New Trends in Drilling Permit Approvals Take Shape in CA
FracTracker’s tracking of CalGEM permits identified a unique trend.
The agency’s permits significantly decreased beginning the week of October 11, 2021, a slowdown that continued for the most part—as evidenced through CalGEM’s recent weekly update of approved drilling permits. This trend is consistent only for new drilling permits of oil and gas production, and for enhanced oil recovery wells.
It does not include new drilling permits for Class II wastewater injection wells, or for gas storage wells, nor does it include permits to rework, re-drill, or to deepen existing oil and gas production, or enhanced oil recovery wells.
The cause of this regulatory slowdown is still unknown, but the timeline correlates with a California court decision to deny Kern County’s authority to issue new drilling permits. Though this provides a period of relief for Frontline communities, the continuation of rework and re-drilling permit approvals maintains existing harms.
Governor Newsom and CalGEM should stop issuing all new well drilling and rework/re-drilling permits, to reduce the existing negative health impacts in Frontline communities.
This report explores trends in California Department of Geologic Energy Management’s (CalGEM’s) oil and gas well permitting rates. Counts of CalGEM’s approved oil and gas well permits were measured and assessed, and permitting trends were identified and are reported here.
FracTracker generated permit counts and highlighted counts of specific well types and permit types with the greatest potential environmental and public health detriment.
California’s oil and gas production has declined steadily since the state’s “peak oil” phase that climaxed in 1985. The production decline rate has remained steady at about seven percent per year, with small fluctuations caused by factors such as the Covid-19 pandemic and changes in the price of crude. The market price of oil has dominated control of production figures in California, rather than environmental policy or public health protections. Overall, oil production data through 2021 shows California consistently continues to produce crude oil as a major extraction state.
Similarly, since Newsom took office, the number of new drilling permits issued is comparable to the number issued under his oil-friendly predecessor, Governor Brown. The consistent production decline has not impacted permitting rates—or vice versa—as permitting for drilling new oil and gas wells have stayed consistent, and even increased since 2016. See the annual permitting rates shown in the graph in Figure 1. Many jurisdictions, including Kern County, issued over-the-counter permits for oil and gas projects—disregarding environmental justice and public health concerns.
Figure 1. Graph of well permitting counts. The graph shows the counts of new drilling permits by year.
While production and permitting rates are largely consistent over the last three years, there has been a significant slowdown recently in the issuance of new drilling permits for oil and gas production wells, as well as for enhanced oil recovery (EOR) wells. Since October 9, 2021, there have only been four new drilling permits issued for these well types, compared to an average of over 100 new drilling permits issued per month, prior to October.
This slowdown is a welcome reprieve for California communities who have lived with the toxic consequences of neighborhood drilling for decades. This dramatic decline in new wells permitted over the past four months shows it is possible for the governor to stop the expansion of this deadly industry and protect Californians from oil industry pollution. Though Gov. Newsom has not yet committed to halting all new fossil fuel projects, he took many significant steps to move California beyond oil in 2021. He announced a 2045 phaseout goal and a ban on new fracking, and he’s also been vocal about the need to make fossil fuels “part of our past.”
Figures 2 and 3 below show the counts of total permits and new drilling permits issued from January 2021 through February 2022. The agency permitted only four new drilling permits for oil and gas production wells between October 9, 2021 and February 26, 2022. The four approved permits included two drilling permits issued to 777 Energy in Fresno County, one drilling permit issued to Vaquero Energy in Santa Barbara, and one more drilling permit issued to Renaissance Petroleum in Ventura County.
Figure 2. Chart of CalGEM permit counts by month. Counts of CalGEM permits were summed for each month of 2021 through February 26, 2022. The proportion of permit types are shown in each bar. The months of November 2021 through February 2022 have decreased counts of new drilling permits. New drilling permits issued in February 2022 were for gas storage and wastewater disposal wells, aggregated as “support wells” in Figure 2.
Figure 3. Chart of monthly counts of CalGEM new drilling permits by well type. In this chart, well types were aggregated into three categories. Production wells include oil and gas wells, dry gas wells, dry hole wells, and cyclic steam wells. Enhanced oil recovery (EOR) wells include steam injection, water injection, and pressure maintenance wells. Support wells include gas storage wells, wastewater disposal wells, water sources wells, and several other similar well classifications.
The explanation for this slowdown is unknown, but may be explained partially by a state court invalidating Kern County’s over-the-counter permitting scheme, and the court’s ruling that prohibits Kern County from issuing local oil and gas permits as of October 6, 2021. The decision resulted from a lawsuit challenging Kern County’s recently approved environmental impact report, which was written to streamline the approval of some new oil and gas wells in the county.
While Kern County is prohibited from issuing permits, the state oil and gas regulator, CalGEM, must serve as the primary agency in charge of environmental review under CEQA. Governor Newsom’s administration has not announced any change in CalGEM’s permitting policies, but the agency may take more seriously their legal responsibility to apply CEQA standards. If this is the case, it is an important step CalGEM needs to take to prioritize public health—and it may take CalGEM more time to review permits because of their increased authority.
Additionally, CalGEM should require a legally adequate CEQA review for all permits posing significant environmental impacts, not just new drilling. This includes rework permits that keep existing oil and gas wells operational. This is a 43.4% increase compared to the same time period the previous year. Because reworking and re-drilling permits sustain harms to Frontline communities who have lived with the toxic contaminants of oil and gas extraction in their neighborhoods for decades—as well as perpetuating harm to the environment—CalGEM should apply greater scrutiny to these permits, too.
Holding oil and gas operators accountable to the legal requirements of CEQA for all permit types is a baseline protection that should be afforded to all Californians.
The Take Away
While the current slowdown on new drilling permits is a welcome reprieve from California’s usual unabated permitting, Newsom must do more.
He should halt all new oil and gas permits and immediately address existing sources of pollution. Rework permits extend the life of existing wells and add to pollution already affecting Frontline communities. Ceasing the issuance of rework permits—particularly those close to homes, schools, and other sensitive receptors—should be a top priority, and can begin by closing the loophole in CalGEM’s draft setbacks rulemaking that allows these activities.
Finally, Newsom must tackle California’s looming idle well crisis. CalGEM data lists over 40,000 wells in California that remain idle and unplugged, and another 20,000 active oil and gas wells that are marginally producing—each extracting less than 10 Bbls of crude per month. These wells should be plugged and the drill sites remediated.
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