[Federal Register Volume 59, Number 231 (Friday, December 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29679]


[[Page Unknown]]

[Federal Register: December 2, 1994]


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DEPARTMENT OF ENERGY
[Docket No. GP95-1-000]

 

State of California, Division of Oil and Gas Tight Formation Area 
Determination FERC No. JD93-00528T (California-2); Notice of 
Preliminary Finding

Issued November 18, 1994
    On October 26, 1992, the State of California, Division of Oil and 
Gas (California) determined that three zones (the Lower Reef Ridge, 
Antelope and McDonald Zones) in the Lost Hills Field, in Kern County, 
California, qualify as tight formations under Section 107(c)(5) of the 
Natural Gas Policy Act of 1978 (NGPA).\1\ Chevron USA Inc. (Chevron) is 
the applicant before California.
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    \1\The determination covers approximately 2,530 acres. The 
recommended area, which is the same for all three zones, includes 
the indicated portions of Sections 4, 5, 8, 9, 10, 15, 16, 17, 20, 
21, and 23 in T27S, R21E.
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    By letter dated December 10, 1992, staff tolled the Commission's 
45-day review period and requested additional support for California's 
conclusion that the three zones meet the Commission's tight formation 
guidelines in Sec. 271.703(c)(2) of the Commission's regulations.\2\ 
Staff requested additional information, in part, because an article 
entitled ``Diagenetically Enhanced Entrapment of Hydrocarbons--
Southeastern Lost Hills Fractured Shale Pool, Kern County, California'' 
indicates that part of the recommended area is considered to be the 
productive heart of both the Upper Antelope shale and Lower Reef Ridge 
shale pools, and that wells in this area exhibit excellent 
prestimulation oil and gas production rates (and/or oil and gas shows) 
that are indicative of effective permeability due natural fractures.\3\ 
Staff also stated that, since Commission records indicate that the 
Antelope and McDonald Zones in the Lost Hills Field have been water 
flooded, staff is unable to ascertain whether the current oil and gas 
flow rates represent the initial in situ permeability and 
prestimulation flow rare characteristics of the subject zones, or 
represent conditions resulting from the production and partial 
depletion of undersaturated oil reservoirs in the Lost Hills Field.
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    \2\Section 271.703(c)(2) requires a jurisdictional agency's 
tight formation area determination to show that: (1) The estimated 
average in situ gas permeability, throughout the pay section, is 
expected to be 0.1 millidarcy or less; (2) the average 
prestimulation stabilized natural gas flow rate (against atmospheric 
pressure) of wells completed for production in the formation does 
not exceed the applicable maximum allowable flow rate; and (3) wells 
in the recommended area is expected to produce, without stimulation, 
more than 5 barrels of crude oil per day.
    \3\The article was published in Volume 6 of the Selected Papers 
to the San Joaquin Geological Society (January 1984).
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    California responded to the tolling letter on June 29, 1993. 
However, the response did not include all the information requested in 
the December 10, 1992 tolling letter and did not contain some 
enclosures that Chevron submitted to California. In addition, staff 
review showed several discrepancies between California's response and 
the history of the development of the Lost Hills Field, as described in 
the 1983 Article. Accordingly, staff's August 13, 1993 letter requested 
the missing enclosures, plus additional information to resolve the 
discrepancies and retolled the Commission's 45-day review.
    To date, neither California nor Chevron has responded to the August 
13, 1993 letter. Without the requested information, we are unable to 
find that California's determination is supported by substantial 
evidence. Under Sec. 275.202(a) of the regulations, the Commission may 
make a preliminary finding, before any determination becomes final, 
that the determination is not supported by substantial evidence in the 
record. Therefore, the Commission hereby makes a preliminary finding 
that California's determination is not supported by substantial 
evidence in the record upon which it was made.\4\ California or Chevron 
may, within 30 days from the date of this preliminary finding, submit 
written comments and request an informal conference with the 
Commission, pursuant to Sec. 275.202(f) of the regulations. A final 
Commission order will be issued within 120 days after the issuance of 
this preliminary finding.

    \4\The Commission notes that California's affirmative area 
determination in California-5 includes some of the same acreage 
covered by California-2. The issuance of a preliminary finding in 
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California-2 does not affect the determination in California-5.

    By Direction of the Commission.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 94-29679 Filed 12-1-94; 8:45 am]
BILLING CODE 6717-01-M