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State cites technical reasons for denying 42 more fracking applications

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California Resources Corp. is based in Santa Clarita but has a sprawling office complex in southwest Bakersfield. The company said in May 2020 it had about 730 employees and 1,700 contractors in Kern County.

Less than a month after causing an uproar over discretionary denials of local oilfield permits, the state's top oil regulator has again rejected a series of fracking applications — this time on technical grounds.

State Oil and Gas Supervisor Uduak-Joe Ntuk said in a letter Tuesday to a subsidiary of local oil producer California Resources Corp. that the company's applications were denied because the company had failed to complete the paperwork necessary to perform the technique also known as hydraulic fracturing on 42 wells. All but two of the wells are in Kern County.

Santa Clarita-based CRC said by email Wednesday it had opted not to pursue the permits last year because of their relatively high cost at a time when oil prices were low.

"After commodity prices fell last year, CRC elected not to pursue these higher cost, lower return projects," it stated. "CRC did communicate to (Ntuk's agency, the California Geologic Energy Management division) that we would not be pursuing the applications."

Ntuk's rejection letter was enough to elicit a statement of support from Washington, D.C.-based environmental group Food & Water Watch, which also took the opportunity to call for an immediate end to not just fracking but all oil and gas drilling in California.

"It's encouraging to see CalGEM denying more fracking permits, particularly as California weathers a devastating drought and wildfire season induced by climate change," the group's California director, Alexandra Nagy, said in a news release. "This is progress. But make no mistake, it is not enough."

The situation leaves open the question of whether the Newsom administration's decision last month to withhold 21 fracking permits from Bakersfield-based oil producer Aera Energy LLC is part of a de-facto ban on the practice ahead of a formal process intended to end such permitting by 2024.

Aera has since appealed the denials, which cited Ntuk's discretionary authority as well as concern for climate change and nonspecific risks to health, safety, natural resources and the environment.

Fracking has for years been a sensitive political topic in California. Injecting water, sand and chemicals underground at high pressure to open access to petroleum reservoirs, it has been condemned by environmentalists as a threat to air and water quality while also being held up locally as an economic contributor that reduces the state's dependence on imported oil.

Six years after a landmark 2013 law imposed new monitoring and other requirements on the practice, CalGEM in December 2019 began requiring outside reviews of fracking applications by scientists with the Lawrence Livermore National Laboratory in the Bay Area. The stated intent was to judge whether the applications were adequate from a technical standpoint.

Then, under pressure last fall from environmental activists, Gov. Gavin Newsom called on the state Legislature to pass a bill that would ban new fracking permits by 2024. Lawmakers responded with a bill that would have banned fracking along with other commonly used oilfield practices. It died in committee under opposition from labor unions and other groups.

In April Newsom followed up with a move to bypass the Legislature and impose an administrative ban on fracking that would take effect Jan. 1, 2024. A rule that would accomplish that is making its way through state processes.

Ntuk and CalGEM have not given a firm indication whether the permit denials issued to Aera signal an attempt to end fracking in advance of the proposed rule, though local politicians have interpreted them as such.