1. SCOPING MEETING FOR ENVIRONMENTAL IMPACT REPORT REQUIRED BY PUBLIC RESOURCES CODE SECTION 3161 (b)(3) AND (4) (SENATE BILL 4) (PAVLEY) C ALIFORNIA D EPARTMENT OF C ONSERVATION DIVISION OF OIL, GAS, & GEOTHERMAL RESOURCES

2. INTRODUCTORY REMARKS

3. Welcome. This event is a scoping meeting regarding the EIR required by Public Resources Code section 3161, subdivision (b)(3), otherwise known as SB 4. SB 4 became law in September of this year, and one part of this new law requires the Department of Conservation, through its Division of Oil, Gas and Geothermal Resources, to conduct an EIR regarding the impacts resulting from well stimulation treatments, which includes hydraulic fracturing. The EIR is scheduled to be completed by July 1, 2015. This meeting is not part of the process regarding the public review of regulations to become effective in 2015 regarding well stimulation treatments, also required by SB 4. Information about that process can be obtained on the Department of Conservation’s website. There are a great many legal requirements associated with the preparation of an EIR in California. This meeting is just one step in the process, and that step is to receive comments from interested government agencies, and the public, about what the EIR should cover, that is, the scope and content of the EIR. Only one scoping meeting is required under the laws governing the preparation of EIRs, but the Department is holding five meetings in order to increase the opportunities for interested parties to comment. Written comments can also be submitted, and is encouraged. Information about submitting written comments will be provided later in this presentation. It may be important to you that this meeting is not being held to debate the pros and cons of hydraulic fracturing or well stimulation treatments. Rather, this process is to implement the direction set by the Legislature in SB 4. This meeting is held to receive verbal comments about what issues the public thinks the EIR should cover, and what concerns the public may have about the practices of well stimulation and/or hydraulic fracturing. Ultimately, any analysis, conclusions or recommendations appearing in this EIR will assist the Department in regulating these activities and ensuring the protection of the environment and human health and safety.

4. Agenda Overview of different processes required by SB 4 New Statutory Definition of Well Stimulation Treatments Directive to Prepare an Environmental Impact Report (EIR) Objectives of the EIR Approach to the EIR EIR Study Regions EIR Schedule and Future Participation Contact Information / How to Submit Scoping Comments

5. SB 4 Requires... DOC to implement interim (“emergency”) regulations regarding well stimulation activities occurring in 2014 (released this week). DOC to propose and receive comments regarding permanent regulations regarding well stimulation activities occurring in 2015 and beyond (released last month). Prepare an EIR to provide the public with detailed information regarding any potential environmental impacts of well stimulation in the State (THIS requirement is the focus of tonight’s meeting).

6. Statutory Definition of Well Stimulation Treatments ( added to Public Res. Code by SB 4 ): “[A]ny treatment of a well designed to enhance oil and gas production or recovery by increasing the permeability of the formation. Well stimulation treatments include, but are not limited to, hydraulic fracturing treatments and acid well stimulation treatments. Well stimulation treatments do not include steam flooding, water flooding, or cyclic steaming and do not include routine well cleanout work, routine well maintenance, routine removal of formation damage due to drilling, bottom hole pressure surveys, or routine activities that do not affect the integrity of the well or the formation.”

7. Statutory Directive To Prepare an EIR New Public Res. Code Section 3161, subd. (b)(3) and (4) require DOGGR to:  Prepare an EIR pursuant to the California Environmental Quality Act (CEQA) in order to provide the public with detailed information regarding any potential environmental impacts of well stimulation in the State.  Evaluate the well stimulation activities that may be conducted, as defined in new Public Res. Code Section 3157, that may occur at oil and gas wells in the State existing prior to and after September 20, 2013.

8. Proposed Objectives Objectives of EIR:  Ensure DOGGR’s compliance with new Public Res. Code Section 3161, subd. (b)(3) and (4).  Identify, evaluate and disclose the potential environmental impacts of well stimulation treatments.  Further the Legislature’s efforts to ensure that well stimulation practices are conducted in a manner that assures environmental protection, public safety, data collection and reporting, interagency coordination, regulatory oversight and monitoring, and public disclosure.  Allow for the safe recovery and production of the State’s oil and gas resources.

9. EIR Approach State California Environmental Quality Act (CEQA) Guidelines Section 15168: Program EIRs are allowable and encouraged under CEQA for a series of actions or activities that can be characterized as one large project and are related either: Geographically As logical parts of a chain of activities In connection with rules, regulations, plans or other general criteria governing a continuing program, and/or As individual activities carried out under common authority (statutory or regulatory) and having similar environmental effects which can be mitigated in similar ways.

10. EIR Study Regions

11. EIR Scope / Environmental Factors (non-exhaustive list) AestheticsLand Use and Planning Agriculture and Forestry ResourcesMineral Resources Air QualityNoise and Vibration Biological ResourcesPopulation and Housing Cultural ResourcesPublic Services Geology and Soils / SeismicityRecreation Greenhouse Gas Emissions / Climate ChangeTransportation and Traffic Hazards and Hazardous MaterialsUtilities and Service Systems Hydrology and Water Quality Alternatives

12. EIR Schedule & Future Participation Notice of Preparation Publication and Public/Agency Scoping November 18, 2013 – January 16, 2014 (60 Day Comment Period) Draft EIR Publication and Public/Agency Review and Comment September - November, 2014 (60 Day Comment Period) Public Workshops on Draft EIRSeptember – November, 2014 Final EIR PublicationJune, 2015 Final EIR Decision Making/CertificationJune, 2015

13. SB 4 EIR Basic Timeline... Dec. 2013 Sept.-Nov. 2014 June 2015 Scoping Comment on DEIR Final EIR _____I_______________I________________I_______ → → → → → → → → → → → → → → → → → → → →

14. Contact Information Written Scoping Comments via U.S. Mail: Ms. Adele Lagomarsino California Department of Conservation Division of Oil, Gas, and Geothermal Resources 801 K Street, MS 18-00 Sacramento, CA 95814-3530 Email Scoping Comments:SB4EIR@conservation.ca.gov Scoping Process Information:(916) 322-1348 SB 4 Information: http://www.conservation.ca.gov/dog/Pages/Index.aspx

15. PUBLIC AND AGENCY SCOPING COMMENTS...