(CN) – A Central California oilfield expansion project approved by the federal government failed to consider the impact to the environment, wildlife or drinking water, according to a federal lawsuit filed on Thursday.

The Center for Biological Diversity says state and federal regulators did not consider the environmental impact of over 400 new oil wells at the project site in San Luis Obispo County, a violation of the National Environmental Policy Act and Endangered Species Act.

An aquifer at the location would become host to oil-waste fluid from the operation, according to the lawsuit filed in federal court in San Francisco. The operators of the Arroyo Grande oilfield seek to more than double the number of wells to the site that already has 400 wells, which uses water-injection methods to extract oil.

In 2016, the Division of Oil, Gas and Geothermal Resources (DOGGR) with the state of California submitted a proposed aquifer exemption to the Environmental Protection Agency. In April 2019, the EPA approved the request, finding the oil field didn’t serve as a source of drinking water.

In their complaint, the environmental group says the site is home to rare and unique wildlife species, including the rare native annual herb Pismo clarkia, South-Central California Coast steelhead trout, and California red-legged frog.

The semi-rural area is located about halfway between Pismo Beach and San Luis Obispo and the aquifer site is located under rolling hills, vineyards and residents who live in the area, according to the complaint.

Previously, the environmental group sued DOGGR and the California State Water Resources Control Board for violating the state’s Environmental Quality Act because the agencies did not conduct a review on how the expansion would impact the area. But a Superior Court judge said those agencies didn’t have final approval which rested with the EPA.

Center for Biological Diversity attorney Lauren Packard said the lawsuit wants to hold the EPA accountable to the “bedrock environmental laws” that they should have followed. That includes consulting with the U.S. Fish and Wildlife Service.

Packard says the EPA hasn’t done its job with a proper analysis on how dangerous injection wells would impact the area.

“Oil waste can contain benzene and other cancer-causing chemicals that threaten water supplies and wildlife. Our environmental laws are supposed to prevent this kind of destruction, and we’re going to court make sure they’re enforced,” Packard said.

Residents who live near the Arroyo Grande Oil Field depend on well water for drinking, cooking and other domestic uses. The concern now is that operations at the site could contaminate the aquifer.

The oilfield’s operators Sentinel Peak Resources previously purchased the site from Freeport-McMoRan who initially submitted the proposed expansion.

In a statement, oil trade group California Independent Petroleum Association called the lawsuit “frivolous.”

“It is a shame that Center for Biological Diversity feels it must counter the sound science of the federal EPA and two separate state agencies who have deemed this aquifer exemption to be appropriate,” said group’s CEO Rock Zierman.

“The Arroyo Grande oilfield will continue to responsibly operate” as it has since before the Center for Biological Diversity filed its first suit in 2016, Zierman said.

This week, California issued a moratorium on any new oil and fracking permits until further environmental reviews could be completed. The moratorium places a hold on new permits for high-pressure steam drilling, which have been linked to several major oil spills in the region earlier this year.

Gov. Gavin Newsom also asked for regulators to convene with environmental groups and public health advocates to reshape rules meant to protect communities from nearby oil drilling operations.

Packard says the moratorium does not extend to aquifer exemptions, but it’s still the EPA’s responsibility to evaluate the potential impacts on endangered plants, animals and the environment.

This summer, Chevron spilled 800,000 gallons of oil in Kern County, which seeped into a dry creek bed near Bakersfield which was considered one of the largest spills in recent decades.

The EPA did not respond to an email for comment.