Long Beach officials have decided not to move forward with hydraulic fracking at the city’s oil islands off the coast because oil prices have fallen too low to be worth the effort.
“We made a decision not to frack for economic reasons,” Kevin Tougas, the city’s oil operations manager, said in an email Friday.
The state agency in charge of permitting hydraulic fracturing, commonly referred to as “fracking”granted permits in June that would have allowed for the operations to go forward at eight existing offshore wells, in addition to five new wells.
Long Beach’s city government owns four man-made oil islands near the city’s coastline and a California Resources Corp. subsidiary is responsible for oil production activities there.
Hydraulic fracturing involves the injection of pressured water, sand and other chemicals at oil and natural gas well sites in order to facilitate drilling operations. The practice has become increasingly controversial in recent years amid debates as to the extent of possible environmental risks including the groundwater contamination and heightened seismic activity.
California Resources Corp. manager for external and security relations William Blair said the company has no immediate plans to reconsider fracking at the Long Beach islands and is not pursuing permission for offshore fracking elsewhere in California.
Tougas acknowledged shortly after the state’s Division of Oil, Gas and Geothermal Resources granted the permits that officials had not yet determined whether it would make economic sense to use the permits.
Spot prices for West Texas Intermediate crude oil were about $61 a barrel when the state agency granted the permits, according to the Energy Information Administration. By Friday, West Texas prices had fallen to below $35 a barrel on the New York Mercantile Exchange.
The Center for Biological Diversity, an environmental group, had sought to block any attempts by Long Beach and California Resources Corp. to conduct fracking operations at the oil islands since after the state’s issuance of the permits.
The environmentalist group sought the California Coastal Commission’s intervention, and that agency’s officials insisted Long Beach would require additional permits to actually take advantage of the go ahead obtained from California oil officials.
Center for Biological Diversity spokesman Patrick Sullivan said he thinks environmentalists pressure also affected Long Beach officials’ move to forego fracking plans, adding that the Center will continue to oppose offshore fracking.