The Student Who Took on Venoco

The oil giant says it didn’t use acid to get offshore oil -- intern disagrees

An oil platform in the Santa Barbara Channel. (beltz6 / Flickr.com)

by Natalie Cherot, Mission & State, Santa Barbara, March 11, 2014

Last month, the Environmental Defense Center announced that Venoco, Inc., had been issued at least 10 permits since 2006 for acidizing at its Platform Holly operations where it drills the offshore South Ellwood Oil Field. Whether Venoco applied the permits to clean its well bores (the hole drilled to provide access to deposits) as its claims, or for extracting oil, as an unlikely student sleuth suspects, is now at the center of a growing controversy.

Matthew Buggert, a UC-Santa Barbara senior doing an internship with the joint UCSB Associate Students Coastal Fund and the EDC, discovered the permits while following up the EDC report issued last October 2013 that claimed 15 incidences of fracking from offshore rigs occurred in federal waters over the past few decades and that drillers disposed chemical-laden wastewater directly into the ocean.

Now, the skinny-jeans wearing, bearded Buggert finds himself in the middle of a regulatory brouhaha. During his research, he discovered a loophole in the permits through which Venoco might be driving its acidizing drill bits. Acidizing is an enhanced oil-recovery and well-stimulation practice that uses chemicals (often hydrofluoric acid) to dissolve mud and sediment in naturally fractured shale formations. The practice is sort of like clearing hardened arteries so that trapped oil and natural gas can flow more freely.

Venoco, the Denver-based oil company that has been actively plumbing the giant Monterey Shale formation that extends from Sacramento through the Central Valley and into North County, as well as several local offshore sites, denied it is using acidizing to extract oil. The company claims it was simply using the permits and the process to clean its well bores. Using chemicals typically employed in well stimulation to clean well bores does not require public disclosure. Using them for drilling does. Thus, Buggert’s findings may have exposed a regulatory gap—if acidizing permits are issued for well-bore cleaning, who is making sure those permits aren’t misused for drilling?

The EDC followed up its October fracking report with an announcement last month claiming that Venoco has used acidizing permits 10 times at Platform Holly since 2006 to stimulate wells. In a response to the report published in the Santa Barbara Independent, Venoco insisted it only used acid cleaning, not extracting. The EDC, in response, said the state’s Division of Oil, Gas and Geothermal Resources (DOGGR) records show Venoco used benzoic acid, which is typically employed in enhanced drilling jobs.

Buggert is the catalyst for the most recent charge against Venoco. On February 25, in a modest UCSB classroom with a white linoleum floor and buzzing fluorescent lights, he presented his findings to fellow student environmentalists and EDC honchos, intending to show that Venoco did more than just clean well bores.

Using charts, graphs and data compiled through his investigation of DOGGR records kept at the Orcutt district office, Buggert showed Venoco used hydrofluoric and hydrochloric acid in much larger amounts than would be appropriate for well-bore cleaning. Buggert also found references to “pump acid stimulation,” which would indicate enhanced oil recovery.

Monterey Shale oil doesn’t flow easily. Matrix acidization, the technique the EDC claims Venoco is using, injects acid in rock formations in which oil is trapped to open up thin pathways, or wormholes, in the rock for oil to flow through. Venoco may acidize rather than frack the Ellwood oil field, because in their own words the field is “naturally frac'd.”

Little is known about what acidization does to the ocean and marine life. In an interview with Mission and State, the EDC’s Brian Segee said, “Oil companies appear to be using larger quantities and heavier concentrations of acid treatments today as opposed to past practice. But much like fracking, we have limited information about the details of treatments and their impacts on human health and the environment.”

According to engineers of the National Institute of Technology (now the Everest Institute), it is known that hydrochloric acid and hydrofluoric acid can cause severe corrosion on well cases and drilling tubing. The estimated annual cost of corrosion in the oil and gas industry is $1.37 billion.

In the U.S., United Steel Workers campaigned to end the use of hydrofluoric acid. According to the union, the acid is dangerous to work with. The Center for Disease Control lists the chemical as a “potential agent of chemical terrorism.” But "Breaking Bad" fans might remember hydrofluoric acid from Season One. Meth cooker Jesse Pinkman drops a dead drug dealer in a bathtub and pours the chemical on him, dissolving both the body and the bathtub.

Venoco so far refuses to answer any more questions about the nitty gritty of their acid operations. When asked about the particulars of the Platform Holly acidizing, Venoco spokesperson Lisa Rivas responded that “these are all good questions for State Lands Commission or DOGGR.”

Venoco has much at stake here. It’s in the middle of an environmental impact review for its proposal to expand its Platform Holly operations. Venoco has claimed it can get 2.1 million barrels from Ellwood. Farther south, in Carpinteria, where Venoco maintains its regional offices, local environmentalists are trying to block the company from drilling within city limits.

To the charges of dumping wastewater in the ocean, Rivas does say, “Platform Holly is a zero-discharge platform—meaning nothing is released to the ocean.” It is illegal to dump wastewater in California waters, though it’s a different story in federal waters, 3 miles out. State wells must inject the waste from fracking and acidizing into the ground. Venoco disposed 1.4 million barrels of waste in 2012 and 694,841 barrels in 2013 into a collection site that is just feet away from the fabled Sandpiper Golf Club.

The controversy over whether Venoco used acidizing to stimulate wells or to clean well bores puts a spotlight on recent legislation aimed at bringing some oversight to enhanced drilling statewide. SB 4, the so-called “fracking bill,” requires companies to disclose the chemicals used in fracking and acidizing as of the first of this year, as well as maintain the “integrity” of their wells. It also requires companies notify neighbors before drilling, monitor for air pollution, do groundwater testing and for regulations on both fracking and acidizing to be in place by 2015.

“Matt’s research taps into the controversy of how the [SB 4] law will be interpreted,” said Segee, after Buggert’s presentation. SB 4 does not cover well-bore cleaning, meaning the same chemicals used for matrix acidization, for example, can be used to clean well bores without adhering to SB 4 regulations.

DOGGR, meanwhile, is saying that oil companies aren’t ready for SB 4, nor is the department prepared for the regulatory burden—especially when it comes to splitting hairs over whether it’s a shallow acid job (well-bore cleaning) or a deep acidization used to stimulate oil production.

Another option—a moratorium on enhanced oil extraction techniques—is showing a faint pulse in Sacramento. Segee has seen these proposals come and go before, but he’s convinced that is what is needed until the consequences of such techniques are better understood.

“We need to hit the pause button,” he says, and then joins Buggert and his fellow UCSB students gathered around a generous display of pizza.

http://www.missionandstate.org/departments/our-town/student-took-venoco/