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SCOTUS Arguments in CIPA-Supported Case

04/26/19

U.S. Supreme Court (SCOTUS) last week heard arguments urging the nation’s highest court to overturn a lower court ruling that the state’s labor laws apply for offshore operations in federal waters.

In 2018, a three judge panel for U.S. Court of Appeals for the Ninth Circuit ruled in Newton v. Parker Drilling Management Services, Ltd. that California wage laws apply, which may mean some workers could claim back pay.

Legal publication, Law 360, reported that the justices seemed skeptical that California labor law applied in the case:

(Justice Brett Kavanaugh) asked Frederick why Newton’s former employer, Parker Drilling Management Services Ltd., is wrong to argue that the (Outer Continental Shelf Lands Act)  OCSLA’s “not inconsistent with” language only allowed state law to fill gaps in federal law.

“’Not inconsistent with’ in its ordinary parlance would mean not incompatible with. And incompatible is a word that is stronger than simply the creation of a void or a gap. You would look at whether there is a conflict or inconsistency,” Frederick replied.

Kavanaugh responded “Well, I would say in ordinary parlance, two different requirements are not consistent with one another.”

The “two different requirements” Kavanaugh referred to are whether offshore drilling employees who work multi-week rotations out on a rig should be paid for their downtime. Newton argues that under California labor law, they need to be. Parker argued that federal law applied, which said down time doesn't need to be paid for.

Another legal publication, the Daily Journal, reported that the case has far-reaching consequences and could spur more lawsuits:

“There are other statutes and laws that could play a role here, and I see this case opening the doors for employees and plaintiffs building creative arguments for other laws creating liability for companies doing work on the outer continental shelf,” said Amy M. Gaylord of Akerman LLP.

Click here to read the full transcript of last week’s oral arguments.


Oil Workers Lace Up Work Boots to Walk the Capitol

04/08/19

The force behind our industry – the men and women who proudly produce oil and natural gas under the world’s strictest standards – last week met with lawmakers and shared their powerful stories as single parents, veterans, union members and second chancers. Workers also discussed the emphasis they place on safety and environmental protections in the workplace because they live in neighboring communities and breathe the same air and drink the same water.

More than 70 workers participated in the 3rd annual Oil Workers Day, an event hosted by both CIPA and WSPA. Workers met with more than 50 legislators and legislative staff members who had varying ranges of support for the industry.  Some workers had the opportunity to meet with the chief of staff of Lieutenant Governor Eleni Kounalakis as well as Governor Newsom’s legislative secretary.

Caption: Workers in Governor Newsom’s office meeting with the Governor’s legislative secretary and Senate Minority Leader Shannon Grove (R-Bakersfield).

The event has grown exponentially since the first year and feedback continues to be positive from both workers and the legislators and staffers. This event allows policymakers to make a human connection to a highly-regulated industry that is often falsely maligned by those who do not understand that hardworking families will be hurt if production were to end in California.


Bill on Waste Discharge Requirements will not Proceed this Session

04/01/19

A bill that would authorize a regional water board to approve a waste discharge requirement will not go forth this session.

Salinas Valley Assemblyman Robert Rivas has decided not to carry the controversial measure. The bill was not only facing mounting opposition from the oil and natural gas industry, but pressure from the agriculture community including the California Farm Bureau, California Food producers, the Wine Institute, Cattlemen’s Association and African American Farmers of California and the Cawelo Water District to name a few.

CIPA’s opposition was based on the bill’s redundancy.  For example, aggressive action by the Central Valley Water Board (CVWB) anticipated this issue and rendered it unnecessary. The CVWB has required crop sampling in irrigation districts that accept treated produced water for irrigation. Thus far, citrus, almonds, carrots, garlic, pistachios, grapes, tomatoes, and apples have all been sampled. The Food Safety Expert Panel (FSEP) provides the Board with suggestions on sampling and members review analytical results. According to the CVWB FSEP fact sheet: “Crops irrigated with produced water have been tested for a wide range of oil field associated constituents, including some additives. Crop sampling is being conducted to ensure that constituents are not accumulating in crops at levels that pose a risk to human health. Thus far, analytical results from crop sampling have found no evidence that consuming crops irrigated with produced water poses any threat to public health.”

Assemblyman Rivas made it clear that he is and will be driven by “data” in his decision-making regarding oil and natural gas issues. The author was provided with an abundance of information that proved work in this area mandated by SB 4 (Chaptered in 2013) is well underway and the pending results will be able to determine whether any action is necessary. All industries who are a part of the “treated produced water” chain have the utmost concern for the health and safety of the water used to irrigate crops and have done so for more than 30 years under strict existing regulations. 

Regional Water Boards have a long history of regulating water districts that utilize treated produced water and mandate rigorous testing. To add another layer of bureaucracy would have been unnecessary. We look forward to working with all authors who are willing to accept the results when proper background is provided to combat unnecessary proposals.


Bright Outlook in Latest Drilling Activities Report

04/01/19

For more than 40 years, petroleum geologist consultant Ronald Bain has presented his annual findings on Sacramento Valley drilling activities to the Sacramento Petroleum Association.

Bain presented this year’s report in late March. He found that drilling activity over the past two years is very similar and the number of operators dropped from four in 2017 to two in 2018. However, there could be some positive news for drilling activity in the near future.

Bain noted the “rediscovery” of oil in the Brentwood Field, which was first discovered by Shell Oil in 1962 and reached peak production in 1964 (over one million barrels oil). The field was last produced in 2000 and abandoned in 2005. The completion test of the Temporary Energy, Venturini-Ginochio No. 4 had the following results:

Tested average of 480 b/d oil under chock, 1029 open. 
742 Mc/fd, 371 bbls oil total over 19 hour test period. 99.5% oil cut.

As of March, the results of Temporary’s Venturini-Ginochio No. 3 have not been published. The company has not announced its drilling plans for the remainder of this year.

He also notes that Royale Energy’s drilling program might encourage other operators to activate drilling projects. In 2018, Royale Energy continued its program in Rio Vista field and its CRC No. 33-1 during a two-hour test flowed at a stabilized rate of 4600 Mcf/day with high pressures from two zones within the Mokelumne River formation. The well reached a total depth of 6800 feet and discovered multiple pay zones. Royale Energy plans to drill seven additional wells at Rio Vista during its 2019 program as a part of a joint-venture with California Resources Producing Company (CRPC). According to the joint agreement, Royale has the rights to drill at least 30 wells in the Rio Vista field within three years.

To read the report in its entirety, click here.


Scholarship Opportunity for CIPA Members

Greasebook, an oil and gas software management company, is offering $500 scholarships for women currently or interested in working in the oil and gas industry. The $500 scholarship can be used toward educational and professional development goals including coding bootcamps, online programming courses and textbooks. The goal of the scholarship is to promote gender diversity in the oil and gas industry. 

According to Greasebook, "We believe we can empower women aspiring to become not only top software engineers, but also to come out and involved in oil and gas, too."

All women ages 13 and older, with any levels of educational attainment, are encouraged to apply.  The scholarship is an annual rolling scholarship. The 2018 deadline to apply is May 31 at 11:59 pm. Multiple scholarships will be awarded. Winners will be announced on or before June 30.

To apply, visit http://www.greasebook.com/oilfield-software and scroll down to the page to find the scholarship application.  Questions about the scholarship may be sent to: scholarships@greasebook.com.