The 'F' Word: Unregulated Fracking at Oil Wells Raising Concerns

California is the fourth largest producer of oil and gas in the nation, and companies are turning to controversial techniques like fracking. The industry would like to keep facts about the process buried, but it's got residents scared. In a "SoCal Connected" special report, correspondent Jennifer London unearths whether fracking is going on in Southern California and why it's become such a dirty word.

TRANSCRIPT:

Jennifer London: Travel 11 miles east of the Pacific Ocean and this big, brown swath of land makes for an unusual sight "? a 1,000-acre oil field, home to hundreds of wells...in the heart of L.A.

It is the nation's largest contiguous oil field, and it's surrounded by middle-class neighborhoods.

In 2004, the owner of the Inglewood Oil Field, Plains Exploration & Production, or PXP, began ramping up operations "? and that's when residents here say their trouble began.

Earl Ofari Hutchinson/Windsor Hills Resident: It has caused great concern in the neighborhood.

London: The homes in the Baldwin Hills area are tidy and well cared for, and are in sharp contrast to the industrial blight of the oil fields, but it's what's happening miles below the surface that has residents concerned. They claim the ground under their homes is shifting, and they blame PXP.

Hutchinson: You have to repair the house if you're going to live in it.

London: Earl Ofari Hutchinson bought his home in Windsor Hills 20 years ago.

Hutchinson: The house has been - it's over 20 years old. When we moved in here, I mean, this was a pristine house, but all of the sudden now you have a house that's falling apart. So the house was actually not just cracking; the house was splitting.

London: The house was splitting?

Hutchinson: The house was splitting. Literally, the house was splitting.

John Smith/Windsor Hills Resident: My cracks here are getting worse. That is starting to open up almost daily. Every time I come home I'm seeing something different.

Gary Gless/Windsor Hills Resident: We've got areas where now the foundation is actually even cracked into the house, so the whole structural integrity of it is, you know, split.

London: Residents say since PXP took over the oil field, the company has drilled new, larger wells and also increased drilling operations.

Gless: It more or less started up more I'd say in the last six years. When they increased production over there, the home started moving more, and it's not just here but throughout the neighborhood. So there seems to be a definite correlation of increased production, increased damage.

London [to Hutchinson]: Did you go to the oil companies, PXP, and say, "This is what's happening to my house. Will you pay for this?"

Hutchinson: Yes, we had meetings with them. The oil company, in this case PXP, they are not accepting liability. They are not acknowledging any responsibility for it, so basically the ball is in your court.

London: And while they say the pumped-up oil production has been trouble enough, now a new worry is surfacing, a controversial drilling method called hydraulic fracturing - or fracking.

Fracking is a technique that is used to extract oil or gas trapped in rock formations buried deep below the surface.

Highly pressurized water, sand and a cocktail of unknown chemicals are injected approximately two miles deep to shatter the rock and allow the oil and gas to escape.

And according to two well records that "SoCal Connected" reviewed, PXP conducted frack tests at the Inglewood field as recently as January of this year and dating as far back as 2004.

Oil and gas companies claim it is safe and it is effective. But the critics say no one can say for sure, because in California fracking occurs with no oversight. And recently a handful of states have become concerned enough about fracking to put a moratorium on it.

When we tried to talk to PXP about their fracking operations at the Inglewood field and homeowner concerns, they declined to be interviewed. Instead they referred us to one of their industry trade groups. Rock Zierman is the CEO of the California Independent Petroleum Association.

London [to Zierman]: So it sounds like you don't believe that fracking could really cause that kind of home damage.

Rock Zierman: Well, I don't think it has occurred in California. I think if you have a foundation that is cracked at the surface, it seems odd to link it to something that is happening two miles below.

London: But it's exactly what's happening miles below that has homeowners concerned, and they want more answers.

Gless: Transparency, I think, is the key factor. You know, if they give everything that they're doing - basically supply the community, saying "This is what we're going to do," rather than us trying to have to find out what they're doing.

London: So we met with the state agency that regulates the industry to get some answers in this exclusive television interview. Tim Kustic is the new supervisor of the Division of Oil, Gas and Geothermal Resources - better known as DOGGR.

London [to Kustic]: Do we know how many wells have been fracked? Or how many wells are currently being fracked?

Kustic: No, we do not have hard data on the number of wells being fracked in the state.

London: Why not?

Kustic: Part of that is because the fracking of a well is similar to a number of things that can go on with a well. Since there is no requirement to have a specific permit to frack a well, the division therefore doesn't track individual frack jobs. So we can't tell you for sure how many wells in the state have been fracked, because at this time there is not a permitting requirement.

London [to Kustic]: The division is the regulatory agency. Can't you change the regulations and say we are now going to require a permit for a frack job?

Kustic: We certainly can, and we are studying that issue.

Dr. Tom Williams: They don't want to take on the issue because if they - if the state requires it, that means they have to require it of all wells.

London: Dr. Tom Williams is a retired geologist and oil expert. He's an industry insider who spent more than 50 years in the field.

Williams: The oil production and exploration industry basically doesn't want to have much in the way of visibility, or regulation and/or enforcement. They want to - might say - be out of sight and out of mind. Therefore they can go on and do whatever they want to do in the field.

London: And that's exactly what happened on Steve Lyons's property last year. He found out after the fact that oil company Venoco fracked a well on his ranch in Santa Barbara County.

Lyons: It was upsetting that they didn't tell us what they were going to do, that they didn't discuss it at all. They just did it. And I don't think they wanted anybody to know. They're just trying to do it, I think, under the radar, and they were caught.

London: Answers regarding regulations and transparency are hard to come by even here in Sacramento, where DOGGR is based. In fact, when the agency's supervisor, Elena Miller, pushed for tougher permit requirements, she was let go, and so was her boss.

London: In a letter to the L.A. Times, Governor Jerry Brown writes the firings at the department were because DOGGR was "steadfastly blocking oil production permits," citing the state's need for "a healthy and vibrant oil and gas industry."

London: The shakeup at DOGGR raised a lot of questions and left some, including State Senator Fran Pavley, wondering who's side the agency is on.

Fran Pavley/State Senator: I don't have the inside scoop on exactly why Ms. Miller was let go. We just came back from session just starting in January to find that this all has occurred and taken place, which just raises, you know, a red flag one more time.

London: Tim Kustic took over for ousted supervisor Miller in November 2011. Although he says he supports more transparency, he stops short of leading the charge for additional regulations.

Kustic: The nature of fracking is to some extent self-regulatory. The division is aware fracking has been going on for decades in the state. We are not aware of any associated damage from fracking jobs, especially to the fresh water aquifers in the state.

London [to Kustic]: Well, let me just interrupt you there, because if you don't know how many wells are being fracked, or have been fracked, how do you know there is not damage associated with a frack job?

Kustic: It's not just a matter of is - did - the frack job cause damage, it's... The division looks at the bigger picture...is...which is, is the oil and gas well operating as designed?

London: That's another great question for PXP - but again, we couldn't ask them. Instead, we asked Rock Zierman.

London [to Zierman]: So you don't think fracking poses any threat to public safety?

Zierman: No. I think that, and again, let's remember what we're talking about. We've got this layer of impermeable rock that the reason we're fracking is because nothing can move. If things could move, we wouldn't have to frack. So it can't move. It can only move up the well bore. So long as nothing is happening to the integrity of the well, then the ground water and the environment's protected.

Brian Segee/Environmental Defense Center Attorney: Well, I think it's just wrong, and in fact there's documented instances of water contamination associated with both fracking and oil and gas development in general.

London: Brian segee is an attorney with the Environmental Defense Center.

Segee: EPA has just issued a draft study in Pavillion, Wyo., that shows water contamination, they think, from the fracking well migrating to other abandoned wells in the area. And so there is documented contamination.

Pavley: California is at the forefront of many regulations relating to our environment, and we're very proud of them. But on fracking I think we're behind the ball. The public now has a heightened level of concern. They want to make sure that we're not, after the fact, coming back and addressing a problem that we should have prevented to begin with.

London: And that's why Senator Pavley has co-authored a fracking bill currently making its way through the legislature - AB591.

Pavley: We would know where the wells are that are being fracked. We would know how much water is being used. They would also be required to report what chemicals are being used.

London: But Segee says the latest draft doesn't go far enough.

Segee: It got badly watered down last year. At this point, the companies don't need to disclose what they put into the ground until after the fracking is done under the current version of the bill. We are not supporting the bill in its current version, but we are working to get it strengthened.

London: Some homeowners would also like to see AB591 strengthened. Something as simple as public notices, they say, would go a long way to ease their concerns, but that provision has been removed from the bill.

Kustic: Quite simply it's not in the law and regulations at this point in time. It's something that could be in the laws and regulations.

London: Should it be?

Kustic: Should it be...

London: What's the harm in letting the public know that this well right near your house is going to be fracked?

Kustic: I think there is... I think there is many advantages to doing it, one of which... If it's going to happen, I'd like to see it happen in a format where it's just not a simple "We're going to frack the well next to you," but it's an educational outreach to the community.

London: Why don't we do that then?

Kustic: Why don't we do that? That may be where we're headed with the legislature certainly.

London: DOGGR supervisor Tim Kustic continues to point to AB591 as the solution to concerns over lax fracking regulations. But should DOGGR be doing more?

London: So Tim, as supervisor of the division, you don't have the authority to go to the Department of Conservation and the governor and say, "Look, I think we need to be more transparent about fracking?" You don't have the authority to do that?

Kustic: I do have that authority. But as I said, since the legislature is already pursuing that, I have a lot of other things on my plate I would prefer -

London: So it's not a priority for you?

Kustic: It is a priority, but I already see government moving towards a solution.

London: So while the state regulator is waiting to regulate, the job has fallen, in part, to local governments like Santa Barbara and L.A. counties. L.A. now oversees neighborhood meetings between Baldwin Hills community groups and PXP - the result of a lawsuit settlement meant to provide more environmental monitoring and fewer new well operations.

Woman [speaking at community meeting]: Do you have the statutory authority to regulate fracking? Do you or do you not?

London: The demand for answers about fracking has gotten so intense, that following our interview with Tim Kustic, he and his deputy showed up at the community meeting in March.

DOGGR Deputy: We are going to be working towards more transparency.

London: But the only thing transparent to these residents right now is that DOGGR isn't looking out for their interests, and they also say neither is the county.

Hutchinson: The county is absolutely in the hip pocket of PXP, because essentially the county agreed to PXP's proposals and all the corrective measures that they said they were going to take, so that ended it right there.

London: Supervisor Mark Ridley-Thomas insists the county shares the homeowners' concerns, but...

Ridley-Thomas: The fact of the matter is, that this is not a matter within the county's jurisdiction. It is really a state agency, DOGGR, who has responsibility for this.

London: That issue of responsibility keeps circling back to DOGGR, which is why some ask whether it can effectively and objectively regulate the industry that is actually responsible for funding it.

London: So the division you said works for the people of California, but it's funded by the oil and gas companies that the division is in charge of regulating.

Kustic: That's not uncommon in government. It's not uncommon in California.

London: But is that - forget if it's uncommon or not - is that the best way to regulate? Is that the best way for the people of California to feel that this regulatory agency is taking care of them and has their best interests?

Kustic: Is it the best way? I can't answer that question. It's the funding system we have.

Pavley: I'm hoping that that kind of cozy relationship was not at all responsible for our not having regulations.

Segee: It's dumbfounding that in California, the nation's environmental leader, that our main regulatory agency is sort of throwing up its hands and doesn't know where it's going to happen.

Pavley: I want to make sure we get it right. We're not saying hydraulic fracturing should be prohibited, because we're not sure if there's any problems, but we better have the adequate information to make sure that it's transparent.

London: While the issue of transparency is being hashed out in Sacramento, the residents living here - in the shadow of the Inglewood Oil Field - see it all too clearly.

Smith: My concern is the safety of my family and also the welfare of my house.

Gless: We are basically stuck with an oil field that's going to be functional over there for the next hundred years.

I'm Jennifer London for "SoCal Connected."