Moratorium was killed by moderate democrats and “jobs” talk

by Brian Leubitz

Despite the lack of actually attainable oil, the oil industry is still protecting its right to pump vast amounts of water into the ground to try to get at what little is available. In an all out press this week, the oil lobby killed the moratorium:

Sen. Holly Mitchell, D-Los Angeles, argued that her measure amounted to hitting “pause” on an oil extraction method that has raised concerns among environmentalists as it’s become more common in California and across the nation. …

Mitchell’s bill failed when four business-friendly Democrats voted against it and three more Democrats withheld their votes. Its defeat illustrates the influence big business has on moderate Democrats in the California Legislature. Some of the same lawmakers also cast swing votes in the Senate Wednesday that killed bills to limit evictions in San Francisco and require the labeling of genetically-modified foods.(SacBee CapAlert)

In a state where Democrats are increasingly ascendant, the fight ends up within the party. The state party is officially on the record supporting a moratorium, but the legislators (and the little well-heeled birdies whispering in their ears) haven’t quite gotten the memo.

Troubled campaign looking for some sort of boost

by Brian Leubitz

The gubernatorial candidate from Wall Street, Neel Kashkari, is struggling in the polls and fundraising is running dry. So, where to turn? How about trying to get some cash from the petroleum industry with some timely shout outs to his corporate friends in the business:

Republican gubernatorial candidate Neel Kashkari toured a drilling technology company here Wednesday and promised to rebuild the state’s economy in part by improving the business climate for oil and gas.

In the last three years that Jerry Brown has been governor, California has increased its crude oil production 3 percent to 199 million barrels, he said. During the same three years, Texas has increased its production 77 percent to 941 million barrels, and North Dakota has hiked production 105 percent to 313 million barrels.

California’s economy is improving slowly, Kashkari said, but added that far too many Californians remain out of work because the state isn’t business-friendly.(Bakersfield Californian)

Well, that is all well and good, but the numbers that the Kashkari campaign passed off in a press release are not really relevant. Even petroleum executives would allow that each state has different petroleum reserves. Not all wells are created equal. Part of that is the regulatory environment, but fracking is a technology that aims to get at deposits with a wildly varying levels of accessibility. Monterey shale isn’t the same as the deposits in Texas or North Dakota, and there are many other considerations. Like, hey, the fact that we are in a big drought. KQED has a great report on that subject in both audio and text formats.

The potential for higher water use doesn’t sit well with some San Joaquin Valley farmers. “They’re competing for the same water that we’re using for our farms,” says Keith Gardiner. “That’s taken away from the farm fields.”

“It is an added pressure,” says Greg Wegis of Wegis and Young, a farming operation near Bakersfield. “From what I’ve seen, in some of the fracking wells, they’re using 3-to-4 acre-feet per well. That’s not helping the situation.”(KQED)

But Kashkari has very little to work with. Brown has a huge warchest, and Donnelly is still polling above him. Kashkari needs more cash and attention. He can claim to be addressing with an appearance on Squawk Box, but appearing on CNBC won’t make the kind of big shake up that he needs to this race. So, why not try pandering to petroleum interests. It won’t help him win the governor’s office, but maybe he can squeeze into the November top-2.

Considering the recent growth of “salt mining”

by Brian Leubitz

Even with recent rains, California is continuing to suffer from a historic drought. This lack of water has opened up a new front of attack on fracking technology, which suddenly is coming under scrutiny for the massive consumption of water it requires in order to break apart shale to release oil.

Anti-fracking activists are beginning to connect the dots between the drought and fracking. In addition to my own writing on the subject, a opinion piece in the community newspaper Oakland Local  shows how grassroots opposition to the fracking due to its effect on water supplies is gaining traction.

And it’s not just at the local level. Just a  few weeks ago, the Los Angeles Times examined how fracking is creating water supply issues in Colorado, and predicted the same may happen in California. And in Sacramento, Senators Mark Leno (D-San Francisco) and Sen. Holly Mitchell (D-Los Angeles) have introduced legislation to put a moratorium on fracking in California in part because of its potential impact on water supplies.

“A moratorium on fracking is especially critical as California faces a severe drought with water resources at an all-time low,” Leno told Reuters News Agency, “We are currently allowing fracking operations to expand despite the potential consequences on our water supply, including availability and price of water, the potential for drinking water contamination and the generation of billions of barrels of polluted water.”

Meanwhile, Assemblyman Marc Levine (D-Marin) has unveiled a fracking moratorium bill that he ties directly to the drought.

“We have to decide what our most precious commodity is – water or oil?,” Levine told Reuters. “This is the year to make the case that it’s water.”

Nationwide, the impact of fracking on water supplies has been staggering. The Environment America Research and Policy Center estimated last fall that at least 250 billion gallons of water has been used in fracking operations for 80,000 wells in 17 states.

That’s why a Tetra Technologies project in Southern California is beginning to attract attention. The Texas-based company has filed paperwork for a project in San Bernardino County with hopes of adding five additional production wells in order to expand its sodium chloride (aka salt) and calcium chloride mining production by 20 percent. (Both sodium chloride and calcium chloride are widely known to be chemicals used in fracking.)

The company’s January 2013 Mining Plan Amendment would seem to fit in with Tetra Technologies’ recent growth in the fracking industry. Earlier this month, it bought WIT Water Transfer, a firm that provides water services for fracking. Last year, it purchased Patterson-UTI Energy Inc.’s fracking services unit for $42.5 million in 2012. Yet the company has said little, billing itself as a “salt mining operation” to anyone who asks.

These moves haven’t gone unnoticed on Wall Street. Analyst Travis Holom of the popular Motley Fool financial column focused on Tetra’s recent stock gains by noting:

“Investors clearly like the growth opportunity the larger company has ahead. Texas is the big growth market right now in fracking, and TETRA’s services will be a key piece of that growth. It’ll take a while to see the financial impact, but given the growth expected next year, I think shares have room to run higher, especially as natural gas drilling picks up nationwide.”

Tetra clearly has high hopes for expanding its operations in San Bernardino. That’s why the potential environmental impacts, both locally and globally, of the proposed expansion may be cause for alarm.

Yet San Bernardino County hasn’t seemed to be taking the necessary steps to ensure full Tetra Tech’s full compliance with the California Environmental Quality Act. It’s unclear what, if any, mitigation be required. Hopefully, answers will emerge soon.

Fracking requires vast amounts of water, where it will come from in a parched state

by Brian Leubitz

I’ve been writing a lot about the drought, more than I’ve wanted to recently. But the hits just keep on coming. In recent news, there is word that up to two million acres may be apportioned no water at all, thereby made to lie fallow. Of course, some of this is simply mandated by mathematics. To give enough water to the best farmland, you must let some lie fallow. The Republicans argue that we can simply take from the water we release to the rivers and the Bay, but that simply pits other interests against each other, most notably fishermen, of both the sporting and commercial varieties. George Skelton has a good take on this:

Don’t blame the little fish. And don’t call it the Central Valley.

Both comments, repeated incessantly, were irritants during President Obama’s visit to parched California farm country last week.

The president was there-in the San Joaquin Valley-to cuddle with water hogs. The hogs are large growers who use lots of water, have just about run out and are angry because they’re being denied other people’s. And they keep complaining that the government is favoring a little “bait fish” over farmers.

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So water deliveries have been restricted not just for smelt, but also to protect salmon and the coastal fishing industry. It’s not about farmers vs. fish. It’s about farmers vs. fishermen. Or almonds vs. salmon. (LA Times / George Skelton)

Read the whole Skelton piece, it is a refreshingly honest take on the various interests that you don’t often see these days. Water interests are varied, and can’t simply be boiled down to farmers vs smelt. Skelton rephrases that debate as “almonds vs. salmon”, a far more apt analogy. But, there is another huge water hog wating to join the queue for our very limited trough: the fracking industry.

Of course, water usage isn’t probably the first concern of most environmentalists, myself included, with respect to fracking. The issues are deep and pervasive, there are many questions that remain unanswered. Issues of safety, water quality, and seismic stability are far from fully researched and should give the state pause. This is especially true in the days after a major fracking accident in Pennsylvania. (But don’t worry, they’ll give you a free pizza)

In places like Pennsylvania, where there is plenty of water for the moment, this isn’t that big of an issue. But, the Times looks to Greeley, Colorado, itself in the midst of a drought. While it is not as severe as our own right now, water is always precious in the West. It takes a lot of water to operate hydraulic fracturing (thus the hydraulic part of that phrase):

Last fall the Environment America Research and Policy Center estimated that at least 250 billion gallons of water had been used since 2005 in the estimated 80,000 wells in 17 states. Drought-prone Texas led the way with at least 110 billion gallons.(LA Times / Jenny Deam)

As we move forward with hydraulic fracturing in what is expected to be a large reserve of natural gas in our Monterey shale, perhaps Alex Prud’homme asks the right question, will it be a boom or a boondoggle. It is imperative that we consider all the costs, both internal and external, before we move forward with any plan to aggressively tap our shale.