Senators scrutinize the state's troubled oversight of oil production, drinking aquifers

Lax oversight by the state has allowed the oil and gas industry to contaminate protected water aquifers and endanger the public, California regulators acknowledged Tuesday while pledging to intensify supervision.

When it comes to a balance between supporting the oil and gas industry in California — the country's No. 3 oil-producing state — and protecting public resources and public safety, "I would suggest that ... there has not been the proper balance between these two mandates" for state oil and gas regulators, John Laird, the state secretary of natural resources, told state senators in a scathing senate hearing. "And this is our chance to get it right."

The U.S. Environmental Protection Agency, meanwhile, set strict new deadlines for California to start dealing with more than 2,000 oil-and-gas industry injection wells that state regulators had allowed to inject into underground water reserves that are federally protected as current or potential sources of water for drinking and irrigation. In an EPA letter made public Tuesday, federal regulators also joined some state lawmakers in challenging state plans to continue issuing new permits for oilfield injection in certain protected water aquifers.

Members of state Senate committees on environmental quality and natural resources convened after critical state and federal reviews, and after news reports by The Associated Press and others, addressing what state records show as decades of loose enforcement and record-keeping gaffes that allowed some oilfield operations to threaten underground drinking-water reserves. An Associated Press review of state records found more than one-third of the state permits granted in apparent violation of the U.S. Safe Drinking Water Act were awarded since 2011.

The state's oil and gas division had become "a flawed agency in many, many ways in terms of protecting the groundwater as it should be. The balance really has gone out of whack," Democratic San Francisco Bay-area Sen. Lois Wolk said.

Sen. Hannah-Beth Jackson, D-Santa Barbara, agreed. "None of this really came to light until there were exposes in the media," Jackson told state water and oil-and-gas regulators. California had a "serious imbalance between the role of the oil and gas industry and the role of protecting the public. This is an endemic problem."

In a statement, state Sen. Fran Pavley, D-Agoura Hills and chairwoman of the senate's natural resources committee, said California's oil-and-gas regulators "continue to ignore the law and regulations. Here we are in the fourth year of a serious drought, and the actions of the oil and gas regulator are threatening the state's precious groundwater supply."

Between last summer and this month, as a federally-mandated state review helped detail the scope of the problems with state oilfield regulation, the state shut down 23 oil-industry injection wells that it found state regulators had permitted to dump oil-industry wastewater into federally protected water aquifers.

Such improper injection had contaminated the affected federally protected drinking water aquifers, Jonathan Bishop, chief deputy director of the state Water Resources Control Board, told the lawmakers. Testing so far has found no sign of the contaminated water reaching nearby water wells, regulators said.

Lawmakers also grilled state regulators on one intensive form of oil production in the state: injection of steam at high pressure to force oil from underground rock formations.

State regulators have acknowledged routinely allowing oil and gas producers to inject steam underground at pressure high enough to crack open underground rock formations, in violation of state and federal regulations, according to a state Senate report prepared for Tuesday's hearing.

The state's use of steam injections in oilfields came under scrutiny in June 2011, when a Chevron worker, Robert David Taylor, fell into a sinkhole of boiling fluid that opened suddenly in a Kern County oil field. Taylor boiled to death, state authorities found.

State lawmakers raised the issue of Taylor's death on Tuesday, and they asked Steve Bohlen, head of the state oil and gas division, if the high-pressure steam injection was indeed illegal.

Bohlen responded that he was not familiar with the particulars of the regulations, but that oil extraction by high-pressure steam was now widespread in the state oil industry. "Our regulations are old. And they haven't kept up with industry practice," he said.

The U.S. EPA letter gives the state until May 15 to complete an assessment of improperly permitted oil-industry wells deemed of the highest risk to drinking water supplies. Federal regulators also told the state to assess its permitting of steam-injection oilfield wells by the same date. Those and several other deadlines in the EPA letter were more immediate than the state's own proposals for action.