Oil producers appeal for time to comply with regulations during pandemic

Some applicants have received deadline extensions and others haven’t. More than a dozen applications are pending.

Oil producers have generally made the case that, although they have been designated critical industries during the pandemic, sharply lower barrel prices have limited their ability to operate as normal.

The Arizona-based Center for Biological Diversity has criticized the state’s offer, saying oil companies operators were using the pandemic as an excuse and should not be allowed to set aside their responsibility to protect against pollution.

State Oil and Gas Supervisor Uduak-Joe Ntuk stated in May that to qualify for an extension delays must have been caused by COVID-19 or government orders related to it and that any postponements must “not increase the risk of damage to life, public health, property or natural resources.”

“Since all California operators are responding to historically low supply demand, with difficult layoffs and cutbacks,” he wrote in a May 1 letter, “CalGEM will consider a one-time, two-month extension in the requirements to submit idle well management plans (IWMP) and fees provided that individual operators demonstrate that this extension will not result in environmental harm.”

State records show 39 deadline extension requests were filed with CalGEM, the California Geologic Energy Management Division, between March 23 and June 16. As of Thursday, six have been approved and 18 denied. Two were ruled unnecessary because the operator has the time requested even without asking for it. An additional 13 remained under consideration.

Ntuk said by email Friday, “Each request is unique for each operator and situation. CalGEM is reviewing the submissions and will process them shortly.”

In several of the denials, state officials judged the applicants’ requests to be beyond the scope of Ntuk’s offer, often because the companies asked for more time than he had offered to grant them.

Local oilman Chad Hathaway, who had asked CalGEM for extra time to conduct mechanical testing of his company’s injection wells in the Edison Oil Field, said he made the request because doing such work is expensive and requires hiring outside labor at a time he’d rather spend the money keeping his own staff working.

“It requires a workover rig, third party packer service, third party pumping service and about 18 hours’ worth of labor all of which are third party (not internal employees),” he wrote in an email. “All in all, about $7-10K worth of time and materials. We prefer to keep OUR people working on projects that can support themselves. We cannot afford to hire third party contractors at the moment.”

The state didn’t grant or deny Hathaway’s request. It said he didn’t need to do the…