http://www.reuters.com/article/2013/04/09/us-usa-fracking-california-idUSBRE93803720130409
Judge rules administration overlooked fracking risks in California
mineral leases
By Rory Carroll
SAN FRANCISCO | Tue Apr 9, 2013 3:34am EDT
(Reuters) - A federal judge has ruled the Obama administration broke the
law when it issued oil leases in central California without fully
weighing the environmental impact of "fracking," a setback for companies
seeking to exploit the region's enormous energy resources.
The decision, made public on Monday, effectively bars for the time being
any drilling on two tracts of land comprising 2,500 acres leased for oil
and gas development in 2011 by the Interior Department's Bureau of Land
Management in Monterey County.
The tracts lie atop a massive bed of sedimentary rock known as the
Monterey Shale Formation, estimated by the Energy Department to contain
more than 15 billion barrels of oil, equal to 64 percent of the total
U.S. shale oil reserves.
Most of that oil is not economically retrievable except by hydraulic
fracturing, or fracking, a production-boosting technique in which large
amounts of water, sand and chemicals are injected into shale formations
to force hydrocarbon fuels to the surface.
Fracking itself is not a new technology but its widespread use in
combination with advances in horizontal drilling to extract oil and gas
from underground shale beds has fueled a new onshore U.S. energy boom.
It also has sparked concerns about impacts on the environment, including
questions raised about the potential effects of fracking on groundwater.
Environmental groups also criticize oil shale production as at odds with
efforts to curb heat-trapping greenhouse gas emissions from fossil fuel
combustion that scientists blame for global climate change.
California is implementing a host of policies to cut its greenhouse
emissions, including a carbon cap-and-trade program that it bills as a
potential model for other states.
The issue came into sharp focus in California last month when Governor
Jerry Brown, who has long touted his record as an environmentalist, said
the state should consider fracking technology to develop its shale
reserves as a way of reducing reliance on imported oil.
U.S. District Judge Paul Grewal in San Jose ruled that the federal
government erred, and violated U.S. environmental law, in declining to
conduct a full-fledged environmental impact study of its oil leasing for
the Monterey Formation.
JUDGE FINDS RISKS 'COMPLETELY IGNORED'
Grewal held that BLM's analysis was flawed because it "did not
adequately consider the development impact of hydraulic fracturing
techniques ... when used in combination with technologies such as
horizontal drilling."
"The potential risk for contamination from fracking, while unknown, is
not so remote or speculative to be completely ignored," Grewal wrote.
But the judge stopped short of ordering the leases canceled, as sought
by environmental groups. Instead, he ordered the parties to confer and
either submit a joint plan of action if they can agree or prepare to
argue their respective cases for a remedy if they cannot.
"In any event, it is clear from the order and the general requirements
of the law that BLM cannot allow drilling on the leases until and unless
it completes a more thorough environmental review," said Brendan
Cummings, a lawyer for the Center for Biological Diversity, which
brought the suit with the Sierra Club.
He hailed the decision as a milestone in efforts to seek greater
scrutiny and regulation of fracking.
"It's the first federal court opinion we're aware of that explicitly
holds that federal agencies have to analyze the environmental impacts of
fracking when carrying out an oil and gas leasing program," Cummings
told Reuters.
But oil company representatives played down the ruling's significance,
saying the judge took issue only with the BLM process, not fracking as a
method of recovering oil.
"There are many hurdles that producers have to go through, and
oftentimes they add delay and cost to energy production," said Tupper
Hull, a spokesman for the refinery group Western States Petroleum
Association.
"Hopefully the court will ultimately allow the lease to go forward and
production to take place," he said.
Cumming said the outcome would likely have implications for a more
recent and much larger lease sale of 18,000 acres for oil and gas
development in the same general region, which the BLM approved under the
same "flawed analysis."
He said the BLM should rescind those leases and "conduct the proper
environmental review" or face more court challenges.
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