Fracking lessons from Beverly Hills High

Fracking lessons from Beverly Hills High by John Kemp, Reuters, September 25, 2012, Financial Post
Right at the heart of one of the most affluent and exclusive communities in the country, oil producer Venoco extracted almost 114,000 barrels of crude and 103 million cubic feet of natural gas, as well as 807,000 barrels of waste water, from 19 conventional wells on the campus of the famous Beverly Hills High School last year, according to state records. Across Beverly Hills, 95 wells are currently producing from two pools, which lie entirely beneath a heavily built up area, stretching along Pico, Olympic and Santa Monica Boulevards. The wells have been drilled from four clusters (of which the High School is one), and are hidden in windowless buildings, but are otherwise part of the normal urban streetscape. The field as a whole produced 805,000 barrels of crude oil in 2011, 1 million cubic feet of natural gas and 8.8 million barrels of waste water.

Between 2003 and 2006, six lawsuits were brought against Venoco, the school district and others on behalf of approximately 1,000 former students, alleging that pollution in the air, water and soil as a result of the wells had caused illnesses, including Hodgkin’s lymphoma, a form of cancer. Some of the claims were brought by campaigning lawyer Erin Brockovich – famous for securing $333 million from Pacific Gas and Electric in an earlier pollution case, and immortalised by actress Julia Roberts in an Oscar-winning performance in the film of the same name (“Erin Brockovich fights again”, The Economist, June 12, 2003). But in a setback for the toxic-tort lawyer, twelve test cases were dismissed in 2006. The judge ruled the claimants had failed to prove any medical link between their illnesses and the alleged emissions. In July 2012, Venoco and other defendants entered into a settlement agreement by which all pending cases will be dismissed, according to the company’s latest quarterly filing with the Securities and Exchange Commission (SEC).

In fact the biggest item flowing into and out from California’s wells is not oil but water. In 2009, the state’s oil producers injected 1.381 billion barrels of water, and another 368 million barrels of steam, to stimulate the oil fields (“2009 Annual Report of the State Oil and Gas Supervisor”). Much of the water flows back to the surface and must be safely disposed of or re-injected to maintain pressure. Wells in Kern River produced 250 million barrels of water alongside 29 million barrels of oil, a water-to-oil ratio of 9:1. In July 2012, well number 2A at Beverly Hills High produced 2,137 barrels of waste water and 233 barrels of oil (a ratio of 10:1).

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