* Water a top concern in dry state
* Baseline knowledge of water supplies incomplete
* Oil companies will be required to say where fracking watercame from
By Braden Reddall and Rory Carroll
SAN FRANCISCO, Nov 15 (Reuters) - California regulators saidon Friday an enhanced monitoring regime for oil and gasproduction that is part of the state's new fracking regulationswould shore up groundwater protection, a top concern in thegrowing state.
The law, signed by Governor Jerry Brown in September,introduces stringent regulations of hydraulic fracturing as wellas of acid injection in anticipation of greater industry effortsto develop the state's vast Monterey shale.
The law will require testing of groundwater around frackingsites starting on Jan. 1, 2014. It also allows property ownersin the vicinity of a fracking site to request to have theirdrinking water independently tested at the well operator'sexpense.
Hydraulic fracturing, or "fracking," has revitalized U.S.oil and gas production in recent years but also prompted chargesthat it damages the environment, causes minor earthquakes andcontaminates drinking water.
Fracking involves injecting water, chemicals and sand down awell at high pressure to crack the rock and prop the cracksopen, releasing oil and gas. Among the chief concerns ofenvironmentalists is that the process contaminates freshwater.
California's Department of Conservation published on Fridayproposed regulatory language to implement the new law. One ofthe measure's key provisions is mandatory monitoring ofgroundwater in oilfields, said Jason Marshall, the department'schief deputy director.
Fracking is a particular concern in California, an aridstate where a growing population and powerful agriculturalindustry make the politics surrounding water especially intense.
"It's important to note that our existing baseline ofknowledge about groundwater quality is somewhat limited,"Marshall told reporters on a conference call. "One of thesuccesses in environmental protection is it's going to increaseour baseline understanding of groundwater."
Marshall explained that the monitoring would build on theexisting protections for California groundwater, which he saidwere already among the most stringent in the United States.
Tom Howard, executive director of the state's water board,said it was putting together an expert panel to implement thenew oilfield monitoring program by 2015. All the informationultimately collected would be posted online, he added.
As for the new well stimulation regulations, they will alsoeventually require oil and gas producers to report where theyobtain their water, officials said. The Department ofConservation will host five public hearings to discuss all thenew rules at cities around the state in January.
Enforcement of the rules would inevitably lead to highercosts for the department, officials acknowledged, adding thatthey would submit a request next June for a budget to reflectthat. Current funding comes from an assessment of 14.06 centsfor every barrel of oil or 10,000 cubic feet of natural gasproduced.
Even before regulations are in place, producers must ensurethey are compliant with the new law, and continue to disclosewhen they inject chemicals for fracking - as they have donevoluntarily about 1,000 times in the past year, officials said.
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