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Oil and gas regulators admit to massive oversight failures in new report

CULVER CITY, CA - APRIL 25:  Car lights are seen streaking past an oil rig extracting petroleum as the price of crude oil rises to nearly $120 per barrel, prompting oil companies to reopen numerous wells across the nation that were considered tapped out and unprofitable decades ago when oil sold for one-fifth the price or less, on April 25, 2008 in the Los Angeles area community of Culver City, California. Many of the old unprofitable wells, known as ?stripper wells?, are located in urban areas where home owners are often outraged by the noise, smell, and possible environmental hazards associated with living so close to renewed oil drilling. Since homeowners usually do not own the mineral rights under their land, oil firms can drill at an angle to go under homes regardless of the desires of residents. Using expensive new technology and drilling techniques, California producers have reversed a long decline of about 5 percent annually with an increased crude flow of about 2 1/2 million barrels in 2007 for the first time in years.  (Photo by David McNew/Getty Images)
David McNew/Getty Images
Car lights are seen streaking past an oil rig extracting petroleum. (Photo by David McNew/Getty Images)

In a report released Thursday, state officials admit the Department of Conservation’s oversight of wastewater injection wells related to oil and gas has failed because of inadequate recordkeeping, understaffing, inconsistent enforcement, inaccurate permitting and poor monitoring.

But the Division of Oil, Gas and Geothermal Resources (DOGGR) insists that reforms are underway, and that no wells in Southern California are contaminating drinking water aquifers.

The disclosures come in a required report to legislators about oversight of underground injection control program for the oil and gas industry. In addition, the Department of Conservation announced an overhaul of its oil and gas regulatory program that includes digitizing records and adding staff.

“This was an extensive report,” said state oil and gas supervisor Steven Bohlen. “We dug deeply, we left no stone unturned, and this was a very comprehensive effort.”

Oil and gas in California frequently lies below the ground, intermingled with briny groundwater. For 32 years, state officials permitted companies that produce oil and gas to pump leftover wastewater back into the ground, on the belief that federal officials had granted exemptions from laws that protect groundwater aquifers from contamination. But the federal Environmental Protection Agency says no exemptions were granted.

This year, the E.P.A. and the state Department of Conservation have been reviewing records for thousands of wells for potential violations to the federal Safe Drinking Water Act.

Around the state, conservation officials have ordered 23 wells shut down for federal violations. Bohlen says testing for potential groundwater contamination near those sites is ongoing, but has not yet revealed problems.

The newly released report includes specific analysis for District 1, which covers much of Southern California. Regulators’ self-evaluation found “systemic problems in the execution” of the program.

Some oil industry injection projects have no reviews on file. Others haven’t been reviewed for more than 20 years.

At least 19 projects with injection wells have no annual reviews on file at all, and regulators admit that some older injection wells have not been inspected in decades.

Seventy-eight percent of projects lacked an “area of review”analysis, in which officials inspect the area around a potential injection well to determine whether what gets injected into the ground could flow to drinking water supplies or other sensitive areas. By regulators’ own reckoning that’s crucial to ensuring that injection wells don’t threaten to contaminate nearby underground water supplies. And in some cases, they deferred looking around where the wells were going in until the wells were already drilled.

State officials insist that the new reports are evidence of reformed regulatory oversight at DOGGR.

“We are in the process of turning the division into a modern, efficient, collaborative science-driven agency that intelligently and consistently regulates oil and gas activities,” said the director of the Department of Conservation, David Bunn.

“The division hasn’t owned up to its responsibilities as a regulator in the past,” Bohlen said. “We’re rapidly moving toward doing that.”

But critics of the state’s effort to date say admitting flaws doesn’t cure the underlying problem.

“From our perspective it’s an unacceptable risk,” says Maya Golden-Krasner, climate staff attorney with the Center for Biological Diversity. “Those wells need to be shut down immediately. And the division needs to do work to actually sample groundwater in Los Angeles to figure out what exactly has been going on due to their lack of oversight.”