Los Angeles — California regulators approved over 21,000 new oil and gas drilling permits during Governor Jerry Brown’s last two terms as governor, but data released by two watchdog organizations today reveals that the number of permits for new oil and gas wells approved this year to date under Governor Gavin Newsom have exceeded the rate approved even under Brown in 2018.
From January 1 to June 3 of 2018, the State’s Division of Oil, Gas, and Geothermal Resources (DOGGR) approved 2,365 new oil and gas well permits and 191 fracking permits, according to Department of Conservation data released by Consumer Watchdog and the FracTracker Alliance.
The data shows that this year regulators have “considerably increased” the number of permits granted for drilling new wells (by 35.3%), well reworks (by 28.3%), and hydraulic fracturing (by 103.2%) as compared to the permitting rate during the final year of the Brown administration in 2018, according to a statement from the groups.
Even more alarming, of the 2,365 well permits issued, 1064 or 45% of them benefitted oil companies invested in by DOGGR officials, the groups reported.
“A review of state conflict of interest forms shows that eight regulators managing the state’s oil and gas well approval and inspection process have invested hundreds of thousands of dollars in the oil companies they regulate. One of the regulators is among the top three in command at the State’s Division of Oil, Gas, and Geothermal Resources (DOGGR),” according to Consumer Watchdog.
David Gutierrez, Deputy Director for Programs at DOGGR, disclosed stock worth up to $100,000 in Exxon Mobil, a parent of AERA Energy, which has received 448 drilling permits this year, the second most after Chevron.
“The fact that fracking permits have doubled and oil well permits have increased by more than one third under Newsom means that the oil well machine established under Jerry Brown is on auto pilot — and Governor Newsom has to pull the plug and change the parts,” said Jamie Court, President and Chairman of the Board of Consumer Watchdog. “This is outrageous that more than half a dozen regulators are invested in oil companies that they oversee and approve wells for — and are profiting from the proliferation of oil wells at DOGGR. No state official should profit personally from the decisions they make about oil companies on their state job. That seems to be standard at DOGGR.”
Consumer Watchdog and FracTracker Alliance wrote a letter to Governor Gavin Newsom calling for the removal of Gutierrez and other DOGGR officials with conflicts of interests, as well as an immediate freeze on new well approvals:
“Oil regulators should not be invested in the same oil companies that they regulate. These conflicts and approvals reveal a biased department where oil well permitting is on automatic pilot. We ask that you immediately remove all the conflicted managers in the agency and begin a top-to-bottom ethics review. During this review, you should freeze all new oil and gas well permits until you can guarantee that decisions are made based on public safety, not pecuniary gain.”
Consumer Watchdog and the FracTracker Allliance concluded their letter challenging Governor Newsom to use this revelation to act boldly: “This scandalous ethical breach is an opportunity to advance your state goal of curbing drilling and fracking in the state. We urge you to act speedily and stand ready to assist. Reform begins with ethical and honest regulation.”
Read the letter to Governor Gavin Newsom here:
https://consumerwatchdog.org/sites/default/files/2019-07/DOGGRLettertoNewsomCWDandFracTracker.pdf
Consumer Watchdog said it is also referring Gutierrez and other DOGGR officials to the Fair Political Practices Commission. Government Code Section 87100 prevents officials from making decisions that affect their personal financial holdings. “Mr. Gutierrez appears to be in violation of this code section as it is almost impossible for him to recuse himself on AERA’s regulation given his duties,” the groups wrote.
I have a requested a comment from DOGGR on the letter to Newsom regarding the charges of conflicts of interest by DOGGR officials — and I have not yet received a response. I will post the response here if and when I receive it.
However, a spokesman from the Governor’s Office did tell The Desert Sun it was looking into the allegations: consumerwatchdog.nationbuilder.com/...
"We are aware of the allegations and we are taking them seriously. If a public employee is found to have unethically profited from investments in an industry he or she regulates, that’s unacceptable," spokesman Brian Ferguson told the Desert Sun. "This holds true not just at this particular agency, but across the government — accountability and transparency are guiding principles for Gov. Newsom, and he will hold all officials in his Administration to the highest standards in upholding the government code sections, [California Fair Political Practices Commission] regulations and department policies prohibiting financial conflicts of interest."
Kyle Ferrar, Western Program Coordinator for the FracTracker Alliance, concluded, “Given that Governor Newsom has expressed concerns over climate change and its impact on Californians' health and well-being, he would be wise to use this opportunity to lead his administration in reducing extractive oil and gas activities within the state, rather than continuing to grant permits.
Eight oil and gas regulators are invested in the industry they regulate
The review of state financial conflict of disclosure forms found that the eight oil and gas regulators below are invested in the oil industry that they regulate, according to the groups:
Name |
Title at DOGGR |
Investments |
David Gutierrez |
Deputy Director, Programs, Sacramento, Reports to State Oil And Gas Supervisor |
Exxon Mobil-up to $100k
Magellan Midstream Partners-up to $100K
|
Patricia Abel |
District Deputy, Coastal District, Ventura County, Northwest LA, Southeast Santa Barbara |
Conoco Phillips - up to $100k
Phillips 66 – up to $100k
|
Thomas Goeres |
Senior Oil and Gas Engineer Supervisor, Pipeline and Facilities, Coastal District, Reports to Abel |
Chevron - up to $100k
Exxon Mobil -up to $10k
Schlumberger – up to $100k
|
Richard Boyd |
Senior Oil and Gas Engineer Supervisor, Underground Gas Storage, Reports to Alan Walker |
Royal Dutch Shell – up to $10k Viper Energy-up to $100k
Texas Pacific Land Trust-up to $100K
|
Simeon Okoroike |
Supervising Oil and Gas Engineer, Programs, Sacramento, oversees Enforcement Unit, Reports to David Gutierrez |
Valero - up to $10k |
Christopher Phillips |
Senior Oil and Gas Engineer Supervisor, Southern District |
Occidental Petroleum-up to $10k |
Nicholas Abu |
Senior Oil and Gas Engineer (supervisor), Underground Gas Storage Program, Sacramento, Reports to Wardlow |
Owner, gas consulting business Sandstones Reservoir Solutions. Declared fair market value up to $1,999. |
Charlene Wardlow |
District Deputy, Supervising Oil and Gas Engineer, Northern District, Sacramento |
Exxon Mobil -up to 10k
Valero – up to 10k
BP – up to 10kUnder the Political Reform Act, every state and local agency must adopt a unique conflict-of-interest code, according to the groups. The code requires full financial disclosure by individuals who make or participate in making governmental decisions that could affect their personal economic interests. These sources of income must be listed on a 700 Statement of Economic Interest Form filed with the department and shared upon request,” the groups reported.
|
Under the Political Reform Act, every state and local agency must adopt a unique conflict-of-interest code, according to the groups. “The code requires full financial disclosure by individuals who make or participate in making governmental decisions that could affect their personal economic interests. These sources of income must be listed on a 700 Statement of Economic Interest Form filed with the department and shared upon request,” the groups reported.
Thomas Goeres, Senior Oil and Gas Engineer Supervisor, has up to $100,000 invested in Chevron and up to $10,000 in Exxon Mobil.
His job description includes that “The incumbent will serve as the lead auditor for pipeline management plans, oil and gas facility pipeline, tank and equipment maintenance records, audits, inspections, and tests.”
Chevron has received 616 new permits from DOGGR this year and both Chevron and Aera have received permits in the district where Goeres works.
DOGGR, an agency that employs 366 people, designates 58 regulators who must file a 700 Form based on their job description. Of those, 43 report no stock investments whatsoever. But the groups said it is unknown whether all investments are diligently reported.
In 2007-2008, the California State Auditor found an employee at the Department of Conservation, under which DOGGR falls, failed to disclose ownership of stock issued by companies his office regulated, for example.
Here is a link to the 700 forms for the DOGGR officials with oil and gas investments: https://consumerwatchdog.org/sites/default/files/2019-06/DOGGR700sRegulatorInvestments.pdf
And Consumer Watchdog's FPPC Complaints:
https://consumerwatchdog.org/sites/default/files/2019-07/CWD%20DOGGR%20FPPC%20Complaints.pdf
Oil and gas well permits broken down company by company
Below is a chart of the oil and gas companies and the permits they received to drill new wells and rework existing wells in 2019. AERA Energy, owned by both Exxon and Shell, received more permits to drill new wells than any other company and received the second most permits to rework existing wells. AERA also received 149 of the 191 approved fracking permits.
|
|
Drilling Permits |
Rework Permits |
|
Operator |
Jan 1-June 3, 2019 |
2018 |
Jan 1-June 3, 2019 |
2018 |
1 |
AERA Energy LLC (Exxon/Shell) |
318 |
455 |
130 |
327 |
2 |
Berry Petroleum Company, LLC |
307 |
262 |
74 |
141 |
3 |
Chevron U.S.A. Inc. |
261 |
548 |
355 |
561 |
4 |
E & B Natural Resources Mgt Corp |
73 |
121 |
39 |
78 |
5 |
California Resources Elk Hills, LLC |
65 |
82 |
53 |
128 |
6 |
Sentinel Peak Resources California LLC |
65 |
228 |
33 |
110 |
7 |
California Resources Production Corp |
56 |
194 |
91 |
178 |
8 |
Seneca Resources Company, LLC |
21 |
59 |
19 |
35 |
9 |
Holmes Western Oil Corporation |
14 |
16 |
13 |
19 |
10 |
Royale Energy, Inc. |
6 |
7 |
0 |
2 |
11 |
Naftex Operating Company |
5 |
4 |
5 |
0 |
12 |
Santa Maria Energy, LLC |
4 |
7 |
2 |
2 |
13 |
Matrix Oil Corporation |
3 |
2 |
3 |
7 |
14 |
Warren E&P, Inc. |
3 |
9 |
7 |
22 |
15 |
Amrich Energy, Inc. |
2 |
0 |
0 |
0 |
16 |
Maranatha Petroleum, Inc. |
2 |
0 |
0 |
0 |
17 |
Temporary Energy, LLC |
2 |
1 |
1 |
8 |
18 |
ABA Energy Corporation |
1 |
4 |
5 |
9 |
19 |
Macpherson Oil Company |
1 |
14 |
67 |
121 |
20 |
Simple Storage, LLC |
1 |
0 |
0 |
0 |
21 |
THUMS Long Beach Co. |
1 |
9 |
29 |
77 |
TOTAL |
1,212 |
2,124 |
1,153 |
2,245 |
Big Oil regulatory capture from top to bottom
In spite of California’s “green” image, Big Oil and other corporate interests have captured California regulators from top to bottom. The oil and gas lobby is the most powerful corporate lobby in California — and the Western States Petroleum Association is the single most powerful lobbying organization.
From 2001 to 2017 Chevron and AERA contributed $129 million of the $170 million spent by oil and gas interests to fund California political campaigns, according to the groups. The Western States Petroleum Association, the oil and gas trade association of which Chevron and Aera are members, was the top-spending lobbyist in Sacramento in 5 of the last 7 election cycles.
The latest conflicts of interest by eight DOGGR officials revealed by Consumer Watchdog are only the latest in series of conflicts of interests held by state regulatory officials. In one of the biggest conflicts of interest of the past 20 years, the President of the Western States Petroleum Association (WSPA), Catherine Reheis-Boyd, chaired the Marine Life Protection Act (MLPA) Initiative to create faux “marine protected areas” in Southern California. Her organization was promoting the expansion of offshore fracking and drilling at the same time that she led the effort to create “marine protected areas” in the same region from 2009 to 2012.
It is no surprise that these fake “marine protected areas” fail to protect the ocean from fracking, oil and gas drilling, pollution, military testing and all human impacts on the ocean other than sustainable fishing and gathering. Yet the Natural Resources Defense Council (NRDC), the California League of Conservation Voters (CLCV), the Ocean Conservancy and other corporate “environmental” NGOs claimed that the privately led process that Reheis-Boyd lead was “open, transparent and inclusive,” even though it was anything but.
Reheis-Boyd also served on the task forces to create “marine protected areas” on the Central Coast, North Central Coast and North Coast.
WSPA has spent a total $83,107,421 lobbying since 2005. Chevron spent $44,876,606 in that period; Aera spent $5,627,258.56.
WSPA and Big Oil wield their power in 6 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups: (5) working in collaboration with media; and (6) contributing to non profit organizations.
Because of this money and the power that Big Oil wields in California, the Jerry Brown administration, in stark contrast with its “green” facade, issued over 21,000 new oil and gas drilling permits in California. That include more than 200 permits for offshore wells in state waters -- wells within 3 miles of the California coast.
The latest revelations by Consumer Watchdog and the FracTracker Alliance reveal that the Newsom Administration, in spite of the hopes of fishermen, conservationists, environmental justice advocates and Tribal leaders, is apparently even more committed to serving the interests of oil and gas industry leaders than the Brown administration was.
In addition, the state of California under Brown — and now under Gavin Newson - controls four times as many offshore oil wells in state waters as Trump’s federal government controls in California waters. You can view the map showing the location of wells here: http://brownvtrumpoilmap.org.
This money and power also allowed allowed the oil industry to write the cap-and-trade bill, AB 398, that Governor Brown signed in September 2017, as well as to twice defeat a bill to protect a South Coast marine protected area from offshore drilling.
Ironically, the same WSPA president that led the charge to defeat a bill to protect the Vandenberg State Marine Reserve from offshore oil drilling chaired the Marine Life Protection Act (MLPA) Initiative Blue Ribbon Task Force to create these “marine protected areas” on the South Coast. This should have been a front page story, but the reporters and editors in the mainstream and most alternative media outlets were apparently afraid to cover this huge story.
For more information about WSPA and Big Oil, read my piece: California's Biggest Secret? How Big Oil Dominates Public Discourse to Manipulate and Deceive: www.dailykos.com/...