Oil company fined $60,000 for illegally discharging fracking fluid

By Dan Bacher  | November 20, 2013 |

The oil industry in California has constantly claimed that fracking (hydraulic fracturing) for oil and natural gas is "safe" and doesn't harm the environment. 

"An honest appraisal of the science and common sense around hydraulic fracturing leads to a conclusion the technology we’ve used without harm in California for 60 plus years is safe and its benefits a blessing," said Catherine Reheis-Boyd, President of the Western States Petroleum Association (WSPA), earlier this year. 

"Oil drilling activities in California are strictly regulated by several agencies and the state’s oil producers are working closely with the government to develop even stronger protections to ensure the vast potential of the Monterey Shale can be realized," she claimed. (http://www.wspa.org/blog/post/new-report-monterey-shale-promises-unprecedented-economic-benefits-california) 

However, Reheis-Boyd fails to mention that the discharge of fracking fluid, composed of toxic chemicals that the oil industry refuses to disclose because they consider them a trade secret, presents an enormous threat to groundwater supplies, streams, fish and wildlife. 

In the most recent example of the threat to the environment and human health that fracking poses, the Central Valley Regional Water Quality Board on November 15 ordered an oil company, Vintage Production California LLC, a subsidiary of Occidental Petroleum Company, to pay a $60,000 penalty for discharging hydraulic fracturing fluid into an unlined sump in violation of the California Water Code. 

The penalty is the result of a settlement agreement between Vintage and the Water Board's prosecution team, and is the maximum penalty allowable under the state Water Code. 

"The prosecution team’s investigation determined that Vintage periodically discharged saline water, formation fluids, and hydraulic fracturing fluid to an unlined sump for 12 days," according to a Water Board news release. "The sump was next to a newly drilled Vintage oil well near the City of Shafter in Kern County. The prosecution team concluded the discharge posed a threat to groundwater quality and that Vintage violated the Water Code for the unpermitted discharge of wastewater to land." 

The investigation that led to the settlement began immediately after a YouTube video at http://www.youtube.com/watch?v=mxb671gbmkY (Preview) was brought to the prosecution team’s attention. 

The team issued an investigative order under Water Code Section 13267 that required Vintage to provide a technical report with specific details about the operation of the well and the discharges to the sump. 

After reviewing the submitted technical information, the prosecution team issued a Notice of Violation to Vintage for the discharge of fluids to the sump for 12 days (September 30 through October 11, 2012) in violation of General Waiver Resolution R5-2008-0192 and Water Code Section 13350, according to the Water Board. 

“The discharge of high-salinity water to unlined sumps in areas with good quality groundwater, such as at the Vintage Production site near Shafter, is not consistent with the Tulare Lake Basin Plan,” said Central Valley Water Board Executive Officer Pamela Creedon. “We are concerned that similar discharges may have occurred elsewhere throughout the Central Valley." 

"Past and future drilling operations will be evaluated to ensure that operators are in compliance with Basin Plan policy. Additionally, we are presently revising General Waiver Resolution R5-2008-0192 to more specifically address oil field drilling fluid discharges to unlined sumps located in the Central Valley," she stated. 

Creedon said Vintage agreed to cease discharging to unlined sumps in agricultural areas - and the company is "voluntarily investigating" the leaching potential of the solidified material in the closed sump. 

Opponents of fracking point out that incidents like this one will become increasing common as oil companies ramp up fracking and acidizing operations to extract oil from Monterey Shale deposits in the Central Valley and coastal areas. On September 20, Governor Jerry Brown signed Senator Fran Pavley's Senate Bill 4, legislation that gives the green light to the expansion of fracking operations in California. 

The $60,000 fine is just chump change for an oil company like Occidental. The Los Angeles-based company said earnings in the third quarter of 2013 jumped more than 14% as domestic oil production increased and gas prices rose, according to the LA Times. 

"The company reported a profit of $1.58 billion, or $1.96 a share, in the three months ended Sept. 30," the LA Times reported. "That was compared to $1.38 billion, or $1.69 a share, from the same quarter a year earlier. Sales jumped 8.1% to $6.45 billion." (http://www.latimes.com/business/money/la-fi-mo-occidental-petroleum-earnings-20131029,0,6904299.story#axzz2l13UfZxN) 

The oil industry, represented by the Western States Petroleum Association, is the largest and most powerful corporate lobby in Sacramento. Big Oil wields huge influence over the Legislature, Governor's Office and state agencies through lobbying, campaign contributions and domination of regulatory processes, such as Reheis-Boyd's chairing of the Marine Life Protection Act (MLPA) Initiative Blue Ribbon Task Force to create so-called "marine protected areas" in Southern California. 

Chevron, the Western States Petroleum Association and Aera Energy LLC spent the most money of any organizations or companies lobbying legislators in the third quarter of 2013, according to California Secretary of State documents. 

Chevron spent $1,696,477, the Western States Petroleum Association (WSPA) spent $1,269,478 and Aera Energy LLC spent $1,015,534. That’s a total of $3,981,489 just between July 1 and September 30, 2013. In the first three quarters of 2013, WSPA alone spent a total of $3,578,266 on lobbying legislators. (http://cal-access.sos.ca.gov/Lobbying/Employers/Detail.aspx?id=1147195&session=2013&view=activity) 

Before the release of third quarter lobbying expenditures, a report released by the American Lung Association revealed that the oil industry lobby has spent $45.4 million in the state influencing legislators since 2009. The Western States Petroleum Association (WSPA) alone has spent over $20 million since 2009. (http://blog.center4tobaccopolicy.org/oil-lobbying-in-california) 

Oil and gas companies spend more than $100 million a year to buy access to lawmakers in Washington and Sacramento, according to Stop Fooling California, "an online and social media public education and awareness campaign that highlights oil companies’ efforts to mislead and confuse Californians." 

The draft Settlement Agreement and Stipulation for Entry of Administrative Civil Liability Order R5-2013-0587 (Stipulated Order) is available for a 30-day public review and comment period prior to consideration by the Central Valley Water Board. The Stipulated Order is at: http://www.waterboards.ca.gov/centralvalley/board_decisions/tentative_orders/vintage_stip/vintage_stip.pdf