November 5th, 2013


Senator, California State Senate

California Advocacy Director, National Resources Defense Council

Energy Lobbyist, KP Public Affairs

Frack is a funny word with a gamut of connotations.
For the oil industry, hydraulic fracturing, or fracking, presents the opportunity for an unprecedented energy boom in the United States, and all the glory and riches that come with it. For environmentalists, the concept of injecting toxic chemicals into rock formations to extract natural gas probably looks like shooting Mother Nature with a machine gun. Not to mention its potential repercussions, from methane leakage to water contamination.
The stakes are high for the unconventional Monterey Shale formation, the largest shale oil reserve in the country. Covering much of Central California and the coast, it is estimated to hold more than 15 billion barrels of oil. Will California get caught in the paradox of extracting fossil fuels while trying to stay on track for a clean-energy future?
In this heated exchange, a California State Senator, a National Resources Defense Council advocate, and an energy lobbyist hashed out the issues California faces as it sits on the verge of a huge fracking boom.
"We have been fracking in California for 60 years and we have done it safely," according to Paul Deiro, an energy lobbyist with KP Public Affairs.
He spoke about his support for SB4, the first bill to establish regulations on fracking in California, which was authored by California State Senator Fran Pavley.
“From our standpoint, we were losing the battle with public opinion,” Deiro said. "We believe in transparency, disclosure, notification."
And Pavley echoed his support, despite oppponents that say it its amendments nullified what it was supposed to achieve.
"What I'm trying to do is put a public face on this as far as making sure the public has all the factual information," Pavley said, adding that the bill signed in September was “a starting point.”
Since fracking is already going on in the state, Californians now have to make a choice about how much it’s regulated, she said.
“It could potentially be a game changer as it relates to economic opportunities in the Central Valley,” Deiro said.
The NRDC, like other environmental organizations, pulled its support of the bill in favor of a moratorium.
“I had voted for a moratorium about a year ago in a prior bill,” Pavley said, noting that it wouldn’t pass through the assembly. “You have to deal with reality – if there is not the ability to have the moratorium, then you need to move forward as a first step.”
Pavley said the federal government should be a partner in the fracking discussion because it controls a large portion of the shale formation land in California.
The speakers discussed how fracking uses a lot of water, which is a precious resource. Deiro argued that the amount of water used by oil companies pales in comparison to agriculture. But aside from the fact that our demand for energy should not be compared to our demand for food, the water used in fracking requires additional energy.
“In fracking, you’ve got to heat the water up to very high temperatures and the oil industry is using fossil fuels to do that, which further increases the carbon footprint of producing oil through fracking,” according to Annie Notthoff of the NRDC. "Investing in getting more fossil fuels out of the ground is just bass-ackward right now.”
Part of the challenge with water has to do with areas that have limited groundwater, and SB4 looks into the potential for using more recycled water, Pavley said.
“This bill did nothing to promote fracking, accelerate fracking, it was already occurring,” Pavley said. “Now we’ll know more about it.”
The bill has nothing to do with California’s goal to reduce greenhouse gas emissions by 2020, and “we’re going full-speed ahead in that direction,” she said.
When Diero was asked if burning fossil fuels are destabilizing the planet, he responded, “I am no scientist…so I’ll have the scientists answer that question.”
When asked if global warming is real, he responded, “it’s not for me to answer that question.”
“California has a consumer demand of 43 million gallons of gasoline a day – that’s not going to go away anytime soon,” Diero said.
He argued that from an emissions standpoint, fracking close to home should be preferable since we are burning fossil fuels to transport crude oil to the U.S.
Pavley discussed the challenge of abiding by the state’s climate law, AB32, and the low carbon fuel standard.
“Frankly, we’re going to need refineries and some of your members to join us in making this happen,” Pavley said to Diero. “If not, we’re going to have some real problems in California doing its fair share to reduce our carbon footprint.”
Regarding regulation based on carbon emissions, Diero said the 10 percent emissions reduction standard would put refineries in a "difficult position." But Pavley was more hopful about the potential for innovation.
“I think the oil companies have some of the best engineers on the planet,” Pavley said. “I think they can do this.”
- Danielle Torrent
November 5, 2013
Photos by Ed Ritger
The Commonwealth Club of California