State regulators have placed dozens of new oil drilling permits on hold over the last two months after announcing a moratorium on applications for an extraction method tied to a series of large, uncontrolled crude petroleum releases last year in Kern County.
In November, Gov. Gavin Newsom's administration announced a pause on new permits for the technique that injects high pressure steam far underground to release oil trapped in rock formations.
The state's Division of Oil, Gas and Geothermal Resources stopped issuing new permits for the technique and planned to have experts from Lawrence Livermore and Sandia national laboratories study conditions in the Cymric field west of Bakersfield, where massive amounts of oil and water have flowed to the surface since 2003.
The moratorium has led state officials to place on hold 58 permit applications for high-pressure cyclic steam wells, according to Don Drysdale, a spokesman for the Department of Conservation, which oversees the division now known as he California Geologic Energy Management Division, or CalGEM.
A Southern California lawmaker who has launched an inquiry into the steam injection wells said CalGEM's new rules don't go far enough.
"I don't think it's going to be enough to actually ensure there's public safety and environmental protection going forward," said Henry Stern, D-Ventura, chairman of the Senate Natural Resources and Water Committee, in an interview.
"We need to do better," Stern said. "We're going to have to take a look at all the permits we've got out there for the entire oil sector."
On Monday, Stern's panel will join with its Assembly counterpart to hold a joint oversight hearing that will focus on the Kern County crude petroleum releases and consider the safety and sustainability of oil extraction practices throughout California's oil fields.
Among those scheduled to appear at the hearing are Wade Crowfoot, California's Secretary of Natural Resources, who has called the spills "a crisis of oil leaks"; representatives from Chevron and the Western States Petroleum Association; and a Kern County-based environmental group, the Center on Race, Poverty and the Environment.
"We need to take a much harder look at traditional methods of oil drilling in this state, which is steam, and make sure that we're not putting people, water (and) resources at risk," Stern said.
When the state came out with new oil extraction rules last November, it announced that it would refer dozens of pending oil company applications for hydraulic fracturing and other well stimulation methods to the Lawrence Livermore lab for independent scientific review.
The oil industry and state Senate Republican Leader Shannon Grove, who represents Bakersfield, have said the new rules would hurt jobs in Kern County, long the center of California oil production.
About half of the applications that are being delayed are associated with proposed work by Aera Energy, which is jointly owned by affiliates of Shell and ExxonMobil, for drilling it planned to do in the Belridge oil field, about 45 miles northwest of Bakersfield.
Aera announced in late December that the state's new rules could mean about 90 jobs from about half-a-dozen of its contractors would be cut. The company said then that it planned to idle one rig this year.
"The adjustment in business strategy is the result of regulatory disruptions in the permitting approval process," said Aera representative Cindy Pollard.
The other permits that were placed on hold were for applications filed by Sentinel Peak Resources for cyclic steam work it had planned in the Cymric and McKittrick oil fields, according to CalGEM spokesman Drysdale.
He said CalGEM has 277 pending permit applications for well stimulation treatments. Of those, 39 were forwarded to national labs for review under the state's new rules.
Crude oil that comes to the surface during steam injection — flows that the industry and regulators call "surface expressions" — became illegal last April under new state regulations.
A little more than a month later, Chevron experienced the first in a series of new, uncontrolled releases near steam injection wells in the Cymric field — a development first reported by KQED.
State regulators issued a notice of violation and levied a $2.7 million fine against the company for the largest of those releases, known as 1Y for its location in the Cymric field.
Currently, there is one active surface expression associated with Chevron's infrastructure in the Cymric field, according to the company and state officials. That active release, known as GS-5, has led to the release of tens of millions of gallons of oil since 2003.
"We have incorporated the lessons learned from the Cymric 1Y event into a field-wide approach to stop and prevent seeps, consistent with the new regulations," said Veronica Flores-Paniagua, a Chevron spokeswoman.
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