Oil & Gas Law Alert: SB 4 Compliance Begins in December for January 2014 Well Stimulation Treatments

by Stoel Rives LLP
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Yesterday, the Division of Oil, Gas, & Geothermal Resources ("DOGGR") released a Notice to Operators (the "Notice"), clarifying that some notification aspects of SB 4 will require compliance as early as the beginning of December 2013. SB 4 requires the creation and implementation of numerous new regulatory programs and mandates. One new mandate is a surface owner and tenant notification requirement prior to undertaking a well stimulation treatment, including hydraulic fracturing.

Under SB 4, new sections 3160(d)(6) and 3161(b)(1) of the Public Resources Code require that operators first identify surface property owners and tenants within a 1500 foot radius of the wellhead and a 500 foot radius along the path of the wellbore, and then contract with an independent entity to provide notification of planned well stimulation activities to those property owners and tenants. The notification must include a completed "Interim Well Stimulation Treatment Notice" form (which DOGGR included in its Notice), as well as information on the availability of water sampling and testing of any water well or surface water suitable for drinking or irrigation purposes. In addition to the information required in the Interim Well Stimulation Treatment Notice form itself, operators must also attach information showing compliance with the following additional SB 4 requirements: (a) the water management plan requirement, (b) the groundwater monitoring plan requirement, (c) chemical disclosure and reporting requirements, and (d) information on other nearby wells that may be impacted by fractures created by the well stimulation treatment.

Operators also must ensure that this notification is completed at least 30 days prior to commencing the well stimulation treatment. For example, if an operator intends to engage in well stimulation activities on January 2, 2014, that operator must ensure that notice has been given to the correct property owners and tenants no later than December 3, 2013. Essentially, if an operator plans to conduct any well stimulation treatment activities that are covered by SB 4, that operator must satisfy SB 4's notification provisions in December 2013.

The Well Stimulation Treatment Notice form is intended to assist operators in their efforts to comply with SB 4 before permanent regulations are implemented and a the permit program created by SB 4 is in place. This form should be submitted to DOGGR during the 30-day surface owner/tenant notice period and DOGGR will review it for completeness. Once the 30-day notice period has ended and the DOGGR has approved the Interim Well Stimulation Treatment notice as complete, well stimulation treatment operations may commence.

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