An Analysis of the Formulation of California Senate Bill
Chapter 5
Discussion
SB 4 is the first California law to address the issue of hydraulic fracturing or fracking for natural gas in California. The fracking method had been used in California for several years without any regulation (Freyman, 2014, p. 59). Therefore, the research studied the possible reasons the issue became a part of public conversation, and finally reached the agenda setting level of the California legislature. And, only that, the issue became law in California. Well simulation is the term used in SB 4 to describe three types of the procedure hydraulic fracturing, acid matrix stimulation, and acid fracturing. Well simulation is defined by the law as the “treatment of a well designed to enhance oil and gas production or recovery by increasing the permeability of a formation” (Dettmer, p. 4). Hydraulic fracturing treatment is described as the “injection of fluid at high pressure, sufficient to fracture reservoir rock” (Dettmer, p. 4). The public concerns that strongly engaged the public in the issue of hydraulic fracturing were found to include the following.
- The effect of fracking water use on already water stressed areas of California.
- The rising price of gasoline.
- The amount charged for gas taxes.
- The amount charged for resource surcharges revenue.
- Employment trends in California including the number of California jobs lost due to the unemployment rate.
- The lawsuits taken to California courts based on the perceived risk to the environment.
Water
Water became a great concern to California residents because water stressed areas were the origin of wildfires that raged across both rural and residential areas. From the point of view of the petroleum operators, 98 percent of the wells were exposed to water risks from. The point of view of the public was that water was becoming scare causing drought that led to wildfires. Farmers are especially hard hit by water stress from January 1, 2011 to May 31, 2013. Fifty percent of the fruits and vegetables sold to U.S. consumers are grown in the portion of the water stressed area that is used for agriculture (Freyman 2014, p. 59).
Water is an especially interesting issue because both the California public and the petroleum operators have large demands for water. The top three petroleum operators that use the most water in water stressed areas are Occidental, Shell and Exxon (Freyman, 2014, p. 59). Before fracking became common in California, the time it took an area to become water stress was dependent on natural causes. On the other hand, from the 1960s until 2013 groundwater was depleted due to fracking. Nineteen trillion gallons of water was depleted, an amount equal to enough water to supply all of California for eight years (Freyman, 2014, p. 59). Therefore, the issue of water depletion was the first concern, not water pollution from fracking. Water stress and wild fires were well reported problems in the media. People living in water stressed areas experienced the problems associated with drought first hand.
The issue of water pollution problems due to the compounds in hydraulic fracking waste water was successfully taken on by environmental organizations. Three high profile lawsuits were taken to court in 2011, 2012, and 2013. In other parts of the U.S. lawsuits based on the fear of groundwater destruction by depletion and pollution had already been taken to court. In 2010 the environmental impact on groundwater from gas and oil extraction became common information. The clue that the public was concerned was the degree to which environmental organization started to take on the groundwater issue. The public did not take on the issue as individually, but instead joined groups with similar values. During that period of time, the California government claimed that the issue of water safety was already covered by the federal regulations under the EPA’s, particularly the Safe Drinking Water Act. The government took the argument that water safety was already protected under federal and state law (Mishak, 2012).
Government oversight of corporate interests
An LA Tribune reporter was told by a state official that the amount of fracking or any health risks were not known by the government. Fran Pavley was the chairwoman of the Committee on Natural Resources and water; she learned that state regulars, indeed, had no idea how much fracking was taking place or the health risks. Pavley cosponsored SB 4, the first reading took place on December 3, 2012. The Assembly had passed the bill and forwarded it to the Senate. After two years, the highly controversial bill, SB 4, was passed with amendments on September 19, 2013. The senate committee and other senators at large were highly pressured by oil companies to continue the historical non-regulation of petroleum operators’ activities. On the other side, environmental groups were the main vocal proponents of regulations and permitting on well simulation practices. Governor Jerry Brown, signed SB 4 into law the next day. Interestingly, not only does SB 4 address fracking, it addresses the permitting and regulation of all three well-simulation methods used in California for gas extraction.
Cost of gasoline
The controversy on hydraulic fracturing was most visible to the public from the corporate perspective against the perspective of environmental health and safety organizations. The struggle between the promise of California energy independence, low gas prices for consumers, high profits for sellers, and higher employment rates were visible arguments used by the corporate lobbyists and their supporters. The degree of the idea of energy independence argument was not measured in the research, but the surcharges on electricity and gas were studied. The energy tax received by the state ranged from $47, 931,000 in fiscal year (FY) 2000 to 2001 and rose to $57,049,000 in FY 2008 to 2009. On the other hand, the gas consumption surcharge collected by California State was $30,511,000 in FY 2000 to 2001 and increased to $448,137,000 by 2008 to 2009. The amount of revenue from the gas consumption surcharge is correlated directly with gas use, so evidently gas consumption increased by more than 14 percent.
The cost for a gallon of gasoline was higher in California, than in New York by approximately 23 cents per gallon and Texas by about 66 cents per gallon. The gasoline in California cost more because the state tax on gasoline was higher than in Texas or New York. Meanwhile, California experienced periods of low employment growth rate compared to the rest of the U.S. Employment was higher than the rest of the U.S. in the first quarter of 2007 but, by the fourth quarter, unemployment increased with a net loss of 62,000 jobs which created an 11 percent unemployment rate reported in 2009 (sedgewicklaw, 2009). The unemployment rate was from five to six percent for the five years between 2003 and 2007. In 2008, the unemployment rate increased to nine percent until during 2009 and 2010 the unemployment rate has increased to 2013. In 2011, the unemployment rate had only dropped by one percent to 11 percent.
Corporate versus environmental perceptions
The bottom line is that the controversy on hydraulic fracturing was most visible to the public from the corporate perspective against the perspective of environmental health and safety organizations. The controversy between the two adversaries was very clearly delineated so the public could understand that corporations did not support the legislation, but the environmental groups did support the legislation. Issues that were integral to the controversy but not as clearly delineated in the public arena were the high unemployment rate and the price of gas. The petroleum sector argued that more employment would be possible without the legislation and that the price of gas would be lowered. The pro-SB 4 sector argued that the environment and health risks were too high and could point to the physical phenomena of water stress and wildfires.
Future Research
Future research needs to look at whether or not the factors of unemployment and gas prices were impacted because SB 4 was passes. Another research project needs to look at how many pro-SB 4 live in water stressed or wildfire impacted areas. Interesting research could result for a better understanding on how personal experiences influence the opinions of the public on the hydraulic fracking issue. Another area of research is whether or not California energy independence is possible. Political scientists can use the information to determine the publics’ knowledge about chemical compounds that are toxins and may be a dangerous health risk. Another question that is difficult to measure, but would be interesting to research is whether employment and gas prices take more priority in the publics’ perspective when compared to environmental health and safety. Boudet, Clarke, Bugden and Maibach (et al., 2014) noted that the public is not knowledgeable about the fracking procedure or the risks. Research on the accuracy of media information about fracking to the public and how the public perceives fracking can be carried out. The two variables may or may not correlate. Another variable to add is the personal experience and the influence of life experiences to an individual’s opinion about fracking.
Recommendations
The California state government web sites containing data about permits, regulations and measurements on water use related to hydraulic fracturing need to be monitored. If the government does not make the data collection strategy transparent and the easy to access, than the relevant government agencies need to be reminded of their responsibilities to the public.
Education on hydraulic fracturing needs to encompass not only how an individual is personally affected, but how the strategy affects the larger world, for instance in terms of global warming.
The subject of risk needs to be part of the conversation on hydraulic fracturing. The environmental and health risks are different and some have more or less importance. Raising the public’s ability to carry on a more nuanced conversation about fracking can impact policy. If the public conversation is shallow, policy makers may not feel obligated to develop policy that directly impacts causes. On the other hand, if the public discourse is mature, policy makers may be motivated to develop policy that really makes a difference.
References
Boudet, H., Clarke, C., Bugden, D., Maibach, E., Roser-Renouf, C. & Leiserowitz, A. (2013). “Fracking controversy and communication: Using national survey data to understand public perceptions of hydraulic fracturing. Energy Policy, article in press, http://environment.yale.edu/climate-communication/article/american-perception-of-hydraulic-fracturing
California Board of Equalization (2014) “Table 34, Resources Surcharges: Energy resources surcharge and gas consumption surcharge revenue, FY 1974-75 to 2012-13.” Board of Equalization (BOA). Retrieved from http://www.boe.ca.gov/annual/2012-13/tables_13/table34_13.pdf
Dettmer, Alison. (2012 April 14). “Briefing on Offshore Fracking and Other Well Stimulation Treatments “ Item W7A, New and Notable, California Coastal Commission, the Energy, Ocean Resources and Federal Consistency division, California Department of Conservation. Retrieved from New and Notable at http://coastal.ca.gov/
Freyman, Monika. (2014 February). “Hydraulic Fracturing and Water Stress: Water demand by the numbers.” Shareholder, Lender & Operator Guide to Water Sourcing. A Ceres Report, CERES. Retrieved from www.ceres.org/shalemaps
Mishak, Michael J. (2012 March 14). “Oil extraction method widely used in California with little oversight” Los Angeles Times. Retrieved from http://sd27.senate.ca.gov/news/2012-03-15-oil-extraction-method-widely-used-california-little-oversight
McMahon, Tim. (2014). “Historical Gas Price Charts.” Inflation Data, retrieved from http://inflationdata.com/articles/historical-gas-price-comparison-chart/
Sedgwick Law. (2009). “Unemployment rate” retrieved from sedgewicklaw.com
Senate Bill No. 4, Pavley, Chapter 313, “(2013) An act to amend Sections 3213, 3215, 3236.5 and 3401 of, and to add Article 3” Legislative Counsels Digest
Senate Third Reading (2013 Sept. 6) SB 4 (Pavley and Leno), Assembly Bill Analysis, California State Senate.
