American Oil and Gas Reporter - July 2015 - 153

ConventionCoverage: California Independent Petroleum Association

LEFT: Congratulating Robert Pool (center) of the Western States
Petroleum Association for receiving CIPA's Lee McFarland Award
are CIPA Chief Executive Officer Rock Zierman (left) and CIPA
Chairman Ken Hunter (right). RIGHT: Zierman and Hunter congratulate
Tim Crawford of Linn Energy for receiving CIPA's Glenn C. Ferguson
Award. According to CIPA, the Lee McFarland Award is bestowed

According to Ossentjuk, DOGGR staff
have performed the necessary due diligence on injection well applications. "Often, a paper was not created or put in the
right file because a DOGGR geologist or
petroleum engineer would get on the
same page with a company's geologists
or petroleum engineers, metaphorically,"
he said. "But no one took a piece of
paper to the Environmental Protection
Agency in San Francisco."
Unfortunately, he said, DOGGR's failure to do so has created potential problems
because formal aquifer exemptions were
not obtained from EPA for a number of
UIC wells that nonetheless would have
qualified for exemptions had the applications been filed. He noted that EPA in
the early 1980s accepted the 11 aquifers
DOGGR had defined as exempt under
the SDWA, but the division also granted
tacit exemptions in cases where the wells
injected into oil-bearing formations. "But,
there are no cases of any environmental
problems whatsoever in those situations,"
he reported.
According to Candy, DOGGR personnel on staff at the time the state gained
SDWA primacy in 1982 indicated the
division had not shirked any documentation requirements because it had full administrative discretion with regard to hydrocarbon-bearing zones. As for the specific 11 aquifers, he continued, DOGGR
was fully within its legal rights to approve
injection wells.
"There are two versions of the paperwork-who knows how that happened?"
Candy mused. "One version fully exempts

annually to an associate member who has contributed to the viability
of California's independent oil and gas producing industry; the
Glenn C. Ferguson Award is conferred on a producer member who
has contributed greatly to CIPA's success and advanced understanding of and appreciation for the state's industry.

those 11 aquifers, and if there are any
questions subsequent to that, EPA wrote a
letter in 1985 confirming that all 11 were
exempt. It seems to me DOGGR regulators
are fully within their legal authority to
permit UIC projects in those aquifers. It
may not have been as simple as DOGGR
saying it did not need to do the paperwork.
Perhaps-and it remains to be seen, although
there are efforts to get to the bottom of
this-DOGGR actually was acting within
the scope of its authority."

Exemption Process
Quirk suggested the evidence showed
that when they granted such exemptions,
DOGGR staff did so according to their
scientific expertise and desire for practical
regulatory oversight. "They did not turn
out permits willy-nilly," he assured.
Even so, Ossentjuk recounted, EPA
for years has faulted DOGGR for paperwork deficiencies, and in 2014 commanded the division to get its UIC house
in order. Meanwhile, he suggested, lawsuits and political theater have been introduced into the equation. Earlier this
year, he continued, EPA and DOGGR
reached a memorandum of agreement
that separated noncompliant UIC wells
into three categories, and then set dates
and proper aquifer exemption criteria.
"If you have wells on that DOGGR
list and have not started your aquifer exemption process, get going on that yesterday because those dates are not going
to change," Ossentjuk advised. "There is
going to be a huge new bureaucratic
backlog in this process. The sooner you

are in line at DOGGR, the sooner you
are going to be in line with the water
board and EPA, and the sooner you will
have the exemption you need to continue
to operate your UIC well. If those dates
come and go, I think some are going to
see cease-and-desist letters from DOGGR."
Candy offered a closer look at the
categories for wells on that DOGGR list
according to the aquifers into which they
were injecting. There will be no aquifer
exemptions for nonhydrocarbon-bearing
aquifers in which the water quality shows
less than 3,000 milligrams per liter total
dissolved solids, he predicted.
"Word on the street is that is gone,"
he reported. "Less than 3,000 mg/l TDS
means the water board protects the water
as municipal and industrial supply. That
is a big problem, and it appears the sacrificial lamb will be these high-quality waters without hydrocarbons that are a potential future drinking water supply. They
will be protected."
Moreover, he continued, exemptions
for aquifers in the second category-nonhydrocarbon zones with TDS levels between 3,000 and 10,000 mg/l-also seem
unlikely. "That it is nonhydrocarbon
means it is going to be tough to meet
SDWA aquifer exemption criteria," Candy
maintained. "You need to show that either
there actually are hydrocarbons, or that
the water is too deep to be produced economically. That is not going to get you
very far in this day and age. Otherwise,
you need to show it is too polluted to be
produced economically, but it needs to
JULY 2015 153



American Oil and Gas Reporter - July 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - July 2015

Contents
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