With gas firms entering central California, vineyard owners unsure of fracking effects on land


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MONTEREY COUNTY, Calif. -- Paula Getzelman and her neighbors in the Southern Monterey County Rural Coalition have three tasks on their agenda:

1. Combat the aggressive yellow star-thistle weed that is invading vineyards.

2. Add a bike lane to the gravel road that leads to their homes.

3. Learn more about the secretive fracking operations going on over the hill.

That last item is proving thornier than any noxious weed or road expansion. New neighbors aren't common here, but gas companies are moving into California's vast central stretches in the hopes of turning the state's Monterey Shale into the next Marcellus Shale.

They're riding a national wave of gas production that has made its way west to California, a complicated energy-producing state that's home to the environmentalist Sierra Club and was the setting for the oil- and greed-drenched movie "There Will Be Blood." This new gas production is still preliminary -- think Pennsylvania, circa 2004 -- but it has left Mrs. Getzelman and her neighbors looking for answers, or at least for the questions they should be asking.

"We just want to make sure that progress doesn't leave us in the dust," she said.

In Pennsylvania and across the country, hydraulic fracturing technology has opened up reserves of shale oil and natural gas that were once thought inaccessible. Some, like the Marcellus, are gas-rich, while others like the Monterey are primarily oil-based. The Monterey Shale lies under the same parts of central California that saw oil drilling in the early 20th century and which the U.S. Energy Information Administration estimates may still hold 15.4 billion barrels of oil.

Gas drilling here is also entering a land of wine vineyards and farmlands that cover almost 200,000 acres -- fields of grapes and produce that local politicians and residents see as a key part of their economic future. And they worry that the marketability of Monterey vegetables or Monterey wine could be damaged by an association with the Monterey Shale.

Monterey County dubs itself "the salad bowl of America" for the fresh strawberries and lettuce it exports. The area's $8 billion agriculture business can't be compromised by any activity that threatens food quality or water supply, said Simon Salinas, a member of the Monterey County Board of Supervisors.

"Anything that can taint our water and food supply could be devastating to our economy," he said.

Some local politicians and business leaders are already working to build new economic growth by tapping another agriculturally-based industry beyond the strawberry fields. Plans for a "wine corridor" -- a hospitality stretch that would connect Monterey to its more famous sommelier-friendly neighbors, like Napa -- have been in place since 2010.

Monterey has more grapes than Napa, Mr. Salinas said, although it currently exports many of them and lacks processing plants that turn fruit into wine.

So far, his ideas haven't progressed much beyond a promise to "clear out red tape," though one company recently built a 3,000-square-foot wine kitchen in the area.

Still, Mr. Salinas has identified fracking -- and any perceived taint that comes with it -- as a threat.

Vineyard trade magazines in California have printed primers on fracking for owners like Mrs. Getzelman, much like publications in New York did when drilling began in the Marcellus Shale near the Finger Lakes wine region.

Mrs. Getzelman, whose home overlooks acres of vineyards about 175 miles south of San Francisco, isn't a pro grape-grower herself. She and her husband own five acres, selling four variations of wine that retail from $14.99 and $21.99. One red is called the "Old Curmudgeon," after her husband.

From their wraparound deck, they can see for miles across their neighbors' fields and vineyards. Some are hobbyists like the Getzelmans; others are professionals who manage dozens of acres.

"There's a peace and a joy that you get when you walk through the vineyard," she said. "You see the grapes growing ... you understand the life cycle."

The prospect of drilling, long a distant presence but now a closer neighbor, has unsettled her rural community.

"Nobody exactly knows what's going on," she said. "They'll drill a well and there's more stuff going on, and then they'll just go away."

"They" is Venoco, a Denver-based driller that primarily operates in California fields near Sacramento (they also have some drilling operations in Beverly Hills). In its latest annual report to shareholders, the company made it clear that the Monterey Shale is forecast as a major part of its oil portfolio.

"We believe that there are significant exploration, exploitation and development opportunities relating to the Monterey Shale formation," the company wrote.

Venoco currently holds about 256,000 gross acres in the formation, which starts in Monterey County and stretches across central California. An additional 60,000 acres have already seen production.

The firm has drilled more than 20 wells across the formation since 2010, and invested $100 million -- or nearly 40 percent -- of its 2012 expenditure budget to exploring for oil.

It was Venoco's application for drilling permits in Monterey County that gave Mr. Salinas his first brush with fracking last year.

The company had drilled four exploratory wells and planned nine more.

Mr. Salinas told Venoco he wanted greater transparency regarding the chemicals used in the process before any more drilling commenced. The company threatened to sue, but then pulled the application about two months later.

"I think the industry has to really realize: You're going to have a fight on your hands," he said.

Since those first applications, constituents have been asking Mr. Salinas for more information.

"What is fracking?" said one.

"I don't want some of this next to the vineyards," said a Monterey grape grower.

Another resident told him to watch "GasLand," the popular anti-drilling documentary.

For his part, Mr. Salinas followed the modus operandi of many concerned citizens of Monterey: holding off on pronouncements until more facts surface and admitting they're still ignorant on the subject. There's a deliberate distancing from the far-left environmental movements that tend to center in the state's biggest cities.

Or as Mrs. Getzelman put it, "We try not to be Luddites."

About 50 people showed up to a meeting last month near Mrs. Getzelman's home in southern Monterey County to address concerns on future fracking. Mr. Salinas said the crowd was a mix of environmental activists and regular folks looking for more information.

From the statehouse, there's been a push to shore up drilling guidelines after two bills aimed at regulating fracking never made it out of committee. New standards are expected by the end of the year. Drillers aren't yet required to report if they've fracked a well, leaving regulators scrambling to find ways to track the growing industry, while leases filed at the county building are categorized as "Notices of Miscellaneous."

When the rules come down, the state says farmers' concerns about water scarcity will have a place in the legislation.

"Those concerns are going to be loud, and they're going to be taken into consideration," said Don Drysdale, a California Department of Conservation spokesman. "We are already seeing some conflicts between oil and agriculture."

Farmers already complain that new hotels planned for the "wine corridor" development will draw water away from crops, and Mr. Salinas can only imagine the furor that would erupt over fracking operations that use millions of gallons of water per well.

For grape growers like Mrs. Getzelman, fracking could be a threat to a business necessity.

Her vineyard hosts about 4,600 vines. At the peak of the season, they'll consume nearly 30,000 gallons of water per month.

"If you don't have a good water supply, your land is worthless," Mrs. Getzelman said.

She and her neighbors share intel over card games and meet at the public meetings, but information remains scarce on whether central California's formation will soon look more like its Pennsylvania counterpart.

It can be frustrating to know so little about a subject in a town where news travels so fast, she said.

"God knows in this area you could post something in the post office and everyone would see it," she said.

businessnews - marcellusshale

Erich Schwartzel: eschwartzel@post-gazette.com or 412-263-1455. Andrew McGill: amcgill@post-gazette.com or 412-263-1497. First Published October 7, 2012 4:00 AM


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