With the exception of Gov. Jerry Brown, there may be no bigger fan of California’s new law regulating fracking than the outspoken CEO of a Texas oil company who calls the bill Brown recently signed “the toughest in the states.”
Chris Faulkner, CEO of Breitling Oil and Gas, is a cheerleader for the oil industry who told Opportunist magazine earlier this year that fracking is “100 percent safe” and preaches the industry gospel in paid radio spots that air each day in Dallas and Los Angeles.
He is just the sort of fellow one might expect to ascribe to the industry line voiced by the Western States Petroleum Association, whose president said the bill Brown signed “could create conditions that will make it difficult to continue to provide a reliable supply of domestic petroleum energy for California.”
In fact, Faulkner told me, he believes pretty much the opposite. The regulations are tough, he said, but not unreasonable — and without them, the industry would risk becoming hogtied by public apprehension about fracking.
“As an industry, we have to recognize that, whether based on facts, fear or misunderstanding, there is a huge backlash against our industry,” he said. “We cannot continue to ignore that. The common person is going to say, ‘I have concerns.’ If we can lessen that, fantastic.”
Without regulation strong enough to give most Californians assurance that fracking is being adequately monitored, Faulkner believes the industry would be setting itself up for a repeat of what happened in Europe, where bans were enacted and “the industry was left holding the bag” on stranded investments.
In fact, even with the new law in place, the industry may not be out of the woods in California.
The Sierra Club opposed the bill in the Legislature. Earlier this month, the Natural Resources Defense Council asked Brown to use his executive authority to impose a moratorium.
Other environmental groups are even more adamant in their quest for a ban.
California may be only one wealthy activist away from launching an initiative asking voters to enact a ban.
What that means is that Brown has given the industry and state regulators a relatively small window to demonstrate that fracking and other well-stimulation techniques can be conducted under a regulatory scheme that gives the public sufficient comfort.
Faulkner believes the new law will do that, beginning with its requirement that operators disclose the chemicals they use in fracking fluids.
“We cannot just keep saying they’re trade secrets,” he said.
He believes the people who must be won over are those in the middle of the political spectrum — folks who see the potential economic benefits of drilling techniques that could be used to unlock massive reserves in the Monterey Shale formation, but are not quite certain whether potential environmental risks outweigh the potential benefits.
“Environmentalists want an outright ban on fracking, period,” he says. “California is going to have the strongest fracking regulations in the United States, and they’re still not happy.”
With the regulations in place, Faulkner believes industry executives can now make informed business decisions.
“If you’re going to have an industry invest hundreds of billions of dollars, we have to know what we’re on the hook for,” he said.
He notes that there is an irony to the West Coast apprehension about fracking, since “the Monterey Shale may be the only formation on the planet that doesn’t require fracking. Because of all the faulting and folding of Monterey Shale, it may be possible to drill 6,000 feet vertically and produce oil with acidation.”
State Sen. Fran Pavley, D-Agoura Hills, the bill’s author, figured that out midway through this year’s legislative process. As a result, she included acid treatments that use hydrofluoric acid among the activities that will be regulated under the law.
With Brown’s signature, the stage is set. The next step will be for regulators in the Division of Oil, Gas and Geothermal Resources — an agency that critics have long asserted is too friendly with the industry — to carry out the regulations in a way that is consistent with the law’s intent.
If they do, the industry will have an opportunity in California to demonstrate what people such as Faulkner have long asserted — that, as he says, “the science is on our side.”
During the debate on the bill, Assembly Marc Levine, D-San Rafael, noted such assurances from the industry.
“Let’s make Big Oil prove it,” he said.
For the oil industry in California, the time to do that is at hand.