Client: ProPublica and The Desert Sun
Date: September 18, 2020
Oil Companies Are Profiting From Illegal Spills. And California Lets Them.
This story was co-published with The Desert Sun, a member of the ProPublica Local Reporting Network.
In May 2019, workers in California’s Central Valley struggled to seal a broken oil well. It was one of thousands of aging wells that crowd the dusty foothills three hours from the coast, where Chevron and other companies inject steam at high pressure to loosen up heavy crude. Suddenly, oil shot out of the bare ground nearby.
Chevron corralled the oil in a dry streambed, and within days the flow petered out. But it resumed with a vengeance a month later. By July, a sticky, shimmering stream of crude and brine oozed through the steep ravine.
Workers and wildlife rescuers couldn’t immediately approach the site — it was 400 degrees underground, and if the earth exploded or gave way, they might be scalded or drown in boiling fluids. Dizzying, potentially toxic fumes filled the scorching summer air. Lights strobed through the night and propane cannons fired to ward off rare burrowing owls, tiny San Joaquin kit foxes, antelope squirrels and other wildlife.
Over four months, more than 1.2 million gallons of oil and wastewater ran down the gully.
California had declared these dangerous inland spills illegal that spring. They are known as “surface expressions,” and the Cymric field was a hot spot. Half a dozen spills and a massive well blowout had occurred there since 1999. This time, faced with news headlines and a visit by Gov. Gavin Newsom to the site, officials with the California Geologic Energy Management Division, or CalGEM — the main state agency overseeing the petroleum industry — ordered Chevron to stop the flow. Regulators later levied a $2.7 million fine on the company.
Instead, Chevron profited.
Amid the noise and heat, trucks arrived daily to vacuum out the oil from a safe distance. It was refined, sold and shipped to corner gas stations, bringing the company $399,000, according to state records. Chevron appealed the fine, saying while “we fully accept — and take responsibility for — our actions,” it does not believe the spill, known as Cymric 1Y, posed a threat to human health. The company has yet to pay, and CalGEM has not moved forward with an appeal hearing.
Along with being a global leader on addressing climate change, California is the seventh-largest producer of oil in the nation. And across some of its largest oil fields, companies have for decades turned spills into profits, garnering millions of dollars from surface expressions that can foul sensitive habitats and endanger workers, an investigation by The Desert Sun and ProPublica has found.
Since the new regulations outlawed surface expressions last year, more than two dozen have occurred in Kern County, the heart of the state’s oil industry. In the Cymric field, three spills are still running, state officials say, including one that’s spilled nearly twice as much as the one for which Chevron was fined.
Dozens of older spills have also flowed for years, the investigation found. The largest, just around the bend from Cymric 1Y, started in 2003. The site, also operated by Chevron and dubbed GS-5, has since produced more than 16.8 million gallons of oil and about 70 million gallons of wastewater, a company spokeswoman said. That tops the amount of oil spilled by the Exxon Valdez, the infamous tanker that ran aground in Alaska in 1989. In the last three years alone, the crude collected from GS-5 has generated an estimated $11.6 million, according to an analysis of production data provided by the state.
Chevron and state regulators say they’re trying to shut down GS-5 and they have reduced the flow by 90%. It was spilling approximately 15,000 to 23,000 gallons of fluid a day in early February, the latest date for which the state provided detailed data. Ten to 15% of that was oil, officials said.
“We take our responsibility to operate safely and in a manner that protects public health, the communities where we operate and the environment very seriously,” company spokeswoman Veronica Flores-Paniagua said. “We remain committed to stopping and preventing seeps consistent with the updated state regulations.”
But a close review of the state’s new rules shows they contain several large loopholes that keep oil from surface expressions flowing — the result of years of lobbying and pushback by the energy industry.
For example, over stiff opposition from environmentalists, state officials explicitly allowed high-pressure “steam fracking,” a controversial extraction technique that has been linked to surface expressions. And when spills break out, there is nothing stopping producers from turning them into moneymakers. In a practice known as “containment,” companies can corral the spills with dirt berms, netting, pipes or drains; vacuum out the crude; refine it and sell it. The 2019 regulations spell out steps companies must take to try to halt the spills — mainly temporarily ceasing steam injection — but there are no deadlines for stopping them and restoring the sites.
The new rules also largely exempt “low energy” surface expressions related to oil production. According to a review of state and local records, the exemption appears to cover more than 70 older spills that are still revenue generators.
A cache of internal documents, photos and video obtained by The Desert Sun and ProPublica shows that over the past quarter century, CalGEM has routinely allowed oil companies to contain and commercialize surface expressions, despite warnings by staffers about environmental and human harm. The agency acknowledges that more than 160 containment structures have been built to corral spills since the late 1990s.
The inland spills typically draw little attention, unlike major marine events that garner national headlines.
But hundreds of them have occurred, records show. Geysers of oil, rock and mud have shot skyward 100 feet, and slopes have collapsed under smoking waterfalls of crude and wastewater. In one case, a worker died; in another, an employee had to wrench his ankle away from a sudden sinkhole; and a third had to abandon his truck as a dark stain of oil mushroomed beneath it.
“Keep in mind that these eruptions are not at well sites,” wrote then-Oil and Gas Supervisor Elena Miller in a 2011 email to her boss. “These are locations where the earth opens up and spews fluids, solids and gases.”
Oil company representatives defend their practices, saying surface expressions mirror natural seeps of crude and come with harvesting a product that provides thousands of well-paying jobs and fuels car-centric California. Containing the spills, they added, also costs money. Chevron, for instance, told lawmakers this year that it had spent $9 million to try to halt spills in the Cymric field.
Environmentalists who fought for the regulations are furious about the loopholes and the continued spills.
“It’s completely obscene that oil companies can cause an oil spill and then profit off it,” said Hollin Kretzmann, an attorney with the Center for Biological Diversity, an environmental nonprofit organization.
CalGEM could not provide a full accounting of how much oil has spilled from surface expressions, even though the 2019 regulations explicitly require that oil companies report production numbers. The agency also declined to provide spill maps and plans mandated by the new rules, citing, in part, “multiple ongoing legal investigations,” including a departmental probe of the Cymric spills and ongoing litigation between Chevron and another company involving the field where the worker died.
“We are greatly reducing the problem. We continue to make progress, but more work is needed,” state Oil and Gas Supervisor Uduak-Joe Ntuk said in a statement. He noted that the practices had developed over decades, and that the new regulations were crafted under his predecessor and then-Gov. Jerry Brown.
“This Administration has made it clear that surface expressions are unacceptable and will not be tolerated as the cost of doing business,” he said.
After visiting Chevron’s Cymric 1Y spill site last year, Newsom pledged to “tighten things up.” In November, his administration placed a statewide moratorium on new permits for steam fracking, a suspected root cause of many surface expressions, and hired scientists with the Lawrence Livermore National Laboratory to study whether the method can be used safely.
Ntuk said that while that review is in progress, the agency is cracking down. He has the power to fine companies $25,000 a day for ongoing spills. But other than the one, unpaid fine against Chevron, he has not imposed any financial penalties for surface expressions, instead issuing “notices of violation” — citations that Ntuk has compared to “parking tickets.” He said that approach is working; many spills have stopped and some companies are working proactively to seal abandoned, often damaged wells to prevent future spills.
Companies with existing permits, however, are free to keep steam fracking — and to scoop up any oil that cracks the surface.
Some experts say the current reality is reminiscent of the 19th-century oil rush.
“It reminds me of the industry back when you’re watching ‘There Will Be Blood’ and they used to let this stuff explode out of the ground and collect it,” said Deborah Gordon, a Brown University senior fellow, who researched California’s Midway-Sunset field, where many surface spills occur. Her group concluded it emitted more greenhouse gases than any oil field in the nation. “This is not where this industry needs to be.”
After 150 Years, California’s Oil Gets Harder to Extract
Oil production in California began in the 1850s, just as its famous gold rush was petering out. Tantalized by visible natural “seeps,” companies large and small drilled wells across the state, hoping to hit paydirt. While profits could be big, so could the spills.
In 1910, a Kern County wellhead blew out. Oil skyrocketed from the ground. Over 18 months, the Lakeview Gusher spilled 395 million gallons, creating a pool so deep and wide that men rowed boats across it. It still holds the record for the largest oil spill in U.S. history, dwarfing BP’s Deepwater Horizon disaster, which leaked 210 million gallons into the Gulf of Mexico.
The California Division of Oil and Gas — the precursor to today’s CalGEM — was formed in 1915. Until this year, the agency’s primary mission was clear: Maximize the production of petroleum and other energy resources. That included helping companies relocate water that interfered with oil, both freshwater supplies and the briny waste that gushes from wells along with crude.
After decades of extraction, pumping California’s increasingly tarry reserves became tougher. Much of it was locked underground in diatomites — tightly packed layers of ancient, tiny sea skeletons whose algal innards compressed over milleniums into gooey crude. (Cat litter is made of diatomaceous earth scraped off Kern County hillsides.) By the 1960s, researchers discovered that flooding the subterranean reservoirs with steam or injecting it in cycles, through a process known as “huff and puff,” worked well.
The huff phase involves injecting scalding steam down wellbores, then letting the heat melt the tar. The puff portion refers to softened crude, thin as heated maple syrup, rising up through production wells. When the flow slows, another steam cycle begins. The technique is called “cyclic steaming.”
By the late 1990s, companies were using a supercharged version of it: steam fracking. Producers injected steam down well bores at pressures high enough to crack brittle underground formations so oil could ooze upward. Nearly half of the oil in the state is produced from cyclic steaming, according to a University of California, Berkeley, report issued in April.
But blasting old, often damaged wells with steam had an unintended side effect: surface expressions. Like underground tea kettles blowing their tops, seeps of gas, mud, oil and rock erupted in a dozen oil fields. Five companies reported scores of spills over more than 20 years. Chevron alone logged 64 surface expressions between 1997 and 2010, according to a report it sent to CalGEM.
Typically, CalGEM has told oil field operators to “shut in” wells near a surface expression, meaning temporarily cease nearby steam injection or drilling. Usually, the spill would stop or slow within days. If it didn’t, the agency has ordered them to stop steaming in an ever-larger radius. But some spots sprang leaks again and again or spilled large amounts for years. With CalGEM’s approval, companies turned these into de facto — but permanent — production sites, even in creeks and ravines supposedly protected by environmental laws.
CalGEM got revenue too — the agency is completely funded by the industry it regulates, and this year will receive 67 cents for every barrel of oil produced.
“The Earth Had Literally Cracked Open”
U.S. House Minority Leader Kevin McCarthy, a Republican whose district includes Kern County oil fields, once called Sandy Creek a “ditch” and claimed it hadn’t rained there in 30 years. The creek, which in the 1800s ran miles from the Temblor Mountains to the then-vast Buena Vista Lake, is now dry most of the year.
But when winter rains fall, the creek flows. State biologists documented sections that are home to breeding western toads, cliff swallows, California quail, kildeer and other birds passing through on long migrations.
In 1998, near Sandy Creek’s headwaters, Aera Energy and two other companies began injecting steam into wells in the soft dirt. A web of surface expressions quickly developed, with continuous oil pools forming in the streambed. They’re still flowing 22 years later.
Rather than shutting down production, Aera reshaped the landscape. It installed a 400-foot-long metal pipe, diverting rainwater from its natural path so the crude could continue to flow into the creekbed. Although the spills were still running, they were considered contained; the oil was confined to open-air pools. Nets were slung over them to prevent birds from flying in.
Aera and TRC, another oil company that leased adjoining property, periodically pumped out the oil and sold it. State oil regulators later said in an internal report that Aera was producing about 3,000 gallons of crude and waste a day from Sandy Creek.
Under state laws, it’s illegal to discharge any hazardous substance into a creek or streambed, dry or not. The California Department of Fish and Wildlife, which enforces those laws, said it can issue temporary permits for cleanup activities, but not for permanent alterations of a streambed. “The Department sees oil spills as emergencies, and its role is to respond to minimize harm to wildlife and clean up ASAP,” a spokesman told The Desert Sun and ProPublica. The department did not respond to questions about whether it has ever cited or fined companies that have spilled oil and altered the streambed in Sandy Creek.
TRC did not respond to requests for comment. Aera, which has since sold its Sandy Creek leases, declined to comment on past surface expressions there, but it said in a statement that the company “uses a combination of innovation, engineering, and technology to ensure that we are producing California’s energy under the most environmentally responsible and safe conditions in the world.”
The containment approach wasn’t foolproof.
In fall 2010, heavy rains sparked flash floods, dismembering the metal culvert. Days before Christmas, rains fell again. The creek reclaimed its natural channel, shoving crude and wastewater 10 miles downstream, through the town of Taft and out the other end.
Bruce Joab, a California Fish and Wildlife senior scientist who assesses the environmental damage wreaked by oil spills, still recalls Sandy Creek after the storms.
“I was actually shocked at how torn up that upper end of the watershed was,” Joab said. Rusted pipes, steam manifolds and other heavy debris littered the bed. “It was hard to distinguish where the creek began and the oil operation began.”
Field warden colleagues who’d seen many surface expressions warned him to watch his step.
“There were places where the earth had literally cracked open and oil was spilling out,” he recalled.
When spills occur, CalGEM employees work side by side with oil companies to investigate the causes. Chevron officials, for instance, were part of the team that responded to and probed the causes of last summer’s Cymric 1Y spill. Ntuk said that approach is required by state law.
In Sandy Creek, a CalGEM staffer documented the flood damage and spills with dozens of photographs and said in a lengthy report to supervisors that the surface expressions there were caused by steam operations. CalGEM, however, did not include Sandy Creek in a tally of surface expressions it provided to The Desert Sun and ProPublica, saying the situation is “still under evaluation and has not yet been categorized.” CalGEM provided no evidence it has ever cited or fined companies for damage after the 2010 floods or after more oily floods in 2016.
Sandy Creek is just one place where companies have constructed elaborate containment structures.
They can carry a heavy cost.
A Tragedy at Well 20
Well 20 in the Midway-Sunset field was drilled in 1927 and abandoned by Chevron in the 1980s. The company tried and failed to plug it three times. By 2011, surface expressions had broken out there regularly, and CalGEM had cited the company twice for oil field waste, though it wasn’t fined.
Chevron installed a large, underground containment system — a channel with perforated drains at either end — and added devices called tilt meters to record any sudden shifts in formations beneath the surface to give warning above. The tools typically monitor volcanoes and dams for seismic activity.
On the morning of June 21, 2011, Robert “Dave” Taylor and two Chevron colleagues went to the freshly graded site in response to a report of steam coming from the ground.
Taylor had worked in the Kern County oil fields for 33 years, starting as a low-paid “roustabout” and working his way up to construction representative. In Taft, where he grew up and raised his family, he was a soft-spoken but beloved coach of high school and community sports teams. Years later, people in town still called him “Coach.”
That June morning, the field at Well 20 looked smooth, per oil and gas agency rules. But underneath, pressure was building. Tilt meters had shown sharp shifts in ground movement, though no one seemed to notice.
As the three men walked across the site, a sinkhole of hot oil and hydrogen sulfide opened beneath Taylor’s feet and swallowed him. One of the other men reached into the hole and tried to grab his arm, with no luck. He then tried to use a pipe, but Taylor was gone.
Taylor’s family drove north from their home in Taft, thinking there might be a chance he’d survived. They were greeted by a geyser of steam as tall as a telephone pole shooting out of the hole. It took workers until shortly before dawn the next day to retrieve Taylor’s body. He was 54.
Chevron spokeswoman Flores-Paniagua called Taylor’s death “a tragic and isolated incident.”
The oil and gas agency ordered Chevron and TRC to stop nearby steam injection in an ever-widening radius. It did little good. The spill swelled. Top officials began probing more deeply and told staffers to compile a “spill binder” of fields around Bakersfield, the seat of Kern County. According to the binder, which was obtained by The Desert Sun and ProPublica, they logged 19 more surface expressions in five months.
Shortly after Taylor’s death, the ground shook a few miles north and a 60-foot geyser blew skyward. A Berry Petroleum Co. worker fled as a fast-moving surface expression mushroomed under his truck, internal CalGEM documents show.
”In this week’s event, a field worker narrowly escaped injury or death by running away from the site on foot,” wrote Miller, then the oil and gas supervisor, in an email to her boss, obtained through a public records request. “He abandoned his truck which was still parked at the site two days later as it was too dangerous to re-enter.”
By autumn, a slope above the site where Taylor died had collapsed into a bubbling cauldron of oil and toxic gases.
A surface expression just above the site where Taylor died in a sinkhole, filmed six months after his death. (Obtained by ProPublica and The Desert Sun via a Public Records Act request)
Inside Chevron, Taylor’s death was taken seriously, said Lucinda Jackson, who headed the company’s global safety, health and environment division until she retired in 2016.
She said company geologists had told her as long as they steamed in diatomite in California, Indonesia and elsewhere, surface expressions would occur. Several studies support this conclusion, which is an active area of research.
Taylor’s death was “horrible,” she said. Her division doubled down on monitoring and detection efforts. Daily small plane flights using remote sensors were instituted. When she retired, there was a continuous, remote monitoring station in Bakersfield, 40 minutes away, tracking the company’s Kern County fields. Dozens of screens recorded underground formations for any sudden shifts.
“Nobody likes these surface expressions,” she added. “They disrupt production and they’re bad for human health and the environment. But it’s just going to be an issue as long as we’re going to keep producing, if the world is still thirsty for oil.”
Taylor’s family was barred from suing Chevron because of his employment contract but reached a settlement with the company that had done the grading work over the spill containment site. California’s workplace safety agency, Cal-OSHA, cleared Chevron in its investigation of Taylor’s death, but it later fined the company $350, the maximum allowed by law, for not informing workers in writing of the “necessary safeguards” for working near Well 20.
Although CalGEM says Chevron has now successfully plugged and abandoned Well 20, the company told the agency it was still producing oil from a nearby surface expression. In the past month, it has pumped an average of nearly 1,400 gallons of oil and brine a day out of a cistern it installed there.
The Fight for Regulation
In Sacramento, Elena Miller, the oil and gas supervisor, and her deputies had started drafting surface expression regulations along with other reforms. But oil companies pushed back, complaining that she was causing unnecessary permitting delays. Then-Gov. Jerry Brown fired Miller in the fall of 2011 as he sought to revive California’s sluggish economy. New permits were quickly approved.
Meanwhile, the U.S. Environmental Protection Agency, worried about enforcement of groundwater laws in California oil fields, had been conducting a probe of how CalGEM regulated underground injection. Among its top concerns: oil producers and the agency were not properly testing or tracking injection pressures, which if too high could fracture underground formations. A top EPA official told CalGEM that federal and state laws barred pressure that could crack formations.
CalGEM officials said they’d revamp their regulations, but the effort took years.
Ntuk, the current oil and gas supervisor, said that prior to 2019, state regulations did not explicitly limit steam injection. Kretzmann, an environmental attorney who’s tracked the agency and injection laws for years, said Ntuk’s position was “absurd.”
As the spills continued, agency leaders in 2015 realized there was another long-standing issue: no formal training for the geologists, engineers and supervisors involved in permitting and oversight.
“The training that is provided is informal and ‘passed down’ from other regulatory staff, sometimes even new staff train newer staff, and provide ‘best practice’ training,” officials wrote in a request to lawmakers, asking for funding to implement a comprehensive training program. “This method of training is not standardized, it is not measurable, and it is extremely challenging to establish accountability for errors in the field.”
Since then, CalGEM has received funding for additional engineers and geologists and instituted a training program, although turnover at the agency is high.
As Taylor’s death showed, surface expressions can be dangerous. Experts say oil constantly spilling to the surface also releases fresh volatile organic compounds that are building blocks for smog and other dangerous pollution linked to heart disease, asthma and other health problems. Two new studies of pregnant women living close to California oil fields show far higher rates of premature births and low-birth-weight babies.
“Every time you push oil through an open pathway to the surface, it’s like opening a bottle of soda,” said Donald Blake, a University of California, Irvine, atmospheric chemist who has tracked air pollutants around the world, including in Kern County.
Studies of oil spill cleanup workers and nearby residents in six countries all showed they experienced higher rates of illness, ranging from sore throats to respiratory disease and cancer.
There are more immediate risks for workers too.
According to internal documents, CalGEM inspectors in 2014 mapped a 1¼-mile-long zone in the Midway-Sunset field, then co-owned by Chevron and Aera Energy. Vents in the rocks and ground were releasing more than 500 parts per million of hydrogen sulfide — levels that could cause humans to stagger and collapse within five minutes. Failed wellbores there were emitting up to 7,000 parts per million, more than three times the threshold for immediate death, according to guidelines of the federal Occupational Safety and Health Administration. An internal CalGEM memo stated the area was “permanently secured.” Neither the agency nor Aera responded to requests for comment about the zone’s current status.
Chevron’s spokeswoman said in an email that the company “took several steps to secure the property” and mitigate the risk of hydrogen sulfide. Chevron sold the property in March, she said.
CalGEM staff in the Bakersfield office conducted many in-depth inspections of spill sites and wrote reports documenting them for superiors. A 2015 PowerPoint presentation they prepared, obtained by The Desert Sun and ProPublica, stated that some of the diatomite formations might have been permanently altered by steam fracking, meaning spills there might never stop. But, the presentation concluded, there was little impetus for oil companies to change their ways: “The economic benefit of increased oil … production from steam injection into shallow diatomite … has been, and will continue to be motivation for operators.”
Employees familiar with the spills pushed for stricter regulation. Without it, they said, “surface expressions will remain a potential threat.”
“We Didn’t Know What to Do”
To the west, Santa Barbara County officials had already grappled with the consequences of surface expressions. Known for its scenic beaches, the area is also home to nearly a dozen oil fields.
In 2007, Breitburn Energy began injecting steam into the diatomite-rich Orcutt field, half an hour inland from Pismo Beach. Oil cracked the surface and the company contained it and harvested more than 4.8 million gallons of oil from “cyclic steam energized seeps,” according to CalGEM’s 2008 and 2009 annual reports. Using federal prices for California oil for those years, that would mean they earned an estimated $7.3 million. Breitburn later went bankrupt.
Pacific Coast Energy Corp. took over the Orcutt field in 2009 and sharply increased cyclic steaming. The number of new spills spiked.
“We had spill after spill after spill after spill,” said Errin Briggs, of the Planning and Development Department in Santa Barbara County, which, like Long Beach, Los Angeles and Kern County, works with the state to oversee oil operators. County officials were stumped, and they reached out to CalGEM. According to Briggs, engineers at the oil agency said that the steam being injected into the diatomite was causing it to swell like a balloon, placing pressure on the formation above, which sprang myriad leaks.
In 2011, CalGEM ordered Pacific Coast Energy to lower the amount of steam it was injecting, Briggs said. The number of new spills was halved over the next few years, he said. Neither a company executive nor CalGEM responded to requests for comment on those measures.
To contain the spills, Pacific Coast Energy installed wide, short cisterns, or “cans,” stuck into the earth like straws, from which frothy water and oil can be vacuumed. Unlike many Kern County containment devices, these are sealed with large, garbage can-style tops with handles that can be hoisted open by pump trucks.
County officials signed off on the construction after the fact. “Nobody in Santa Barbara had ever seen anything like this before,” Briggs said. “We didn’t know what to do.”
There are currently 58 ongoing contained spills in the Orcutt field, Briggs said. CalGEM did not respond to requests for information on the Orcutt spills for months, then said there are even more — 65 “low energy surface expressions.”
Environmentalists were stunned that companies were allowed to profit off the contained spills.
“Wow. Wow! Wow! And we didn’t even know it. That’s just crazy,” said Katie Davis, chair of the Sierra Club Los Padres Chapter covering Santa Barbara and Ventura counties. “If they’re tapping them for oil, and they’re not even legitimate wells, it’s really going around the law.”
A CalGEM spokesman said in an email that under the new regulations, “for low-energy expressions, containment … is permissible.”
Because the spills were considered emergencies, there was no requirement to do environmental reviews before installing the cisterns, Briggs said. That means large coast live oak, rare flowering bushes and other plants could be ripped out when necessary. Remains of Chumash tribal life could also be moved. The company did have to pay to plant restoration trees and vegetation elsewhere on the oil field.
State wildlife officials have long been concerned about the impact of surface expressions on an array of endangered animals and plants. California Fish and Wildlife records obtained through a public records request show dozens of dead and decaying birds and small mammals around spill sites.
In places like Sandy Creek, the nets oil companies place over spills to protect wildlife often get tangled or torn, said Julie Vance, Fish and Wildlife’s District 4 director in Fresno, who oversaw response to inland spills for years. Many burrow-dwelling creatures are “entombed” by fast-rising crude from underground, making it impossible to ever document their loss, she said.
For years, Fish and Wildlife deferred to CalGEM, but the wildlife agency has increasingly played a role in spill response since 2014, after policymakers expanded its mandate to include inland as well as marine spills, and as the oil agency came under growing scrutiny.
Loopholes: “Low Energy” Spills Permitted, Containment Allowed
In the fall of 2015, the California Department of Conservation announced a “renewal” plan to overhaul the state’s oil agency.
Among its priorities: writing new rules for cyclic steaming. In the four years since Taylor’s death, 63 surface expressions had broken out in the Kern County oil fields, according to state records. The department pledged to finalize the regulations in a little more than a year.
But the deadline came and went as special interests on various sides lobbied to influence the regulations. Environmentalists won language banning surface expressions. Several oil companies and trade groups pushed back, asking for a narrow definition of what constituted a spill.
In response, CalGEM exempted from the ban what it called “low energy seeps,” defined, in part, as slower spills that are not hot and are permanently contained. What qualifies as such a seep is left up to the oil and gas supervisor. The carveout appears to preserve a lucrative form of spill.
A recent thesis by a Stanford University master’s student identified 19 such “low energy” sites in the Midway-Sunset field, where spills were contained with cisterns. An analysis of production records by The Desert Sun and ProPublica found that over the past 20 years, 14 of those sites have spilled a combined 20 million gallons of oil, worth more than $19 million.
“I sure would call that a loophole in the law,” said Rosanna Esparza, a retired gerontologist who did health assessments of residents near Kern County oil operations and who is fighting to cease oil production statewide.
The Western States Petroleum Association, the industry trade group representing major companies like Chevron, pressed to nix the spill prohibition altogether and just preserve the longtime practice of containment.
“There is an inherent conflict created by prohibiting surface expressions yet allowing for management methods,” WSPA wrote in a letter to CalGEM. “The strict prohibition should be dropped in favor of language that provides for prudent management when events occur.”
In response, CalGEM staff defended the proposed ban on surface expressions “because they are inherently unsafe.” But they also provided an opening for containment. “Even when a violation has been committed,” the agency replied, “there are still protocols to safely handle that violation.”
The regulations took effect in April 2019.
Within months, more than a dozen surface expressions occurred, including Chevron’s latest Cymric spills. In short order, the Newsom administration announced the moratorium on new steam fracking permits and moved to bolster CalGEM. The governor’s January budget proposed 128 new positions for the agency, in part to better oversee surface expressions. Under state law, which requires potential polluters to fund oversight, the oil industry would have to pay $24 million over three years for the positions.
The Tug of War Continues
The permitting pause sent shocks through the oil industry, and Kern County responded with a full-throated roar.
Hundreds packed the county supervisors’ chambers in Bakersfield in January for a meeting that lasted nearly seven hours. Oil workers and executives testified about the jobs that supported their families, and they lambasted “environmental extremists” and state officials.
Union officials, real estate agents, Chamber of Commerce members, the county sheriff, the district attorney and even the county school superintendent spoke about how vital oil revenues are to the area.
County supervisors led the charge.
“Rather than the governor giving us credit for our monumental achievements … he insists on punishing us by attempting to deny our right to use the God-given natural resources in our county to support our families,” said Supervisor Zack Scrivner, whose sprawling district includes Taft and several oil fields.
Scrivner showed photos of oil spills in Brazilian rainforests and a river in Colombia. This is a river full of oil, and I would offer that this is worse than a surface expression that the governor came down here to visit recently,” he said. “Why would this administration … send our jobs and our treasure to these countries with terrible human rights records, and with little to no environmental controls?”
No photos of the Sandy Creek spills or the Cymric ravine flooded with oil were shown.
Anthony Williams, Newsom’s legislative affairs secretary at the time, sought to reassure the crowd, saying he had grown up in Bakersfield. “I talk to the governor every single day,” he said, “and so when my voice rings in his ear, your voice rings in his ear.”
Elsewhere, in the agricultural communities around Bakersfield, farmers and environmental justice groups worried.
Some, who have long lived near oil operations in the Central Valley, disagreed with the industry and its supporters. The spills not only threatened the surface, they argued, but the water table — and the people and crops that rely on it.
Tom Frantz, a fourth-generation farmer and activist from Shafter, began monitoring the Cymric surface expressions himself a year ago, sending a drone into the air for timely updates. He watched oil spill into the ravine there, month after month, before CalGEM issued the fine against Chevron. Since that one was stopped, he’s been tracking the company’s even bigger spills that are still running.
Last November, after Chevron mopped up the Cymric 1Y flow, another cluster of surface expressions sprouted nearby. Dubbed 36W, it has since gushed more than 2.1 million gallons of oil and wastewater, according to Chevron reports filed to the state, and is being piped into large concrete culverts.
Chevron’s spokeswoman said in an email that it’s part of an older spill, even though state photos and reports show them as separate events. Since late March, an analysis by The Desert Sun and ProPublica found, the 36W cluster has garnered the company an estimated $245,000.
“They’re a huge source of air pollution, a huge potential source of water pollution,” Frantz said of the spills. “When I see Chevron directly violating the law for months on end, it bothers me greatly that the state is unable to effectively regulate this industry.”
Chevron denies its surface expressions have had any effect on groundwater.
By March, the coronavirus pandemic hit. The global oil market collapsed and California producers idled rigs, costing thousands of oil workers their livelihoods. Citing economic hardship, the industry asked the Newsom administration to scale back CalGEM’s expansion.
In the end, Newsom and lawmakers approved 25 new positions, a fifth of the agency’s original request. “Rest assured that CalGEM continues to ensure full regulatory oversight,” Natural Resources Agency Secretary Wade Crowfoot told reporters this year.
State and regional water officials are also stepping in, increasingly trying to stanch surface expressions. Clayton Rodgers, assistant executive officer for Central California’s water board, said his agency had for years let CalGEM take the lead. “Based on the resources we had and the belief that (CalGEM) was doing the work to address the concerns, we did not get involved,” he said.
Last year, he and his deputy toured Chevron’s spill in the Cymric field. But he said he was unaware of the massive GS-5 spill located 1,000 feet away until a Desert Sun reporter asked him about it. One of his inspectors visited the site the next day and opened an investigation into potential violations of water laws.
The regional water board is also monitoring Sandy Creek, the site of the streambed disaster. Berry Petroleum gained ownership of Aera’s stretch in 2017, and water board inspectors have cited the company for violating water contamination laws. Berry first told the inspectors the spills were natural seeps, but it has since voluntarily removed major rusted pipes and other debris, and has plugged and abandoned 10 nearby wells.
Berry injects no steam there, but two companies nearby still do, and the spills continue to flow. Berry has a proposal: It wants to build a channel to carry seasonal rains over the oil pools — just like Aera did 20 years ago. The efforts “are driven by our commitment to operate responsibly and protect our natural resources,” said Todd Crabtree, Berry’s manager of investor relations and administration. “Berry strives to abide by all existing California regulations regarding oil and gas production,” including the new regulations.
Overall, the rate of new inland spills has slowed, possibly due to lower production, said Gordon, the Brown University expert. But if steam fracking picks up, so could the surface expressions, she said.
Cathy Reheis-Boyd, president of WSPA, said she and other oil executives speak regularly with Newsom and CalGEM. She said the industry supports Newsom’s “pragmatic” approach to surface expressions, which includes the ongoing study of steam fracking.
“Let’s be clear,” she said. “The best way to get oil to market is not through surface expressions.”
The governor’s office declined to comment. Asked if it was considering changes to the regulations, CalGEM said “it is premature to say what new rules, if any, will result from current surface expressions or the scientific review.”
The spills have been completely halted elsewhere. After reports about “flow to surface” spills from heavy tar sands in Alberta, Canada, regulators there determined that excessive steaming volumes in the Primrose field — combined with open conduits from below ground, such as wellbores, natural faults and induced fractures — were to blame.
In 2016, the Canadian officials banned steam fracking within 1,000 meters —- or about 3,300 feet — of where the spills had occurred. That’s five times the maximum radius California spells out in its regulations, though CalGEM can impose larger ones if a surface expression continues.
Alberta also instituted strict protocols for nearby steaming.
There hasn’t been a surface expression there since.
About the Data
Data for surface expression oil volume estimates was provided by Chevron, the California Geologic Energy Management Division, or CalGEM, and the California Governor’s Office of Emergency Services. Revenue calculations used monthly California oil barrel price averages from the U.S. Energy Information Administration. Since those averages are currently only recorded through June 2020, revenue calculations for 2020 averaged oil barrel prices for the first six months of the year. Given that oil prices steeply declined for a period in March and then slowly increased in the following months, the resulting revenue estimates are likely undercounts. Low-energy seep revenue estimates used monthly well production data from CalGEM’s Well Search database, weekly summary files and CalGEM annual reports.
Janet Wilson is the senior environment reporter at The Desert Sun. Previously, she was a staff writer at the Los Angeles Times, where she wrote about everything from desert wind power battles to the sale of national forest lands and poor neighborhoods grappling with deadly soot. Email Wilson at email@example.com and follow her on Twitter at @janetwilson66.