Occidental Petroleum said shale deposits in California could represent a major portion of its U.S. business during the next decade. Oxy, one of the major players in California shale basins, said it expects to produce as much as 300,000 barrels of oil equivalent from state deposits by 2014.
Kristin Lynch, regional director for Food & Water Watch, said an estimated 50,000 state residents have signed a petition calling for a state ban on hydraulic fracturing, dubbed fracking.
"No amount of regulation can make this fundamentally destructive and toxic drilling safe," she said in a statement.
Advocacy groups say energy policies aren't strict enough for fracking. The Environmental Protection Agency proposed a series of fracking guidelines in early May.
Fracking employs a mixture of sand, water and trace chemicals to extract natural gas from underground shale deposits.
Food & Water Watch said while shale presents a good economic opportunity for California, it would come with significant environmental risks.
Dan Jacobson, director of Food & Water Watch ally Environment California, said there should be more focus on a "clean renewable energy future" for the state.