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Jerry Brown Oil Scandal: Governor Fired Regulator Over Oil Rules

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SACRAMENTO, Calif. (AP) -- A top state regulator and his deputy were removed last year after ignoring pressure from Gov. Jerry Brown to relax rules for companies seeking to tap California's oil, according to a newspaper investigation.

The governor asked officials in October to develop a permitting shortcut for firms hoping to employ underground injection, a risky method of oil extraction common in California.

Department of Conservation head Derek Chernow wrote a memo stating that easing regulations on underground injection would violate environmental laws, the Los Angeles Times reported Sunday.

The process, in which a rush of steam, water and chemicals flushes oil from depleted wells, had been linked to spills, eruptions and the death of a worker in Kern County. The federal Environmental Protection Administration had asked the state to tighten its regulations, but the oil industry complained in a letter-writing campaign to Brown that the strict rules were hurting a key state business.

A week after the memo was written, Brown had Chernow removed, along with a deputy, Elena Miller, the Times said. The governor appointed replacements who agreed to stop subjecting every underground injection project to a comprehensive review before issuing a permit.

Administration officials told the newspaper the eased permit rules were part of the governor's broader effort to streamline regulations and spur job creation. Brown wanted to move away from a "one-size-fits-all" approach to permitting in a state with vast geological differences, officials said.

"We have to balance good environmental protection and economic growth," John Laird, Brown's secretary of natural resources, told the Times. "The law allows discretion on how you best protect the environment and move the applications along ... Our goal is to make things run more efficiently."

Catherine Reheis-Boyd, president of the Western States Petroleum Association, a lobbying group, told the Times that regulators had been requesting so much information about every project - "an infinite do-loop" - that they effectively halted production for some firms.

"We've been in business since the turn of the century, and then all of a sudden everything we do out there is not right," said Les Clark, executive vice president of the Independent Oil Producers Agency, a trade group. "It starts snowballing, and before too long you're not going to be in business because the regulations are too costly and too complicated to deal with."

Administration officials said at least 77 well permits that were on hold as of Nov. 15 have since been approved.

Earlier this month, Brown boasted about the expedited permits. At a solar energy farm near Sacramento, he reaffirmed his commitment to all forms of energy development.

"It's not easy," Brown said. "There are going to be screw-ups. There are going to be bankruptcies. There will be indictments and there will be deaths. But we're going to keep going."

Chernow and Miller, who were hired under former Gov. Arnold Schwarzenegger, declined to comment.

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