CALIFORNIA - Oil companies are eying the Central Coast because under the golden hills around it could be California's next big boom. Igniting a statewide controversy, is the relatively new method of extracting natural gas and oil that's currently buried thousands of feet underground, hydraulic fracturing or fracking.

Central Coast News went to a small town in Kern County, where oil companies have already used the method, to find out whether the growing industry stands a chance against some environmentalist fighting to stop it in the state.

Possible Groundwater Contamination

The city of Shafter, California, has a population of 17,000 and among them is almond farmer, Tom Frantz. Frantz has lived in Shafter his whole life, and for the most part, things have been good.

"I drive through this area on a daily basis. I go to Shafter and drive pass the oil wells. I see a lot of things that bother me," said Frantz.

Last year Frantz videotaped a suspicious fluid discharge that was coming from an oil operation. After Frantz posted the video online, he sent the video to the Central Valley Regional Water Quality Board. The agency then began an investigation and tested a sample of the fluids dumped. The test found the fluids were laced with boron, salt, and a mixture of chemicals related to gasoline and diesel.

Frantz said all that was a result from hydraulic fracturing. "Here they were breaking the law right in my backyard. Dumping fluids into a pit that cold contaminate my groundwater," said Frantz.

The water quality agency is investigating operations in the Shafter area. According to Frantz, it's the state's first look at the impact fracking can have on the quality of groundwater.

What about Earthquakes?

Fracking is the use of specially blended liquids, pumped into a well under extreme pressure causing cracks in shale formations underground. The cracks allow oil and natural gas to flow.

"Here in California we heard rumors that fracking was happening but no one really knew what was going on, " George Torgun, Staff Attorney at EarthJustice. 

EarthJustice, a non-profit environmental law firm based in San Francisco, has been on the forefront of representing clients affected by fracking. Torgun said when they started asking questions about fracking in California to the Oil, Gas and Geothermal Division in 2010, the state agency didn't really know much. 

"How much fracking is happening in the state? They didn't know. What are the environmental impacts of those activities? They had no idea. They required no reporting from the industry about when fracking is happening, where it was happening, how much water was being used, what chemical was being used. Simply no data," said Torgun. 

So far, there 1,200 oil wells have been fracked in California, that's according to the website, a site where oil companies are voluntarily reporting their methods.

In California, geologists say there should be more concern about them triggering earthquakes. 

"The difference in California would be that we have a number of active faults, if you trigger an earthquake, it could trigger a large earthquake," said Bob Barminski, Geologist on the Central Coast.

Barminski said fracking can put too much pressure on rocks underground and then fractures them. He said that's when it can trigger small earthquakes because it reduces the friction that holds rocks together.

What's more, the newer way to frack has changed from going into the ground just vertically to frack, to going down vertically and then horizontally. Barminski said that means companies could be increasing the risk of larger earthquakes.

What's even more concerning for environmentalist like Frantz and Torgun, California sits on the largest oil reserve in the nation, the Monterey Shale.

Economic Growth

Fracking is nothing new in the country. It happens in Pennsylvania, Texas and North Dakota. 

"In general, I don't think there are any concerns for hydraulic fracturing," said Dennis Johnson, Mayor of Dickinson, North Dakota. Dickinson has seen dramatic economic growth and Mayor Johnson gives credit to the fracked wells in the Bakken Shale Formation near Dickinson.

"It's led to success in the Bakken and that in turn has led to more jobs," said Johnson

Johnson said in 1999 North Dakota was producing less than 1,000 barrels of oil a day, but this past January they reached one million barrels a day. The sales tax revenue has nearly doubled from $5.3 million to $10.5 million in the past two years. He added the unemployment rate, sits close to one percent.

When asked where the growth came from, Johnson said, "this growth is almost solely oil driven."