California regulators are right to concede that the state's current regulations for oil production are due for an update. And it's encouraging that industry groups seem to also embrace this idea.
For at least the past year, the oil industry and state and federal regulators have been engaged in tense and, at times, combative discussions over certain oil industry practices, prompted by concerns raised by the U.S. Environmental Protection Agency. At the EPA's urging, California oil regulators last year suddenly began imposing strict new standards on drilling permits for oil companies, including several in Kern County. As a result, permits were being held up for months and the delays created reasonable concerns about the impact on oil operations and hiring in an economy struggling to get its footing. Ultimately, Gov. Jerry Brown fired the state's top two oil regulators.
The two men installed to replace those officials, Tim Kustic, head of the Division of Oil, Gas and Geothermal Resources, and his boss, Mark Nechodom, who leads the state Department of Conservation, have now largely agreed with federal officials that some rules governing oil-field practices need to be revisited, including a steam injection technique blamed for the death of a worker last year who was swallowed by a sinkhole at a Chevron oil field in Kern County. And the oil industry isn't in an uproar, as of yet, over their conclusions. The difference is, unlike their predecessors, Kustic and Nechodom have given the industry plenty of warning. They've communicated the situation and held discussions with industry leaders. By contrast, their predecessors blindly imposed drastic new rules on oil companies with little explanation and dodged questions about the new restrictions from industry leaders.
California has a long history of oil and gas production and leadership in pioneering new extraction technologies. But the fact is, state regulations have not kept up with recent advances. The best approach to updates of these rules is that industry and regulators continue to work together. It appears they are now on track to do just that.