade secrecy.”

However, after learning secret specifics of suspected hazards to their patients, health professionals would be required to sign confidentiality agreements certifying that, “the information may not be used for purposes other than the health needs as asserted and that the health professional shall maintain the information as confidential.” The implication: Doctors would not be allowed to inform attorneys or investigators what contaminants may have harmed their patients.

Because of California’s protections for trade secrets, Allayoud pointed out, “We won’t ever know what the chemicals are” that are used during and after fracking.

“We recognize it will probably go to court. If you’re going through groundwater, people ought to know what you’re doing,” Allayoud said.

Taking action
An editorial in the San Jose Mercury News, updated Dec. 30, stated: “The Monterey Shale could produce enough oil to meet the entire nation's energy needs for about three years. There are many benefits to be gleaned and fortunes to be made, but this oil is not our permanent energy salvation, and reaching it is not more important than protecting California's water. That should be the governor’s main concern.”

Allayoud agreed. “We need to tell the governor, not just comment to the agency. DOGGR appears to do what they’ve always done: favor industry, not public health. Their No. 1 prime directive is to protect the public, but the vague 1915 statute (which established the department) doesn’t make it clear. We can help and regulate any way we want.”

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