First quarter approvals for higher risk oil extraction up 59 percent in California

By Dan Bacher |

Los Angeles, CA — If anybody still believes that California is the nation’s “green” and “progressive” leader as the state’s cities are plagued by the most polluted air in the nation, endangered spring and winter-run Chinook move closer and closer to extinction and the Delta smelt is nearly extinct in the wild, then you must read this: first quarter approvals for higher risk oil extraction wells have risen dramatically over the first 3 months of this year.

That’s right — permit approvals for drilling new Enhanced Oil Recovery (EOR) wells using higher risk steam injection techniques jumped up 59% in the first quarter of 2022 even though California oil production continues to decline, according to an analysis released this morning by FracTracker Alliance. These permits are posted on a map at www.NewsomWellWatch.com.

Moreover, while oil companies continue to apply for permits to drill new wells and to rework them, nearly two thirds of the permits granted by state regulators over the past two years have gone unused, according to a joint press statement issued by Consumer Watchdog and FracTracker Alliance.

“The state continues to approve drilling permits to reach tar-like oil when industry sits on the permits it’s been granted,” said Consumer Watchdog Energy Project Director Liza Tucker. “This makes no sense. Governor Newsom needs to seize this moment and stop all permitting.  This is the moment for a real transition to renewable energy rather than leaving it on the backburner.”

Tucker said California’s oil and gas industry is asking the Newsom administration to streamline the approval of new drilling permits, but the data shows that it is a “disingenuous request.” FracTracker cross-referenced drilled well data sets from the California Geologic Energy Management Division (CalGEM) going back to the start of 2020. It found that of the 2,686 new drilling permits approved by CalGEM since then, 1,689 of them—a whole 63%–currently remain unused.

“Oil and gas companies have plenty of permits to drill but choose to stock more instead,” disclosed Kyle Ferrar, FracTracker’s Western Program Coordinator. “The real agenda for oil companies is clear; use any moment of crisis to lock in decades of future oil dependence that puts an unnecessary burden on the future of the climate and community health. That’s a scenario that both the current climate crisis and war in Ukraine makes clear, we cannot afford.”

According to the latest analysis by FracTracker Alliance of permits approved through December 31, 2021, and posted by Consumer Watchdog at www.newsomwellwatch.org, approvals of all types of oil drilling permits rose 3.2% in the first quarter of 2022 over 2021.

“But approvals for drilling new Enhanced Oil Recovery (EOR) wells using higher risk extractive techniques dependent on steam injection jumped up 59%. (See Table 1 above). Those permits included 16 new steam injection wells, though the majority were for gas storage and disposal wells. Fracking permit approvals ceased altogether, while permits to plug wells rose 62%,” according to Ferrar.

New drilling permits for both oil and gas production and EOR wells rose 36% in the first quarter, while permits to rework existing wells fell 2.9%.  The total number of wells approved by Governor Newsom since January 2019 is nearly 11,000 now, Ferrar pointed out.

Ferrar noted that timeframes for approving drilling permits for new production and EOR wells have been lengthening and the slowdown appears to coincide with a court decision last year that denied Kern County, the heart of the state’s oil drilling, the authority to issue new drilling permits. These applications have now been punted to CalGEM.

“Historically high oil prices usually stimulate production, but while production has surged in some other states, California’s has not expanded. In fact,  the production rate continues to decline about seven percent a year though permitting has stayed consistent,” FracTracker reported. “Spooked by the pandemic downturn and investors heading for the exit, California’s oil industry appears to be concentrating instead on what it can do to tread water by extracting from existing wells to keep production going while cutting costs.”

“It is a sign of stagnation that permit approvals remain on automatic pilot when the industry isn’t even using them. It means once again, the oil industry and the market price of oil is what drives permitting, and not state policy in the context of public health or environmental protections. That’s pathetic,” Tucker concluded.

Background: Big Oil’s Grip on Sacramento

The Western States Petroleum Association (WSPA), the largest and most powerful corporate lobbying group in Sacramento, has spent over $17.5 million alone lobbying the California Legislature and other state officials over the past three years.

In 2021, WSPA spent $4,397,004 lobbying legislators and state officials to serve Big Oil’s agenda, according to data filed with California Secretary of State’s Office.

The association spent $957,137 on lobbying in the fourth quarter of 2021. The money went to an array of in-house lobbyists and outside lobbying firms, topped by Ramball Environ in Philadelphia that received $116,981 in the fourth quarter and $366,864 in 2021.

WSPA spent a total of $8.8 million in 2019 and $4,267,181 in 2020 on lobbying California legislators and officials as thousands of oil and gas drilling permits were approved by CalGEM, the state’s oil and gas regulatory agency: www.citywatchla.com/…

In 2020, even a weak bill recommending health and safety setbacks around oil and gas failed to get through the oil industry-friendly California Legislature.

Then in 2021, another stronger bill, SB 467, failed to pass throughout the legislature because of heavy oil industry lobbying of legislators, including those who had received big campaign contributions from the oil and gas industry. The bill would have banned fracking by 2023 eliminating fracking and instituting mandatory health and safety zones between oil and gas extraction and places where Californians live, work, and study.

The inordinate influence by Big Oil on California politicians and regulators is most dramatically evidenced by the approval of thousands of new and reworked onshore oil and gas well permits by CalGEM, the state’s oil and gas regulatory agency, since Newsom took office in January 2019.

On the same day the LA City Council voted to ban oil and gas wells in city limits, Consumer Watchdog and FracTracker Alliance reported at www.NewsomWellWatch.org that Governor Newsom has approved 10,212 oil drilling permits since he assumed office in 2019. The total is nearly identical to the number of permits Governor Jerry Brown approved in his first three years.

Lobbying is just one of the seven methods that Big Oil uses in California to exercise inordinate influence over California regulators. WSPA and Big Oil wield their power in 7 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) creating alliances with labor unions; and (7) contributing to non profit organizations.

In one glaring example of oil and gas industry officials serving on regulatory panels, Catherine Reheis-Boyd, President of the Western States Petroleum Association, chaired  the Marine Life Protection Act (MLPA) Initiative Blue Ribbon Task Force to create “marine protected areas” in Southern California from 2009 to 2012, as well as serving on the task forces to create “marine protected areas” on the Central Coast, North Central Coast and North Coast from 2004 to 2012.