California Oil and Gas Report

Mexico’s vast reserves of oil and natural gas will be open to exploration by foreign companies beginning in 2015, thanks to a historic change proposed by President Enrique Peña Nieto and approved by Mexico’s Congress on August 6.

The change, which required a revision to Mexico’s constitution, opens the way for global oil companies to access untapped oil reserves that state-owned Pemex (Petroleos Mexicanos) has estimated at 113 billion barrels worth $11 trillion.

In addition, Pemex estimates that five shale fields it has identified hold 460 trillion cubic feet of natural gas, worth $2.2 trillion. One of those fields is just across the border from the richly productive Eagle Ford field in Texas.

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The Division of Oil, Gas, and Geothermal Resources (DOGGR) said on July 18^th that it will conduct a full review of the state’s Underground Injection Control (UIC) Program to ensure it complies with requirements of the Safe Drinking Water Act.

The announcement came two weeks after DOGGR issued emergency orders to shut down 11 Kern County waste water injection wells. It later lifted two of those orders.

The review, which will be conducted in conjunction with the U.S. Environmental Protection Agency (EPA) will take 12 to 18 months, said DOGGR.

The review will examine both previously approved UIC wells as well as current approval practices, to ensure that they are consistent across the state and that injections comply with state and federal laws and regulations. Continue reading →

The final deadline for DOGGR to implement permanent regulations on fracking under SB 4 has been extended by six months, to July 1, 2015.

The change was incorporated in a little-noticed “trailer bill” amending the state budget, passed and signed into law on June 20th by Gov. Jerry Brown, which took effect immediately.

The revised deadline avoids a potential scheduling problem for DOGGR (the Division of Oil, Gas and Geothermal Resources of the California Department of Conservation.) The previous deadline for the agency to issue permanent regulations, as specified in SB4, was January 1, 2015. However, the deadline for DOGGR to file a required statewide Environmental Impact Report on well stimulation activities is July 1, 2015.

Thus DOGGR could have been obliged to issue final regulations under Senate Bill 4 several months before the completion of the EIR – with the possibility that the findings in the EIR could then have required revisions to those just-issued regulations. Setting both deadlines to the same date eliminates that potential conflict.

SB4 required DOGGR to establish temporary regulations for all well stimulation treatments including hydraulic fracturing and acidizing wells. It also establishes requirements for testing, monitoring, public notice, and permitting.