Placerita oil field operator Berry Petroleum Co.’s share prices climbed more than 7 percent Friday on the news that California Gov. Jerry Brown fired two top regulators blamed for standing in the way of approved drilling.
Officials confirmed Thursday that Brown fired Derek Chernow, acting director of the California Department of Conservation, and Elena Miller, the department’s oil and gas supervisor.
Berry, along with Occidental Petroleum Corp., subsidiaries of Exxon and Shell and others, sit on thousands of acres of proven reserves in California. Berry got the green light from the Department of Conservation’s oil and gas division on July 22 to fully exploit its Midway-Sunset field in Kern County, only to be told it must jump through additional regulatory hoops.
“While Berry received approval for our full diatomite development (in Kern County) in the third quarter, the pace of drilling and steam injection is being slowed by the new, more stringent operating requirements of the state regulatory agencies,” Berry President Robert Heinemann said in a statement last week.
Berry had planned to spend all of its capital investment dollars on oil production during the second half of the current calendar year.
A report from the Los Angeles County Economic Development Corp. earlier this year said delays in the permitting process were “holding up an estimated $1 billion in capital investment in oil and gas field redevelopment for an average of approximately one year.”
The report said the delays were costing $164.5 million annually in lost oil production opportunity, 770 jobs, $59.3 million in employee income and $24.4 million in state and local taxes.
According to Bloomberg, permits for new drilling projects in California have decilned 73 percent since 2008 – the last year before Miller took over.