Approvals for New Oil and Gas Wells up in California
SAN FRANCISCO — Despite pushing back against the Trump administration’s plan to expand oil extraction in California, the state has issued 190% more oil and gas drilling permits in the first six months of 2020 than were approved under Gov. Gavin Newsom’s first six months in office, two advocacy groups said Wednesday.
The agency that oversees oil and gas drilling in California issued 2,691 permits to drill new wells or rework existing ones the first half of this year, according to an analysis of state data by Consumer Watchdog and FracTracker Alliance.
It also found that several months after announcing a crackdown on fracking projects, the state issued 48 new permits for hydraulic fracturing.
The groups, which maintains a website to keep track of the permits, said the trend conflicts with California’s environmental mandate and Newsom’s campaign promise to reduce reliance on fossil fuels. However, state officials counter the groups misinterpreted the data and asserted that the number of new drill permits were slightly up by 7 percent, from 1,475 in the first six months of 2019 to 1,579 in the same period this year.
“Under state law, if a company applies for a permit, we review and if it meets the criteria in our regulations, we issue a permit,” said Uduak-Joe Ntuk, oil and gas supervisor at the California Geologic Energy Management Division.
“We are a government agency, this is what we do. It’s not a subjective political decision. We have to follow the law,” he said.
He added that oil production in California was at its lowest level than anytime in the last four decades and that the number of permits issued for sealing old wells outpaced permits for new wells.
Ntuk was appointed the state’s top oil and gas regulator last October after the governor fired his predecessor, Ken Harris, over a report by the advocacy groups that said fracking permits dramatically increased. Newsom also ordered an investigation into reports that employees in the division own stock in the companies they regulate — something Ntuk said he couldn’t discuss because the probe is ongoing.
The Total Number of New Wells Drilled in the First Half of 2020 Is Still 9.2% Higher Than the First Half of 2019
In November, the governor announced a moratorium on fracking projects pending review by scientists at the Lawrence Livermore National Laboratory to determine if they meet regulatory standards.
Liza Tucker with Consumer Watchdog said she believes the fracking permits were issued because the regulatory standards are weak.
The permits expire in a year, and they don’t necessarily lead to actual oil extraction, Tucker said, particularly as the coronavirus pandemic drives down oil prices and demand.
Nonetheless, the total number of new wells drilled in the first half of 2020 is still 9.2% higher than the first half of 2019, when Newsom had little oversight of permitting policies, the groups said.
Ntuk countered that the 30 new wells drilled in the first half of 2020 is down 90 percent compared to the 302 wells completed in the first half of 2019.
Tucker said she suspects oil companies are applying for new permits to draw new investors in the middle of a financial crisis.
She said the state was granting permits to companies without guarantees they will cover the cost of sealing old wells that pose pollution risks.
“We should be seeing fewer permits issued,” she said. “That would be the natural result if we made oil companies pay for the true cost of doing business in California by putting up the money necessary to plug and clean up a well when they get a permit to drill one, as state law allows.”
Ntuk said the state enacted new regulations in April 2019 to push operators to properly maintain or plug idle wells.