Oil & Gas Law Alert: California Department of Conservation Issues Discussion Draft Rules for Oil Field Wastewater Injection

On January 21, 2016 the California Department of Conservation, Division of Oil, Gas and Geothermal Resources (“DOGGR”) issued a Notice of Pre-rulemaking Public Comment Period for the development of updates to the regulations implementing the Underground Injection Control (“UIC”) Program. Wells that will be impacted by these regulations, when they become final, will include both: (i) wells used for oil field wastewater disposal, and (ii) wells used for injection of water and steam for the purposes of producing oil and gas.

The Pre-rulemaking Discussion Draft Regulations (“Draft Regulations”) aim to ensure that California is in compliance with the federal Safe Drinking Water Act. One element being proposed to achieve this goal in the Draft Regulations is the adoption of the federal definition for “underground source of drinking water,” as part of the standards for aquifer exemption determinations.

The existing UIC regulations require an operator to obtain a Project Approval Letter from DOGGR prior to commencing any UIC project. The Draft Regulations would impose additional detailed requirements that must be contained in the Letter, and would require DOGGR to periodically review the terms of the Project Approval Letter to ensure UIC project adherence to such terms. Additionally, the Draft Regulations also would require extensive project data to be submitted to DOGGR including a geological study that demonstrates the injected fluid will not migrate out of the approved zones, prior to injection. Operators will need to submit casing diagrams that include the location of the base of fresh water, the base of the underground source of drinking water, and other extensive information. Further, the Draft Regulations would add a new section to the existing UIC regulations that requires injection fluid analysis, which tests for total dissolved solids, metals, and a host of other materials.

The Draft Regulations layout specific requirements for the period of time a well must be shut-in prior to performing a required step rate test. These shut-in periods range from 48 to 72 hours depending on the permeability of the injection formation.

Of particular note, the Draft Regulations would require operators to file a chemical analysis of the injection fluids every two years at a minimum and also when the source of injection fluid is changed or when requested by DOGGR.

Under the current UIC regulations, steam, air, and gas injection wells are exempt from the tubing/packer requirements, which require tubing and packer to be set immediately above the zone of injection. The Draft Regulations propose eliminating these exceptions, subjecting all injection wells to these requirements. Additionally, the Draft Regulations would remove an exception to these requirements when there is no evidence of a freshwater bearing strata.

The Draft Regulations also include a host of new notification requirements. Specifically, operators would have to notify appropriate DOGGR district offices at least 48 hours before performing mechanical integrity tests so that DOGGR staff may witness the operations. Additionally, DOGGR would have to be notified immediately in the event of any tubing, casing, or mechanical integrity failure, or if there is any evidence of migration of injection fluid to an unpermitted zone.

Public comments on the Draft Regulations closed on February 19, 2016. Comments are being reviewed and considered as DOGGR updates the UIC regulations.

If you have any questions about the content of this alert, please contact a key contributor.

This article was revised on February 1, 2017 to correct the date of the issuance of the Notice of Pre-rulemaking Public Comment Period and to indicate that comments are currently being reviewed.