Oil pumps operate near Lost Hills, Calif. Gov. Jerry Brown signed a bill that will regulate fracking in California for the first time. Rich Pedroncelli/AP

California Gov. Jerry Brown signed legislation Friday that will establish the state’s first rules detailing how oil drillers use hydraulic fracturing, otherwise known as fracking, to crack underground rock formations and free up oil and natural gas.

The bill from Sen. Fran Pavley, D-Agoura Hills, requires drillers to disclose the chemicals used and acquire permits before they use hydraulic fracturing. The process involves injecting water, sand and chemicals into deep rock formations to release oil or natural gas.

Drilling companies have been exploring whether fracking could help them access oil in California's Monterey Shale, estimated to hold 15.4 billion barrels of recoverable oil.

Pavley's bill passed the Legislature last week amid concerns from some conservation groups over last-minute changes affecting environmental reviews. Several groups urged Brown instead to temporarily halt fracking until officials can evaluate whether there are risks to public health.

Environmentalists across the nation have decried the practice, saying that the chemicals used pollute underground water supplies and cause other damage. New York has instituted a moratorium on fracking, and Illinois Gov. Pat Quinn signed a strict set of regulations into law in June.

In his signing statement, Brown, who favors some level of fracking in the Monterey Shale, said he believed more changes would be necessary even as the law goes into effect next year.

"The bill needs some clarifying amendments, and I will work with the author in making those changes next year," he said, although he did not specify what changes he wanted to make.

Other provisions of the legislation, which will take effect in January, will require oil companies to test ground water and notify neighboring landowners before drilling. State officials will have to complete a study by January 2015 evaluating risks of fracking and other well-stimulation techniques, such as using acid to break apart oil-rich rocks.

All California oil wells have been subject to the same regulations, with no specific rules for those using hydraulic fracturing. The Department of Conservation also has been crafting fracking regulations that officials hope to finalize next year.

The oil industry had opposed the measure, saying the new law could make it difficult for California to reap the benefits offered by development of the Monterey shale, including thousands of new jobs, increased tax revenue and higher incomes for residents.

The law "could create conditions that will make it difficult to continue to provide a reliable supply of domestic petroleum energy for California," said Catherine Reheis-Boyd, president of the Western State Petroleum Association, which represents oil companies in California.

Brown also signed a bill from state Sen. Lois Wolk, D-Davis, which will increase the bonding amounts oil and gas drillers must post in case a well is abandoned or an operator is unable to pay for environmental damage. Those amounts have not been adjusted since 1998.

Al Jazeera and wire services