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Why This Rally In Oil Won’t Last

Why This Rally In Oil Won’t Last

Oil prices rallied on the…

Chevron And Occidental Start Bidding War For Anadarko

Chevron And Occidental Start Bidding War For Anadarko

Occidental Petroleum said on Wednesday…

Environmentalists Decry California’s Fracking Rules

Amid intense rivalry between the oil industry and the agricultural industry, regulators in the state of California have released long-awaited proposed rules on fracking, inviting acceptance from oil and gas companies and harsh criticism from environmentalists.

The draft rules require fracking to undergo strict monitoring and have earned criticism from both sides of the fence in California.

According to the new regulations, state environmental officials will be teamed up with air quality regulators and regional water boards to track potential problems related to fracking operations, and wells undergoing hydraulic fracturing will be monitored both before and after the process.

Oil companies will be required to implement groundwater testing and to notify landowners before fracking procedures begin.

The regulations also come with disclosure obligations regarding the chemicals used in fracking. Companies would also be required to disclose the chemicals used and acquire permits before they start the fracking.

The rules are set to take effect in 2015, with emergency regulations that companies will have to comply with beginning in January 2014.

"Overall, you'll find these regulations include the strongest and most comprehensive public protections of any oil- and gas-producing state," said Mark Nechodom, director of the California Department of Conservation, which issued the proposed rules.

While oil and gas companies aren’t exactly celebrating, with the overall perception that the new rules are too stringent, the announcement of the draft regulations is being accepted as par for the course given the public opposition to fracking. And for the industry, the reward in the form of the San Joaquin Valley Monterey Shale is worth the regulatory headache.

"These regulations are extensive but strike the right balance," media quoted Catherine Reheis-Boyd, president of the Western States Petroleum Association, as saying.

 “There are no pipelines that bring crude oil to California – we either produce it here and provide jobs, improve the economy and become more energy secure or it comes by tanker from foreign sources. SB 4 provides for responsible development of a much needed resource for California,” Reheis-Boyd noted.

Environmentalists, however, say the new regulations miss the mark and are too soft.

"At best, these regulations can be described as a mixed bag,” Kathryn Phillips, state director of the Sierra Club, told reporters. ”At worst, they provide another example of an agency's continued deference to a regulated entity, even at the expense of public health and the environment.”

The Center for Biological Diversity’s Kassie Siegel, was also highly critical of the proposed fracking regulations, saying they would “leave California’s environment and public health horribly exposed to fracking pollution.”

“These rules mostly take the narrowest, most oil industry-friendly approach possible under state law to governing fracking. They will permit fracking to spread across the state, endangering our air, water, communities and climate. The only safe way forward for California is a halt to this inherently dangerous process.”

By. James Stafford of Oilprice.com



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