The California Division of Oil, Gas and Geothermal Resources (DOGGR) issued orders last Thursday requiring operators to shut down 33 of the more than 2,500 injection wells improperly permitted to pump potentially toxic oil and gas wastewater and other fluids into federally protected drinking water aquifers. Earlier this year, DOGGR admitted that poor communication, inadequate record-keeping, inconsistent information, and general confusion among the agencies responsible for overseeing the injection well program led to permits being issued that allowed drinking water supplies to potentially be poisoned by dangerous byproducts of oil and gas production.
This latest round of well closings brings the total number of shutdown wells to 56. (See my colleague Lance Larson's blog for details on where these wells are located.)
Under an agreement reached with the U.S. Environmental Protection Agency (EPA), the 2,553 wells were grouped into three categories based on the quality of the water into which injection is occurring. Operators of the 176 wells in category 1, injecting into what are thought to be the highest-quality aquifers, had until October 15th to either seek exemptions for those aquifers, or cease injection. Although no new aquifer exemptions have been approved, according to DOGGR, orders only had to be issued for 33 of these 176 wells because the rest had either been re-categorized, operators had voluntarily stopped injecting, or after further investigation the state determined that injection is not occurring into protected aquifers. The more than 2,000 wells in categories 2 and 3 can continue operating for more than a year before they have to be shut down or have approved exemptions. The presence or extent of any water contamination still remains unknown.
To make matters worse, it turns out that these improperly permitted wells are just the tip of the iceberg when it comes to problems with California's Underground Injection Control (UIC) Program, according to a report released by DOGGR last week.
Report reveals systematic flaws in injection well program
A law passed in 2010, SB 855, requires DOGGR to prepare an annual report about the UIC program, including information about permitting activities, violations and enforcement, staffing, new laws and regulations, and an assessment of California's UIC program. DOGGR hasn't submitted a report since 2011.
The 2015 report found "systematic problems that have existed within the Division [DOGGR] for many years," including "insufficient staffing to address increasing regulatory workload in addition to significant remedial programmatic work, poor recordkeeping on mostly paper forms and the lack of modern data tools and systems, outdated regulations that in some cases do not address the modern oil and gas extraction environment, inconsistent and undersized program leadership, insufficient breadth and depth of technical talent, insufficient coordination among fields districts and Sacramento, and lack of consistent, regular, high-quality technical training."
The current report also includes an in-depth assessment of the UIC program in DOGGR's District 1, which covers the L.A. Basin and "found systemic problems in the execution of the UIC program in District 1." Injection project files are incomplete, often missing critical data as important records are scattered between multiple locations. Regulatory documents approving an injection project, referred to as Project Approval Letters (PALs), "were confusing;" many projects had more than one PAL, PALs hadn't been adequately updated over the years, and many were missing crucial information.
Bypassing critical protections
The report found that regulators in District 1 haven't been consistently performing required tests and assessments to ensure that injection won't endanger groundwater. Among these are an assessment known in the UIC program as an Area of Review (AOR). The AOR is a cornerstone of the UIC program and requires operators and regulators to look for pathways that could allow injected fluid to get into protected groundwater. A sample of 45 injection projects was reviewed and 78% did not have appropriate and complete AOR evaluations.
A number of factors contributed to this significant failure to execute a key part of the regulatory program, but one in particular stands out. The report states that, "In 2012, to expedite the injection project evaluation and approval process, a new Division policy was established that allowed operators to add injection wells (new wells or well conversions) within existing injection project boundaries, without comprehensive AOR reviews." In other words, it became Division policy to bypass this critical protection. Even more troubling, this policy was put in place after a 2011 report found serious problems with the way DOGGR was performing AOR evaluations.
And that's not the only change that occurred to California's UIC program in 2012. The report also found that, "Following direction from upper Division management in 2012, District 1 no longer required use of the term 'remediation' in permit language regarding 'bad' wells (potential injection fluid conduits) identified during AOR evaluations. The approved PAL terminology was changed from 'remediate' to 'address.' It is unclear whether this terminology change was intended to mean remediation, or merely monitoring." In other words, even if a review to look for pathways was performed, it's not clear whether operators were required to do anything about pathways they did find. The number of applications for injection projects also increased beginning in 2012, while the number of permit violations identified and enforcement actions taken declined steeply.
These changes to the program coincide with allegations made by former top oil and gas regulator Derek Chernow that, beginning in 2011, the Brown administration pushed DOGGR to bypass key safeguards in the UIC program in order to speed up permitting. Chernow, who was acting director of the Department of Conservation (which oversees DOGGR) and Elena Miller, who was the state oil and gas supervisor, were fired in late 2011. The Brown administration later attributed the increased permitting beginning in 2012 to their firing.
This report adds to a growing body of information, which taken together paint a stark picture of a regulatory program dangerously out of control. The only silver lining to this bleak situation is that the eyes of the public, legislators, and the new leadership at DOGGR are now wide open to this crisis. Along with the report, DOGGR released a Renewal Plan for Oil and Gas Regulation, acknowledging past mistakes and laying out crucial actions needed to reform the program, and a specific timeline for doing so. This is a welcome first step, but let's be clear: whether DOGGR is sincere about and committed to real, lasting change in the way oil and gas activities are regulated in California will be judged by actions, not words.
We don't yet know, and may never know, the full extent of environmental and health damage that may have been caused by this complete and utter failure of the regulatory system. The report states that, "These shortcomings of the UIC Program have resulted in a relatively small number of wells being permitted where they should not have been in the context of over 55,000 injection wells permitted in the State."
It's difficult to imagine that any of the water users near the 2,553 improperly permitted wells will be comforted by the fact that they're among the relatively few who may have had their water contaminated because California chose to put oil and gas industry profit above public health and safety.