In Oil & Companies News 07/11/2016
The movement to ban fracking is winning victories across the U.S. Yet the campaign has largely failed to win where it matters most—in places oil and natural gas are produced.
A Nov. 8 ballot measure will test that pattern in Monterey County, famed for its farms and scenic coastline.
Two counties bordering Monterey, San Benito and Santa Cruz, have banned fracking, although neither has a sizable oil industry. Monterey’s San Ardo oil field has been churning out crude for nearly 70 years, and the county has no ban.
Measure Z, an initiative on Monterey County’s ballot, seeks to ban fracking and new wells, and to restrict how oil companies use water byproducts.
The measure is being closely watched by national groups on both sides. Its supporters have received donations and other help from national environmental groups. Monterey County for Energy Independence, which opposes it, has outspent backers roughly 30 to 1, according to election filings through Oct. 22, spending nearly $5.5 million; it is funded almost entirely by Chevron Corp. and Aera Energy LLC, a joint venture between Exxon Mobil Corp. and Royal Dutch Shell PLC..
The fight has reached an intense pitch in Monterey County, home to activists in both the environmental movement and oil industry. It divides along what locals call the “lettuce curtain.”
On one side are inland farm regions, with fields ranging from lettuce to wine grapes, where voters tend to be politically more conservative and to oppose Measure Z. On the other are residents living nearer the coast, often liberal-leaning politically, who tend to favor the ban.
Public opinion is increasingly turning against hydraulic fracturing, in which water and sand laced with chemicals are injected underground to unlock oil and natural gas, along with other extraction techniques. A March Gallup poll found 51% of Americans opposed fracking, up 11 points from a survey a year earlier.
Of hundreds of anti-fracking and similar measures across the country, almost all are where there is little or no oil or gas production. New York banned fracking in 2014 but doesn’t have a sizable oil industry, though that move did head off any potential growth of the sector there. Vermont banned fracking in 2012 but has no commercial natural gas or oil resources.
Where fossil fuels are produced in any significant quantity by any method, such measures have generally failed. In Colorado, activists couldn’t gather enough signatures to get two anti-fracking measures on the ballot this year. Voters in Denton, Texas, passed a binding measure against fracking, but the state quickly passed a law banning local bans.
Among the legally binding bans passed in Pennsylvania over the past few years, none are in areas where companies are producing in the Marcellus Shale natural-gas formation in any large quantity, according to a Wall Street Journal analysis of government data of active wells and a tally of bans compiled by anti-fracking group Food and Water Watch.
Monterey County has a storied place on the American landscape, with Big Sur’s cliff-side Highway 1, acres of green fields that inspired John Steinbeck and the 1967 Monterey Pop festival featuring the likes of Jimi Hendrix.
It is also California’s 4th-largest oil-producing county, although there are currently no fracking operations in the county. Chevron and Aera dominate production that totaled nearly 22,000 barrels a day in March.
Measure Z would shut down Monterey’s oil production, industry officials said, by barring not just fracking but also new oil or gas wells and by requiring companies to stop using wells and ponds to dispose of water produced from underground as a drilling byproduct.
“Measure Z bans oil production in the county because it does not leave any way to manage the produced water,” said Dallas Tubbs, a Chevron engineer, speaking at the San Ardo field.
Aera referred inquiries to the opposition group it co-funds, whose spokeswoman, Karen Hanretty, said the measure if passed would likely be overturned in court.
The Monterey debate centers on how oil companies handle water they pull up. Chevron recycles one-third of its water. That process, called reverse osmosis, yields a liquid called brine consisting of a high concentration of naturally occurring minerals that must be disposed.
Measure Z’s backers say drillers should be required to treat and recycle all of it rather than inject it back underground. They worry that water reinjected into the ground could contaminate the area’s drinking water.
“I’m not against fracking per se, I’m against contaminating the water,” said Ted Walter, 57, co-owner of Passionfish, a restaurant in Pacific Grove along the coast, who has appeared in ads backing Measure Z and calls the San Ardo oil fields “ugly.”
Chevron’s officials say they aren’t sure it is technically possible to recycle all the water byproduct, but that in any case it is financially prohibitive. “We’ve been operating in this field for 70 years,” Chevron’s Mr. Tubbs said. “We monitor the groundwater monthly. The groundwater is as clean today as it was 70 years ago.”
Regulators haven’t found contamination related to reinjection in Monterey—something both Ms. Hanretty of the industry-funded opposition group and Measure Z backers agree on.
Steve McIntyre, who manages roughly 12,000 vineyard acres in the county, opposes Measure Z. A board member of the Big Sur Land Trust, he said he is a registered independent, supports renewable energy and is proud his vineyard has been certified “sustainable.”
He said he also supports the way the oil industry operates, emphasizes America’s dependence on oil and believes the anti-fracking measure is a cover for a broad assault on fossil fuels.
“Let’s not be misleading here,” said Mr. McIntyre, 59 years old. “I believe they are using fracking as a hot button to get under people’s skin and get them excited.”
The opponents group has aired ads showing a handsome veteran and a chiseled rancher extolling local energy. Monterey’s county auditor in a report projected potential lost jobs of 730 if the measure passes. Joe Gunter, mayor of Salinas, Steinbeck’s hometown in the county, is among local officials opposing the measure.
Supporters of Measure Z include Sen. Bernie Sanders, who spoke at a rally supporting it, as did Dolores Huerta, a famed farm-labor activist. Anti-fracking activists marched with a large puppet of a condor in the Labor Day parade.
Measure Z proponent Andy Hsia-Coron, a 59-year-old retired teacher living near Monterey Bay, at a recent taco fundraiser laid out the arguments for the measure: climate change and clean water.
“Oil is hindering the effort in terms of both moving toward renewable energy and safe environmental practices,” he said. Of the water reinjection, he said, “eventually what they put down there will find its way to other parts of the county.”
Both sides have done internal polling, which they decline to share. Many on both sides expect the vote to be close.
“If they win in Monterey, it sets a precedent,” said Amy Myers Jaffe, executive director for energy and sustainability at the University of California, Davis. “It would show there’s real political force behind this movement.”
Source: Wall Street Journal
