Bloomberg News

California Fracking Moratorium Clears Key Committee in Assembly

April 29, 2013

A California Assembly panel approved a moratorium on hydraulic fracturing by oil and natural-gas producers until the most populous U.S. state assesses health and environmental concerns.

The bill by Adrin Nazarian, a Los Angeles Democrat, is opposed by the oil industry through the Western States Petroleum Association, which says hydraulic fracturing has been used safely for more than 60 years. Democrats on the Natural Resources Committee approved the measure 5-3 on a party-line vote late yesterday. Democrats control the Legislature.

Fracking, a drilling technique that forces millions of gallons of water, sand and chemicals deep underground to free trapped oil and gas, has come under fire from environmentalists as a threat to water resources. California -- the fourth-largest oil-producing state -- is working on industry-backed standards to allow its use to continue. New York and New Jersey have moratoriums in place.

“We must identify the risks and ensure the public that we are doing everything in our power to protect them,” said Assemblyman Richard Bloom, a Santa Monica Democrat who proposed one of two other measures that would place a moratorium on fracking. Both also passed the committee.

Nazarian’s bill would require the secretaries of the California Natural Resources Agency and the California Environmental Protection Agency to lead a study to determine whether fracking can be done without risk.

“The oil and gas industry is one of the few economic drivers this state has left, and legislative Democrats are ready to regulate it out of existence,” said Assemblywoman Shannon Grove, a Republican from Bakersfield

A separate bill pending in a Senate committee would allow fracking to continue, but impose a moratorium if the state’s Natural Resources Agency fails to complete a comprehensive scientific study on the potential risks of fracking by 2015.

California’s Conservation Department, which oversees oil and gas production, released proposed rules in December for storing and handling fracking fluids, well monitoring after fracking and preventing water contamination.

California’s Monterey Shale formation contains an estimated 15.4 billion barrels of recoverable oil. About 100,000 people in California worked in oil and gas production in 2009, generating about $5.8 billion in revenue from excise and income taxes, according to the Senate report. Developing the Monterey Shale may mean 2.8 million more jobs and $24.6 billion in state and local revenue by 2020, according to a report from the University of Southern California.

To contact the reporters on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net; Alison Vekshin in San Francisco at avekshin@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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