Water Issues Reframe State Fracking Debate


The following article was originally published in the San Francisco Daily Journal on July 14, 2014. ©2014 Daily Journal Corporation. Reprinted with permission.

The debate over fracking continues nationwide, but in California there is an increasing focus on one major issue: water supply. With the state facing one of the most severe droughts on record and water regulators tightening the reins on water use, opponents are trying to garner support for a moratorium by highlighting fracking’s consumption of fresh water.

Fracking – also known as hydraulic fracturing -- is the practice of injecting water, sand, and other substances, known as proppants, into a well in order to access underground oil and gas deposits. Fracking is not new to California; in fact, it has been used throughout the state for decades. But the recent discovery of the Monterey Shale formation, which spans approximately 1,750 square miles and, according to federal authorities, contains 600 million barrels of recoverable oil, has brought the fracking debate to center stage.

The oil industry believes that fracking will allow the Monterey Shale oil to be accessed safely and economically, providing a financial boon to California and a big step toward energy independence. According to the California Chamber of Commerce, tax revenue from oil and gas development could grow from $4.5 billion to $24.6 billion if drilling in the Monterey Shale proceeds. But opponents are pushing back.

Historically, the national debate over fracking has focused primarily on water quality – not quantity – because of concerns over the often-proprietary chemicals that are injected to stimulate well production. But in California that’s changing. Eighty percent of the state of California is now suffering from severe drought, and fracking opponents argue that expanding fracking – or even allowing it to continue – is a burden California’s water supply simply cannot bear. 

There is no dispute that fracking requires a substantial quantity of water. A 2013 Ceres report concluded that the average well fracked in California uses 166,714 gallons of water – about as much water as a family of four uses over the course of a year. But the fracking industry says this data is misleading. The Western States Petroleum Association points out that the amount of water required to frack a single well – which it calculates as 127,127 gallons – is less than half the amount of water needed to irrigate a golf course for a single day (353,000 gallons). What’s more, they say, the economic and energy benefits of accessing the Monterey Shale justify using quantities of water that are insignificant when compared to other uses, such as agriculture. 

Regulatory Limitations on Water Use 

Providing the backdrop for this debate, regulators are growing increasingly aggressive in their efforts to conserve California’s precious water supply. With voluntary programs proving unsuccessful, regulators are taking advantage of the enforcement authority granted by Governor Jerry Brown’s January 17, 2014 State of Emergency Proclamation to impose mandatory cutbacks, under threat of administrative enforcement.

In May, the State Water Resources Control Board (“Water Board”) issued three curtailment notices, requiring junior users of surface water in the Scott River, Russian River, Sacramento River, and San Joaquin River watersheds to immediately cease diverting water or face potential fines. The notices also advised holders of more senior water rights, including riparian rights and pre-1914 appropriative rights, that their water rights may be curtailed “in the near future” if drought conditions persist. To date, the senior users – which include many long-standing agricultural operations – have not received curtailment notices, but the issue is looming.

On July 2, the board upped the ante, approving emergency regulations authorizing it to issue immediately enforceable curtailment orders – instead of mere notices – to holders of surface water rights in California. The new regulations authorize the board, upon determining that “flows are sufficient to support some but not all diversions,” to issue curtailment orders to post-1914 appropriative (a.k.a., “junior”) water right holders in order of water right priority, beginning with the most junior water user. Because curtailment orders issued under the emergency regulation are immediately enforceable, water right holders who violate an order are subject to penalties that begin to accrue from the date of violation.

Most recently, on July 8 the Water Board proposed more drought-related emergency regulations, this time targeting household water uses. The proposed regulations would prohibit certain common outdoor water uses: the direct application of water to any hard surface for washing; watering of outdoor landscapes that causes runoff to adjacent property, non-irrigated areas, private and public walkways, roadways, parking lots or structures; using a hose to wash an automobile, unless the hose is fitted with a shut-off nozzle; and using potable water in a fountain or decorative water feature, unless the water is recirculated. Under the proposal, violators would be subjected to fines of $500 per day. The new proposal would also require urban water suppliers to significantly restrict outdoor water use in their jurisdictions.  

There is no way to predict how effective the board’s mandates will prove in conserving California’s water supply. But with four more months until the state is likely to see any significant rain, the regulation will almost certainly continue. 

Fracking Legislation 

Meanwhile, fracking opponents continue to push for legislation to regulate – and ultimately prohibit – fracking in California.

Comprehensive fracking legislation, known as SB 4, was passed by state legislators in 2013 and is now being implemented. The California Department of Oil, Gas and Geothermal Resources (DOGGR) issued interim regulations, effective Jan. 1, 2014, requiring any company planning to fracture a well in California to certify the integrity of a well prior to fracking, provide at least 72- hour advance notice of fracking to DOGRR, provide notice to neighboring properties at least 30 days prior to fracking, and disclose all fracking chemicals used within 60 days of fracking. SB 4 also requires DOGGR, by July 2015, to prepare a statewide Environmental Impact Report pursuant to the California Environmental Quality Act, to analyze the potential impacts of fracking, and to commission an independent scientific study of fracking. The final regulations under SB 4 are currently in development; a draft of the proposed regulations went out for comment in June 2014. The bill has been lauded by many as an admirable compromise between industry and environmental groups. 

However, fracking opponents are still pushing for a moratorium, despite the protections offered by SB 4. In May, the State Senate soundly defeated legislation that would have prohibited all well stimulation treatments (which includes fracking) until completion of a  scientific study evaluating the heath and environmental impacts of drilling. But the New York Times recently quoted Kathryn Phillips, the director of Sierra Club California, as stating that, “There will be a statewide moratorium, whether it comes this year, next year or the year after that. Even if we don’t get a moratorium, just the threat of a moratorium discourages investment.”  Meanwhile, about a dozen local governments have implemented their own moratoria on the practice, following in the footsteps of three states – Vermont, New York, and North Carolina – that have issued their own bans.

Though it is not clear the extent to which water supply issues will impact fracking regulation, the drought is now clearly framing debate and catching the public’s attention. But unless opponents can get more traction in Sacramento, oil companies will continue to be treated like all other water users in California, subject to the same legal framework for pumping groundwater and diverting surface water. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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