Partner Michael Mills and Chelsea Huffman authored an article in Law360 titled “Inside Calif.’s De Facto Moratorium on Well Stimulation.” The article discusses the enactment of SB4, which requires the Division of Oil, Gas & Geothermal Resources (“DOGGR”) to develop a permitting scheme to regulate the use of various oil- and gas-extraction methods, including acid matrix stimulation and hydraulic fracturing.
The permanent regulations are due by the first half of 2015, and SB4 was written to avoid a stop to well stimulation during their development. However, the interim requirement to provide a groundwater monitoring plan to DOGGR has effectively stymied well stimulation in California, as the agency approved no monitoring plans in the first quarter of 2014, as is required to go ahead with extraction activities in areas with protected water. In addition to lengthy delays by DOGGR in processing and approving the plans, many producers may face potentially insurmountable practical obstacles to developing a compliant plan.
Mills and Huffman conclude in the article that although the state Legislature and governor rejected a moratorium at the end of 2013 with SB4, one has effectively been created by the hasty drafting of emergency regulations for use in the interim leading to what they describe as a “problematic, disconnected process.”
Read “Inside Calif.’s De Facto Moratorium on Well Stimulation,” published on April 14, 2014. (Subscription required.)