Environmental group sues California over Price Canyon oil project

The Price Canyon oil field, where linear rod pumps in foreground are the modern replacement for the conventional pumping units visible in the background.
The Price Canyon oil field, where linear rod pumps in foreground are the modern replacement for the conventional pumping units visible in the background. dmiddlecamp@thetribunenews.com

The environmental group Center for Biological Diversity has sued California regulators for supporting plans to more than triple the area into which highly contaminated oil wastewater can be injected in an aquifer beneath the Price Canyon oil field.

State energy regulators have applied to the federal Environmental Protection Agency to expand the injection area — called an aquifer exemption — from 249 acres to 807 acres.

The state Division of Oil, Gas and Geothermal Resources and the State Water Resources Control Board, which approved the plan, are named as defendants. Oil field owner Freeport-McMoRan Oil & Gas of Houston is listed on the suit as real party in interest.

The environmental group, as well as oil field neighbors, says the expansion will endanger 100 nearby drinking water wells. The suit asks the court to set aside the state’s approval of the expansion and halt current injection into the aquifer until regulators have done a proper analysis of the plan’s risks as required by the California Environmental Quality Act.

“Oil regulators are disturbingly determined to turn this aquifer into an oil industry waste dump, but they can’t just shrug off California’s environmental laws,” said Maya Golden-Krasner, the environmental group’s attorney.

Ninety-five percent of well production at the Price Canyon field is water, and the remaining 5 percent is the desired oil. Most of that wastewater is turned into steam to facilitate pumping or is purified and released into Pismo Creek. But the remaining 15 percent, which is highly contaminated with oil and brine, is injected into the aquifer.

State regulators determined that the expansion of the aquifer injection area does not endanger nearby drinking water wells because the wastewater is injected under the oil field into an enclosed multilayer geologic bowl that prevents any water from leaving or entering.

Don Drysdale, spokesman for the state Department of Conservation — which includes the oil and gas division — said the department does not comment on pending litigation. However, he said the application to the EPA is part of an ongoing effort to overhaul the state’s oil and gas regulatory program. A 2011 audit showed that some of the wells in the oil field had been improperly placed; expanding the injection area will bring those wells into compliance with the federal Safe Drinking Water Act.

“That joint plan includes an expedited timeline, and we are on track,” Drysdale said.

Eric Kinneberg, a spokesman for Freeport-McMoRan, was blunt in his criticism of the lawsuit, saying it lacks any legal or factual foundation. The oil company has been injecting wastewater into the aquifer for 50 years with no pollution of nearby domestic wells, Kinneberg said.

“The Center for Biological Diversity has a well-established pattern and practice of filing meritless lawsuits simply to harass project proponents and to advance their openly stated goal of ending all oil production in the state of California,” Kinneberg said. “Today’s petition appears to be nothing more than a continuation of this strategy.”

The 110-year-old oil field is located halfway between San Luis Obispo and Pismo Beach on Price Canyon Road at Ormonde Road. It is also called the Arroyo Grande oil field.

Current production of the field is about 1,600 barrels a day. The oil company has plans to add 450 new wells to triple the number of active oil wells at the site.

Freeport-McMoRan has applied to San Luis Obispo County for the permits needed for this expansion. However, the application has been put on hold until the EPA makes a decision on the aquifer expansion. That agency has until February to make that ruling.