EDMUND G. BROWN JR., GOVERNOR

February 6, 2015

Ms. Jane Diamond

Director, Water Division

Region IX

United States Environmental Protection Agency

75 Hawthorne Street

San Francisco, CA 94105-3901

Re: Class II Oil and Gas Underground Injection Control

Dear Ms. Diamond:

Thank you for your letter of December 22, 2014, regarding the several meetings and 

dialogue we have been engaging in for the past several months, and your request for a 

more detailed plan of action to address issues with California’s Class II Oil and Gas 

Underground Injection Control program.

Our agencies share a common goal with the United States Environmental Protection 

Agency (US EPA): to ensure public health and safety and the protection of groundwater 

resources for California residents who live and work near oil producing areas of 

California. The Division of Oil, Gas, and Geothermal Resources (Division) is 

responsible for ensuring that operators of oil and gas injection wells adhere to 

environmental rules and permit requirements that protect groundwater and other 

resources. The State Water Resources Control Board (State Water Board) assists the 

Division with the protection of water resources. Consistent with our mutual roles related 

to ongoing injection activities, the Division and the State Water Board are working 

closely together for more integrated oversight of the underground injection control 

program.

Following a discussion of the relevant background, we lay out the intended approach 

jointly developed by the Division and the State Water Board to address what has been 

the primary focus of our discussions since last summer: details about the review and, 

where necessary, redirection of underground injection operations in this State. We then 

address your request for detail on our intended plan to meet the critique expressed in 

the 2011 report of the Horsley Witten Group (Horsley Witten). Finally, we conclude with 

a discussion of plans to communicate these developments to the public.

BACKGROUND

DEPARTMENT OF CONSERVATION

DIVISION OF OIL, GAS, & GEOTHERMAL RESOURCES
Ms. Jane Diamond

February 6, 2015

Page 2

Oil and gas production in California is a $34 billion annual industry, employing more 

than 25,000 people with an annual payroll of over $1.5 billion. California is the third 

largest oil-producing state in the nation, producing about 575,000 barrels per day. 

Property and other tax payments to the State and local governments from the industry 

amount to about $800 million annually. There are approximately 90,000 active or idle 

production and injection wells in the State.

Injection wells have been an integral part of California’s oil and gas operations for more 

than 50 years. Currently, over 50,000 oilfield injection wells are operating in the State. 

Injection wells are used to increase oil recovery and to safely dispose of fluid produced 

with oil and natural gas. About 75 percent of California’s oil production is the result of 

Enhanced Oil Recovery (EOR) methods such as steam flood, cyclic steam, water flood, 

and natural gas injection. Of these injection wells subject to UIC regulations, 

approximately 1,500 are fluid disposal wells, which are necessary to re-inject water 

produced with oil and gas and other fluids that cannot be disposed of through any other 

method, such as treatment, beneficial use, or recycling for other industrial applications. 

Most of the oil and gas fields in the State are quite mature. Many are in the waning 

stages of their productive cycle and require EOR techniques for continued development. 

The use of injection wells has been increasing in recent years. The increased use of 

injection potentially creates additional health and safety risks.

The protection of California’s aquifers from contamination is a matter of the highest 

priority for the Division and the State Water Board, and of special importance given the 

state of emergency resulting from our unprecedented drought. Therefore, this effort to 

modernize the regulation of the State’s injection wells must be both urgent and 

thorough. As explained more fully below, the Division has begun systematically 

reviewing these wells and applicable regulations as part of its mandate to protect public 

health and safety.

2011 Audit and Horsley Witten Report

In 2010, the Division worked with US EPA to conduct an audit to review the Division’s 

practices and regulations, and ensure the Division’s compliance with its obligations to 

properly administer its Class II injection program as a primacy state under the US Safe 

Drinking Water Act (SDWA) and applicable California law. The audit, conducted by the 

Horsley Witten Group, was completed in the summer of 2011. Horsley Witten 

highlighted several areas of concern, and the US EPA requested a plan to address the 

gaps identified. The Division responded in November 2012 (Enclosure A) by 

committing to adopt regulations and provide additional resources to close the gaps 

identified in the audit and create a stronger, more robust regulatory program.
Ms. Jane Diamond

February 6, 2015

Page 3

In 2013, the Department took important steps toward meeting this commitment, 

including:

• Added 36 staff positions and enhanced staff training on UIC Program mandates 

and requirements

• Added resources to address orphan well plugging and abandonment

• Worked with the Legislature to help it enact revisions for the financial 

requirements for bonding

• Established a Division monitoring and compliance unit to conduct internal 

assessment of the UIC Program

Injection Project Review and Aquifer Exemptions

The Division acknowledges that in the past it has approved UIC projects in zones with 

aquifers lacking exemptions. The Division has not kept up with the task of applying for 

the necessary aquifer exemptions in hydrocarbon-bearing zones required by statute, 

even though many of these zones possess attributes that would qualify them for 

exemption. The Division has thus been slow to reconcile the reality that industry has 

expanded the productive limits of oil fields established in the 1982 primacy agreement 

with SDWA requirements to obtain aquifer exemptions.

Complicating matters, 11 aquifers with historical injection activities before 1982 were 

described in State documents in the early 1980s as proposed for exemption, and were 

endorsed as exempt in subsequent federal documents.1

 This led to the issuance of a 

number of injection permits in those 11 aquifers. However, the geologic basis for such 

exemptions is now in question. Therefore, in addition to the zones of aquifers that are 

lacking exemptions, these 11 aquifers that have historically been treated as exempt will 

also be evaluated to determine their appropriate exemption status. 

Injection Project Review Process

The Division acknowledges injection project review continues, and a process has been 

developed to determine the wells with the highest risks associated with injection, and 

the steps to be taken to bring injection well permits into compliance with the primacy 

agreement with US EPA. This review examines the following groups of wells, in this 

order: 

 1 Among these documents are (1) a December 13, 1982, Region IX memo forwarding to US EPA headquarters a 

version of the Memorandum of Agreement containing no significant exemption denials, described by Region IX as 

resolving “all known issues” with California’s primacy application, and (2) a May 17, 1985, letter from Frank 

Covington, US EPA’s then-Director of the Water Management Division for Region IX that appears to confirm that 

US EPA did not deny any of the exemptions proposed by the Division in its primacy application.
Ms. Jane Diamond

February 6, 2015

Page 4

Category 1 Wells: Class II water disposal wells injecting into non-exempt, 

non-hydrocarbon-bearing aquifers or the 11 aquifers historically treated as 

exempt

Category 2 Wells: Class II enhanced oil recovery (EOR) wells injecting into 

non-exempt, hydrocarbon-bearing aquifers

Category 3 Wells: Class II water disposal and EOR wells that are inside the 

surface boundaries of exempted aquifers, but that may nevertheless be

injecting into a zone not exempted in the primacy agreement

This review covers over 30,000 wells, more than 29,000 of which are cyclic steam wells 

in hydrocarbon zones. Review of wells in Category 1 is nearing completion. Review of 

wells in Categories 2 and 3 is expected to be complete in early 2016 as annual project 

reviews are completed in compliance with regulation. When completed, this review will 

serve to clarify records and improve data quality so that the full review of the UIC 

program can be completed.

An initial list of wells injecting into non-exempt USDW aquifers was previously provided 

to US EPA. That list includes Category I and II wells. While updating, reviewing, and 

validating that list is ongoing, attached (Enclosure B) is a summary of the information. 

Of the 2,553 wells on the list, approximately 140 of the active wells have been tabbed 

for immediate review by the State Water Board because the aquifers are reported to be 

lacking hydrocarbons and contain water with less than 3,000 mg/l total dissolved solids 

(TDS). The State Water Board is currently reviewing those wells to screen for proximity 

to water supply wells or any other indication of risk of impact to drinking water and other 

beneficial uses.

The Division review and updating of all injection well records in this list will be 

completed by May 15, 2015. The State Water Board expects to be able to review each 

injection well at a rate of approximately 150 wells per month.

Aquifer Exemptions Process

Together, the Division and the State Water Board have identified a process for aquifer 

status evaluation and potential aquifer exemptions. Although injection is occurring into 

aquifers that have not been exempted and the 11 aquifers historically treated as 

exempt, the potential risks associated with such injection differ from zone to zone. 

Last summer, as you know, some injection wells that potentially presented health or 

environmental risks were ordered to cease injection, and the operators ordered to 

provide specific data so that the regulatory agencies could fully evaluate whether these 
Ms. Jane Diamond

February 6, 2015

Page 5

wells could potentially have had any measurable impact on nearby water supply wells. 

To date, the analytical data from the water supply wells that the State ordered to be 

tested have not shown any contamination of the water supply wells by oil and gas 

injection activities.

As injection activities in non-exempt aquifers and the 11 aquifers historically treated as 

exempt are delineated and described, the Division will require relevant oil and gas 

operators to obtain and prepare the necessary supporting documentation to justify 

aquifer exemptions. If these data support an aquifer exemption proposal, the Division 

will prepare and submit draft proposals for aquifer exemptions to the State Water Board 

for their concurrence. Once both agencies are satisfied with the proposed exemption 

and justification, the Division will submit the aquifer exemption applications to the US 

EPA for approval. A more detailed statement of the Division’s and State Water Board’s 

process for development of aquifer exemption applications is described in Enclosure C.

Going forward, the Division will take the following steps in this general order:

1. Work with US EPA to clearly articulate to the public the requirements for aquifer 

exemptions. This will be undertaken via two US EPA-sponsored workshops, one 

in Bakersfield the last week of February 2015 and the second in Los Angeles the 

last week of March 2015. The purpose of these workshops is to inform 

interested stakeholders, of the kind of data and data analysis essential to the 

development of a robust application by the State for an exemption of a portion of 

an aquifer from the SDWA by the US EPA.

2. Delineate a clear process for operators to supply the required supporting data to 

support and justify an aquifer exemption application. The Division will prepare its 

own guidance document to facilitate receiving appropriate information and data 

from operators to prepare justifiable aquifer exemption applications. A guidance 

document should be available by April 1, 2015.

Although this timeline suggests that the Division may not be able to move forward with 

aquifer exemptions until after April 1, 2015, this is not necessarily the case. The 

Division has already been evaluating the data supplied by operators for the preparation 

of a number of aquifer exemption requests by the State. Moreover, to enhance 

efficiency and reduce duplication of efforts, the Division is instructing oil and gas 

operators to develop a process by which several adjacent operators can combine data 

so that portions of aquifers relevant to the operations of different operators can be 

considered as a whole.
Ms. Jane Diamond

February 6, 2015

Page 6

The Division will provide the data and an analysis of the data to the State Water Board 

for consultation prior to submitting them to US EPA. The Division will submit the 

exemption request to US EPA if the portion of the aquifer meets the criteria for 

exemption and the State Water Board determines that injection into the aquifer will not 

adversely affect existing or potential beneficial uses of groundwater.

Wind-Down of Existing Injection and Permitting of New Injection

The Division proposes to use a combination of administrative mechanisms to ensure 

that existing and new injection into non-exempt aquifers and the 11 aquifers historically 

treated as exempt is either phased out or covered by an aquifer exemption, and that 

any threats to drinking water or other beneficial uses of water are urgently addressed.

To summarize, the Division will use rulemaking to codify a wind-down schedule that 

provides transparency to the regulated community and the public at large. The 

schedule will provide for the phased elimination of new and existing injection into 

aquifers that have not been approved as exempt by the US EPA by February 15, 2017. 

New injection will be allowed only if strict criteria are met, and, like existing injection, will 

have to cease if no new exemption has been timely obtained. At the same time, the 

Division, in consultation with the State Water Board, will issue administrative orders to 

address specific circumstances where injection poses a threat to drinking water or other 

beneficial uses of water. Major highlights of the approach to address existing injection 

and new injection into these aquifers are presented below. A more detailed and 

complete description of the approach is contained in Enclosure D.

Rulemaking

By April 1, 2015, the Division will initiate rulemaking to establish a regulatorycompliance schedule to eliminate Class II injection into undisputedly non-exempt 

aquifers statewide. The proposed regulations will require the following:

1. The first principle of the regulations will be that all Class II injection into nonexempt aquifers with less than 10,000 TDS must, in all cases, cease by 

February 15, 2017, unless and until an aquifer exemption has been duly 

approved by US EPA. Injection may be ordered to cease earlier if a well is 

determined to potentially impact water supply wells,2 as discussed further, 

below. (“Administrative Orders.”)

 2

 Injection wells potentially impacting water supply wells include injection wells into aquifers with 3,000 

TDS or less that meet either of the following criteria: (1) the uppermost depth of the injection zone is 

less than 1,500 feet below ground surface (regardless of whether any existing supply wells are in the 

vicinity of the injection well), or (2) the injection depth is within 500 feet vertically and 1 mile 

horizontally of the screened portion of any existing water supply well.
Ms. Jane Diamond

February 6, 2015

Page 7

2. Where a non-exempt aquifer contains 3,000 TDS or less and is nonhydrocarbon producing, injection must cease by October 15, 2015, 

unless and until an aquifer exemption has been approved by US EPA.

3. Where a non-exempt aquifer is hydrocarbon producing, new wells that 

are part of a previously approved project may be permitted if groundwater 

in the vicinity of the hydrocarbon-bearing zone does not currently have any 

beneficial use.3

 Such approvals will include the express condition that the 

permit expires on February 15, 2017, unless US EPA approves an aquifer 

exemption before then.

4. With respect to the 11 aquifers historically treated as exempt, the 

State Water Board and the Division will work with US EPA to evaluate 

these 11 aquifers. If any portion of these aquifers meets the criteria for 

exemption and the State Water Board determines that injection into the 

aquifer will not adversely affect existing or potential beneficial uses of 

groundwater, the Division will prepare and submit an exemption evaluation 

to US EPA. The evaluation and subsequent decision for these 11 aquifers 

will be completed by February 15, 2017. Either by the planned regulation 

or by other appropriate means, the Division may allow for limited new injection 

into these 11 aquifers in the unusual case where the proposed injection 

well is part of an approved project and an initial screening of the target zone 

shows that the zone contains hydrocarbons, has very high levels of naturallyoccurring constituents (e.g., arsenic or boron), or there are other factors that 

make any affected groundwater unsuitable for beneficial use. Finally, the 

regulation would provide that any approval is subject to evaluation of the 

appropriate exemption status of the aquifer.

Administrative Orders

During the process of codifying the compliance schedule to phase out injection into nonexempt aquifers, the Division will issue administrative orders to halt any injection that 

potentially impacts water supply wells. The Division and the State Water Board are 

presently evaluating all injection into non-exempt USDWs and the 11 aquifers 

historically treated as exempt to identify potential for such impacts. The evaluation 

includes screening for water wells in the area of the injection well and collection and 

review of data regarding the water quality and depth of the aquifer where injection is 

occurring. Where the evaluation indicates that an injection well potentially impacts 

 

3

 Note that this does NOT include any use of produced water.
Ms. Jane Diamond

February 6, 2015

Page 8

water supply wells, the Division will issue an emergency order to the operator to cease 

injecting immediately.

Issues Identified in the Horsley Witten Report

The Class II UIC Program is complex, consisting of several components that have 

distinct attributes and therefore require focused sets of regulations, compliance 

approaches, and review requirements. Given the rapid evolution of technologies and 

industry practices to extract more oil and gas from the State’s mature fields, regulations 

developed even a decade ago may not fully address all of the issues created by what is 

now routine industry practice.

Horsley Witten included several recommendations pertaining to the practices, 

processes and policies of the Division used to implement the State's oil and gas

regulations (Enclosure C). Report recommendations address a wide range of the 

Division’s practices, activities and regulations, either directly or indirectly, in these 

areas:

• The definition and protection of underground sources of drinking water 

(USDW) area of review (AOR) and zone of endangering influence (ZEI)

• Well construction and cementing requirements

• Plugging and abandoning requirements

• Requirements for fluid disposal

• Requirements for monitoring of zone pressure

• Annual project reviews

• Well monitoring requirements

• Idle-well planning and testing program

• Financial responsibility requirements

• Cyclic steam injection wells

• Production from diatomite

Regulation Development

Many aspects of the recommendations of the Horsley Witten report can be implemented 

through existing Division regulations. However, others will require new regulation. 

Moreover, though cyclic steam injection wells and techniques employed for oil 

production in diatomite formations were not specifically addressed in the Horsley Witten 

report, they are extensively used in California, and existing regulations in these areas 

can be improved.
Ms. Jane Diamond

February 6, 2015

Page 9

The Division has not had significant changes to its UIC regulations since the original 

primacy application. Regulatory amendments will be pursued through a rulemaking 

process to address these needs. The Division’s goal is to ensure its regulations:

• Protect public health, the environment, and resources

• Address the UIC program mandates

• Address industry practices now and into the foreseeable future

• Are developed with the public participation contemplated by statute

• Set predictable standards for the regulated community

• Are implemented and enforced properly

These regulations will be quite extensive and will take some time to develop. The 

Division anticipates scheduling workshops, public meetings and other outreach to 

discuss regulations to cover a range of topics. The workshops should include at least 

the following: US EPA, State Water Board, Regional Water Quality Control Boards, 

Department of Toxic Substances Control, Air Resources Board, oil and gas operators, 

county and city agencies, non-government organizations, and the general public.

Potential Areas for New and Modified Regulations

We envision that a thorough review of the UIC program, the necessary attendant 

revision of existing regulations, and the development of needed new regulatory 

measures will require a period of approximately three years. The areas in which the 

Division is contemplating new or modified regulations include:

• Well construction and cementing requirements

• Plugging and abandoning requirements 

• Evaluation of the zone of endangering influence (ZEI)

• Requirements for fluid disposal

• Requirements for monitoring of zone pressure

• Annual project reviews

• Well monitoring requirements

• Inspections and compliance/enforcement practices and tools

• Idle-well planning and testing program

• Cyclic steam injection wells

• Production from diatomite
Ms. Jane Diamond

February 6, 2015

Page 10

Exclusive of proposed program revisions and aquifer exemption, the following 

milestones need to be met:

• Review of each and all current UIC projects for completeness of records 

and development of a list of deficiencies.

• Meetings with operators to review records and project deficiencies, 

and develop a compliance schedule (exclusive of aquifer exemptions).

• Initiate and complete rulemaking as a comprehensive package.

The Division will prepare a more detailed work plan for UIC rulemaking by 

April 15, 2015.

Searchable Database for Class II Wells

Activities to review UIC projects, check and revise data on all injection wells, and the 

development of aquifer exemption applications will all drive improvement in the 

Division’s data that in turn will drive the need for vastly improved data management 

systems.

The Division’s data management systems need significant upgrades. In response to 

the demands created by the requirements of the well stimulation program as a result of 

Senate Bill 4, the Division has hired additional GIS staff whose combined capabilities 

will be sufficient to manage all of the Division’s needs. However, other aspects of the 

data management problem will be more difficult to resolve and will be conducted 

continuously in the background as project reviews, well reviews, and aquifer exemption 

information are compiled in a GIS environment.

You asked for a forecast of when the Division might be able to have a fully searchable 

database of injection wells available. Unfortunately, we cannot respond with specificity 

to this request due to inadequacies in the data management environment itself, and 

current lack of financial resources needed to create an adequate environment. The 

Division is, however, strongly committed to this effort and will follow up with US EPA 

when we can provide a more definitive answer.

The Division has created a team to develop a Feasibility Study Report (FSR) that will 

consider the Division’s current and future requirements for data management and the 

kind of data environment that is needed for the Division to serve all stakeholders far 

more efficiently and effectively in the future. The FSR is a fundamental first step in the 

State’s IT-procurement process and will be completed in December 2015. An approved 
Ms. Jane Diamond

February 6, 2015

Page 11

FSR will lead to a budget change proposal to seek the funds needed for system 

development.

Communication Plans

The closure of injection wells in Kern County during the summer of 2014, has required 

focused attention to communication with key stakeholder groups. These include 

industry, environmental organizations, elected officials – especially the state and federal 

elected representatives – the press, and via the press, the public.

The Division and the State Water Board have responded to a large number of 

stakeholder and public inquiries, and, to enhance public awareness, have developed 

frequently asked questions, statements, and presentations delivered at numerous public 

fora.

In short, much preparatory work has been accomplished. However we will continue to 

build on this communications foundation with additional attention to meet growing 

inquiries. We take seriously our responsibility to address growing public concern and 

press inquiries in a timely and informative manner.

Communication and outreach can be amplified by providing regularly updated 

information on the UIC program, background documents and reports, frequently asked 

questions, and work status on priority items noted above, specifically aquifer exemption 

applications, all clearly linked on the Division’s web page. This page will serve as a 

clearinghouse for information on program activities, items of interest to stakeholders, 

and meeting and other notifications.

The Division and the State Water Board will continue to meet regularly with industry, 

environmental and other non-governmental organizations, elected officials, as well as 

US EPA.

CONCLUSION

The severe drought emergency, new regulations for well stimulation with ground water 

monitoring and other requirements, as well as long overdue revisions to the UIC 

program, have fundamentally changed how the Division and the State Water Board 

work together to protect public health and ensure the security of the State’s 
Ms. Jane Diamond

February 6, 2015

Page 12

groundwater resources. We are committed to making this relationship effective so that 

the State can achieve full compliance with the SWDA, and we are committed to revising 

the UIC program efficiently, and with public safety as a first priority. We look forward to 

continuing our active dialog with you and to advancing our Federal-State partnership.

Sincerely, Sincerely,

Steve Bohlen Jonathan Bishop

State Oil and Gas Supervisor Chief Deputy Director

Attachments

cc: Cliff Rechtschaffen, Governor’s Office

John Laird, Natural Resources Agency

Matthew Rodriquez, CalEPA
Enclosure B: Breakdown of Wells 

Potential Injecting into Nonexempt USDW Zones. 
Enclosure B: Breakdown of Wells Potentially Injecting into Non-exempt USDW Zones and the Eleven Aquifers that 

have Historically Been Treated As Exempt

Breakdown review completed as of February 5, 2015

A. List of Water Disposal Wells – 532 Wells

Wells with... Number of Number of wells Number of wells (idle) Total

 Wells issued orders in the 11 aquifers Number of

 historically treated idle wells

 as exempt 

Total Dissolved Solids (TDS) less than 3,000 mg/l 176 10 87 (20) 48

TDS between 3,000 and 10,000 mg/l 282 0 7 (4) 47

TDS under review or Data Requested 32 0 0 14

Subtotal 490 10 94 (24) 109

TDS greater than 10,000 mg/l 42

(Wells being removed from list) 

Total 532

B. List of Enhanced Oil Recovery Wells – 2021 Wells

Wells with... Number of Number of wells Number of wells (idle) Total

 Wells issued orders in the 11 aquifers Number of

 historically treated idle wells

 as exempt

Total Dissolved Solids (TDS) less than 3,000 mg/l 503 0 0 57

TDS between 3,000 and 10,000 mg/l 1327 0 0 225

TDS under review or Data Requested 157 0 0 62

Subtotal 1987 0 0 344

TDS greater than 10,000 mg/l 34

(Wells being removed from list)

 

Total 2021