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Farmers Allege Water Contamination Conspiracy Against Oil Regulators

A years-old controversy about government permitting of oil field wastewater injection activity escalated Wednesday as local farming interests filed a federal lawsuit accusing state and county officials of conspiring to promote petroleum production at the expense of groundwater protection.

Using a federal law originally developed to fight organized crime, unidentified farmers and others alleged Gov. Jerry Brown, top state regulators and Kern County Planning Director Lorelei Oviatt worked with prominent trade groups to illegally boost oil production by allowing petroleum producers to inject salt water into federally protected aquifers.

A lawyer who worked on the suit said the legal action originated, in part, with a Rosedale family farm’s frustrated attempt last year to win damages in Kern County Superior Court from four locally operating oil companies it said contaminated its irrigation water, forcing the farm to uproot a large number, possibly hundreds, of allegedly damaged cherry trees.

Wednesday’s suit reaches beyond the scope of that case to touch on the politically sensitive issue of how the state handles, and admittedly has mishandled, oil companies’ applications to dispose of the salty “produced water” that comes up from the ground along with crude oil.

The lawsuit claims the state Department of Conservation’s Division of Oil, Gas and Geothermal Resources, under Brown’s leadership, wrongly allowed oil companies to inject produced water underground without first requiring technical studies to ensure the fluid does not contaminate irrigation aquifers.

With the public and news media distracted by the unrelated controversy of hydraulic fracturing, or “fracking,” it alleges, government officials formed an “enterprise” that brushed aside farmers’ complaints, public records requests and environmental problems to approve waste injection work in violation of the federal Safe Drinking Water Act.

“The fundamental goal of the enterprise and conspiracy was to preserve and expand the ability to inject underground chemicals and toxic waste, thereby expanding their oil production and maximizing profits, including tax revenues and funding from federal sources, regardless of the impact on fresh water,” according to a news release by the Lancaster law firm of R. Rex Parris, which filed the suit and was one of several involved in last year’s legal action by the Rosedale farm, Palla Farms LLC.

Representatives for defendants Brown and Department of Conservation Director Mark Nechodom declined to comment. So did the Western States Petroleum Association, another defendant in the case. Others named as defendants, Oviatt and former DOGGR Chief Tim Kustic, could not be reached for comment.

A lawyer for defendant California Independent Petroleum Association called the accusations “outrageous.”

“For the past several years CIPA member companies have worked diligently to remain in compliance with evolving regulatory requirements,” he wrote in an email. “To suggest that normal dialogue between a regulated entity and the regulatory agency somehow constitutes some type of conspiracy is patently absurd and a waste of the court’s valuable time.”

Some of the suit’s central allegations deal with alleged impropriety at DOGGR in 2012, months after Brown ousted the state’s top two oil regulators under pressure from the oil industry and several Kern County state and federal lawmakers. Oil producers had complained that Kustic’s predecessor, Elena Miller, was unjustifiably holding up injection work reviews.

The suit says Kustic, a former Bakersfield oil regulator, promised a new, “flexible” approach to injection permitting. Under his leadership, it says, injection permit approvals soared from 50 permits a year to 1,575 in 2012, at least partly because oil companies were no longer providing geological and engineering studies Miller had required.

Last year DOGGR admitted it had inappropriately approved injections, not only of wastewater but also of steam as part of an enhanced oil recovery technique, at about 2,500 wells, mostly in Kern, over a period of decades. It has since shut in 23 wells, all of them local, and is reviewing whether to close others under a two-year review and well-testing program approved by the U.S. Environmental Protection Agency.

The oil industry has characterized the problem as the result of a paperwork mix-up dating to government miscommunications that took place as early as 1983.

Environmental activist groups want the state to immediately close wells found to be injecting into aquifers never exempted from the federal drinking water act. Meanwhile, state lawmakers are mulling legislation that would force the state to take a stricter approach to injection permitting.

DOGGR has maintained that, despite its permitting errors, no aquifers have been contaminated by oil field injection work.

But Patricia Oliver, a lawyer with the Lancaster firm that filed this week’s suit, said the anonymous plaintiffs, organized under the name The Committee to Protect Agricultural Water, has evidence local aquifers were, in fact, contaminated by oil field injection work.

She said groundwater tests have shown salt levels at local aquifers rose starting in about 2012 to levels that “have exceeded the maximum contaminant levels authorized by the EPA.” She was unable to provide test results Wednesday.

The evidence against Oviatt, the only local official named in the suit, is contained in a 2012 email in which Nechodom thanked her for her cooperation, and she told him, “We share the same goal.”

Oliver also explained the federal suit became necessary, in part, because last year’s lawsuit by Palla Farms had to be amended from its original complaint. The judge had told the plaintiffs to seek redress at DOGGR, which Oliver said had already proved fruitless. The case is pending.



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