In December 2012, the federal Bureau of Land Management held an annual auction for oil and gas development rights on federal territory in California, offering up wild lands in Fresno, Monterey, and San Benito counties. It sold off leases to 15 parcels, totaling nearly 18,000 acres. One bidder was a subsidiary of Occidental Petroleum, an oil company that drilled 675 new wells in California in 2011 alone.
The BLM affair works like any other auction: Bids are made verbally, and leasing rights are awarded to the highest bidder. Every last acre was snapped up, locking companies in for 10-year leases.
The average bid per acre? $4.21. The highest bid per acre? Ten bucks. The total federal government revenue? Just over $100,000.
The fact that oil companies can buy up mining rights to such a vast area of public land, for the price equivalent of about a tenth of a house in San Francisco, is nothing new. But this land auction was significant because BLM turned a blind eye to fracking, an oil and gas extraction technique that's fueled widespread opposition. BLM green-lighted the leases based on an official assessment projecting that no more than a single acre of land would be disturbed by the anticipated oil drilling, the same argument used to justify the previous year's auction.
Such a scenario may have been realistic in 2006, when the governmental agency drafted the document it relied on to make such a rosy prediction. But technological advancement has transformed the fossil-fuel sector over the past six years, and the oil industry is buzzing about vast untapped potential contained within the Monterey Shale, a leviathan geologic formation that extends across a major stretch of California, including beneath the federal lands in question.
"The Monterey area has become a focal point," says Brendan Cummings, "because, but for fracking, these areas would never get tapped for oil." An attorney with the Center for Biological Diversity, Cummings splits his work between offices in Joshua Tree and San Francisco. He led the Center in a lawsuit against BLM over its 2011 oil-and-gas lease auction, which affected 2,500 acres, arguing that the government should have realistically assessed the environmental threats posed by fracking before it started handing out drilling rights.
"Fracking changes the economics of oil," Cummings says. "Fracking changes everything."
And it's happening all over California, and growing at a rapid rate.
DRILLING ON STEROIDS
Sounding more like an approximate substitute to circumvent a television ban on profanity, "fracking" is short for hydraulic fracturing. It consists of pumping high-pressure fluids up to 15,000 feet underground and into "horizontal wells" that can fan outward for a mile or more, with the aim of smashing up the shale formations. While a form of fracking has been in use for decades to "rework" oil wells, the kind of high-pressure, high-temperature operations now being employed represent a departure from traditional methods.
The exact contents of the proprietary fracking fluids are mostly secret, but they're known to contain high volumes of water, sand, and a patented blend of toxic chemicals, sometimes incorporating acid to make the rock brittle enough to fracture.
"Once they've fracked up the shale," explains Adam Scow, California campaigns director at San Francisco-based Food and Water Watch, "they can pump indefinitely." It's a short-term, expensive operation, Scow says, amounting to "drilling on steroids."
On April 8, a federal judge ruled that the Obama Administration had violated federal law in the 2011 BLM auction by failing to first conduct an environmental impact study on fracking. It's too soon to say how this will affect the 18,000 acres auctioned off in December, but Cummings says he expects to be back in court before long.