Oil trade group sues state over fracking permit denials

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Oct. 11—A leading oil-industry trade group has taken aim at Gov. Gavin Newsom's de-facto fracking ban with a lawsuit in Kern County Superior Court that mirrors accusations county government made in a complaint filed a month ago.

The 91-page lawsuit Western States Petroleum Association filed Friday repeats claims that the state's recent denial of fracking permit applications oversteps the administration's authority as laid out in the state Constitution. The suit alleges the state's move to block fracking contradicts the state's earlier findings on well stimulation treatments, and that under the state Public Resources Code the state is supposed to encourage oil production, not ban it.

Filed on WSPA's behalf by San Francisco-based law firm Pillsbury Winthrop Shaw Pittman LLP, the suit names Newsom as a defendant along with State Oil and Gas Supervisor Uduak-Joe Ntuk; his agency, the California Geologic Energy Management Division; and the director of the state Department of Conservation, David Shabazian.

"Unfortunately, the State of California continues to take arbitrary actions that deliver little positive benefits for our fight against climate change but imposes big impacts on Californians — to our finances, to our freedoms, essentially to how we live and work every day," WSPA President and CEO Catherine Reheis-Boyd said in an emailed statement.

"CalGEM's decision to deny future permits for (well stimulation treatments such as fracking) operations ignores the law and is contrary to all scientific studies and evaluations that have been conducted by CalGEM itself as well as by other independent scientific bodies," she added.

The governor's press office, noting in an email Monday that the state is dealing with a disastrous oil spill off California's coast, called the lawsuit an "attempt by the oil industry to force even more drilling upon our state." It called the legal action "a direct threat to our communities and the environment."

"California's leading the nation's clean energy future, implementing the most ambitious agenda to phase out oil drilling, fracking, gas-powered cars, the state's dependence on oil both foreign and domestic, and more," the email said.

A letter Ntuk sent last month to Aera Energy LLC explained his stated reasons for denying the Bakersfield-based oil producer's fracking applications. In it, CalGEM's director said he rejected two sets of Aera's fracking applications out of concern for climate change, human health and the economy. It also asserted Ntuk has discretion to deny applications as he deems appropriate.

Fracking blasts water, sand and sometimes toxic chemicals underground to open access to oil and gas reservoirs. Environmental and environmental-justice groups contend the process puts air and water quality at risk, while industry supporters say there's no evidence of any such harm in California, which is home to some of the nation's strictest rules on the practice.

Last fall Newsom asked the state Legislature to send him a bill to ban fracking by 2024. When the legislation that arose died in committee, the governor issued an executive order to begin a rule-making process that would accomplish the same thing by the same deadline.

WSPA said fracking has been performed safely in California for decades and that it's important for production in the state's mature oil fields. The lawsuit said Newsom's de-facto ban — no WST permit has been approved by the state in more than six months, it stated — amounts to an arbitrary and capricious "abuse of discretion."

The lawsuit tries to make the case that the administration's denial of fracking applications not only harms oil producers that have invested in developing and extracting oil-field resources, but that it sacrifices jobs and government tax revenues, particularly in Kern, the heart of West Coast oil production.

It also asserts, based on a state-commissioned scientific study, that increasing California's reliance on imported oil from overseas worsens air quality, safety and spill risks while having a higher negative impact on poor neighborhoods.