Source: http://www.lexology.com, October 8, 2013
By: Philip L. Comella and William R. Schubert, Seyfarth Shaw LLP
California is the most recent state to pass a new, comprehensive statute with which to regulate the hydraulic fracturing industry.
The California statute is making headlines, and for a good reason: California contains an estimated two thirds of the nation’s shale-rock oil deposits. Further, since many details underlying the law remain unsettled, the stakes remain high – particularly in light of the fact that the statute authorizes civil penalties of up to $25,000 per violation.
The statute requires well operators to obtain permits before drilling. Permit applications must provide information including: the specific identification of the fracking well; the precise confines of the drilling activity; the names of any chemical constituents and fluid additives to be used; and written plans for the management of wastewater and the monitoring of groundwater.
The law relies heavily on public disclosure. Not only must well operators disclose information that will ultimately be made public (subject to assertions of trade secret protection) in the application, they also must turn over records after the close of operations. These will include “all electrical, physical, or chemical logs, tests, or surveys.” The law also provides that basic about the activity at each individual fracking well be published to an online database. Many operators already provide this sort of information to the public voluntarily. (See http://fracfocus.org/).…