Bill Would Clear Path for Oil Project Approvals

- Bill Would Clear Path for Oil Project Approvals

Monday, July 11, 2011
The Bakersfield Californian
by John Cox

A bill advancing through the state Legislature could help Kern County's oil industry by providing a clearer path of approval for certain drilling-related activities.

Senate Bill 682, sponsored by Sen. Michael Rubio, D-Bakersfield, proposes to assign the state Division of Oil, Gas and Geothermal Resources direct responsibility for overseeing underground injection of produced gases, a common if controversial method of disposing of oil field byproducts such as hydrogen sulfide, or sour gas.

DOGGR, as the division is known, has regulated such projects for more than a decade. But since new leadership was installed at the division two years ago, a backlog of underground injection applications has grown to about 200, frustrating oil companies and local politicians who say the delays are stalling investment and potential job growth.

"We want someone to process those applications -- either deny or approve them so we can put people to work across the San Joaquin Valley and, particularly, Kern County," Rubio said in a phone interview.

DOGGR has taken no official position on the bill and therefore declined to comment. But earlier this year the division acknowledged a slowdown in project approvals, a situation it blamed on inadequate staffing and the complexity of engineering and geological issues involved. It has also pointed to a lack of clear legal authority to regulate what it considers an environmentally risky practice that has the potential to contaminate sources of drinking water.

On Thursday, despite opposition by the Sierra Club, the bill cleared the Assembly Environmental Safety & Toxic Materials Committee by a vote of 8-0. It is scheduled for consideration soon by the Assembly Natural Resources Committee.

Representatives of the Sierra Club's California lobbying arm could not be reached for comment Friday.

The head of the California Independent Petroleum Association expressed hope that the bill, if signed into law, would help expedite oil companies' injection applications, some of them as much as two years old.

"This allows (DOGGR) to consider those old permits," CIPA CEO Rock Zierman said.

"We really appreciate Sen. Rubio's leadership on this," he added.

Rubio said the bill represents the "first step" in a longer process of addressing DOGGR's concerns about underground injection projects. Related issues still to be worked out, he said, regard how California oil producers handle toxic waste, water and other environmental issues.

Copyright (c) 2011, The Bakersfield Californian

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