February 17, 2017 marked the deadline by which legislators had to introduce bills for the first half of the 2017-2018 Legislative Session.  The Stoel Rives’ Oil & Gas Team has been and will continue to monitor bills throughout the current two-year session and will provide periodic updates as to the status of those bills.  Below is the current status and summary of some of the bills Stoel Rives is monitoring.

Please also reference our Renewable + Law post summarizing bills related to energy law here.

AB 55 (Thurmond, D):  Refineries: turnarounds

STATUS: Introduced December 5, 2016; referred to Committee on Labor & Employment on January 19, 2017

The California Refinery and Chemical Plant Worker Safety Act of 1990 requires every petroleum refinery employer to submit to the Division of Occupational Safety and Health a full schedule for the following calendar year of planned turnaround every September 15th. The employer is also required, upon the request of the division, to provide the division with specified documentation relating to a planned turnaround within a certain period of time. This bill would require the documents to be provided to the division upon request also include all documentation necessary to demonstrate compliance with the above-described skilled and trained workforce requirements.  A violation of the bill’s requirements would be a crime.

AB 476 (Gipson, D):  Vehicular air pollution.

Status:  Introduced February 13, 2017; awaiting referral.

Existing law imposes various limitations on emissions of air contaminants for the control of air pollution from vehicular and non-vehicular sources and generally designates CARB as the state agency with the primary responsibility for the control of vehicular air pollution. Existing law further defines a heavy-duty vehicle as having a manufacturer’s maximum gross vehicle weight rating of 6,001 or more pounds, a light-duty vehicle as having a manufacturer’s gross vehicle weight rating of under 6,001 pounds, and a medium duty vehicle as a heavy-duty vehicle having a manufacturer’s gross vehicle weight rating under a limit established by the state board.  AB 476 instead would define a heavy-duty vehicle as having a manufacturer’s maximum gross vehicle weight rating of 26,001 or more pounds, a light-duty vehicle as having a manufacturer’s gross vehicle weight rating of under 10,001 pounds, and a medium duty vehicle as having a manufacturer’s gross vehicle weight rating of between 10,001 and 26,000 pounds.

AB 1197 (Limón, D):  Oil spill contingency plans:  spill management teams.

STATUS:  Introduced February 17, 2017; awaiting referral.

The Lempert-Keene-Seastrand Oil Spill Prevention and Response Act generally requires the administrator for oil spill response, acting at the direction of the Governor, to implement activities relating to oil spill response, including drills and preparedness, and oil spill containment and cleanup, and to represent the state in any coordinated response efforts with the federal government. The act requires owners or operators of specified facilities and owners or operators of certain vessels to prepare and implement an oil spill contingency plan, containing specified provisions, that has been submitted to, and approved by, the administrator.

This bill would authorize a spill management team (SMT) to apply to the administrator for a classification of that SMT’s response capabilities. AB 1197 would require the administrator to establish levels for classifying a SMT based on a SMT’s capacity to respond to spills and manage spills effectively, review applications for classifications, and classify the SMT, as specified. The bill would authorize the administrator to charge a reasonable administrative fee to process an application for, or renewal of, a classification and would require the administrator to adopt regulations to implement these provisions as appropriate. Further, AB 1197 would require an oil spill contingency plan to identify at least one classified SMT for each classification level established by the administrator.

AB 1472 (Limón, D):  Public lands: oil and gas leases.

STATUS:  Introduced February 17, 2017; awaiting referral.

Existing law vests with the State Lands Commission control over certain public lands and requires the State Lands Commission to promulgate rules and regulations to require any person extracting oil or gas or other minerals from lands under the jurisdiction of the State Lands Commission to remove beach and underwater obstructions.  This bill would instead require that those regulations require any person extracting oil or gas or other minerals from lands under the jurisdiction of the State Lands Commission remove beach, underwater, and any other obstructions deemed necessary by the State Lands Commission.

AB 1647 (Maratsuchi, D):  Petroleum refineries: air monitoring systems.

STATUS:  Introduced February 17, 2017; awaiting referral.

Existing law generally designates air pollution control and air quality management districts with the primary responsibility for the control of air pollution from all sources other than vehicular sources and authorizes CARB or the air district to require the owner or the operator of an air pollution emission source to take any action that CARB or the air district determines to be reasonable for the determination of the amount of air pollution emissions from that source.

AB 1647 would require an air district to require the owner or operator of a petroleum refinery to install a community air monitoring system, as defined, on or before January 1, 2020, and to install a fence-line monitoring system, as defined, on or before January 1, 2019. By adding to the duties of air districts, this bill would impose a state-mandated local program and would require the owner or operator of a refinery to collect real-time data from these monitoring systems, to make that data available to the public at the time of collection in a publicly accessible format, and to maintain records of that data.

SB 44 (Jackson, D):  State lands, coastal hazard and legacy oil and gas well removal and remediation program

STATUS:  Introduced December 5, 2016; referred to the Committee on Natural Resources and Water and the Committee on Environmental Quality on January 12, 2017

Existing law establishes the State Lands Commission (“Commission”) in the Natural Resources Agency and prescribes the functions and duties of the Commission. Under existing law, the Commission has jurisdiction over various state lands, including coastal lands.  Further, existing law, with specified exceptions, generally requires the Commission, on and after July 1, 2006, to deposit all revenue, money, and remittances, derived from mineral extraction leases on state tide and submerged lands, including tideland oil revenue, into the General Fund, to be available upon appropriation by the Legislature for specified purposes and established the Land Bank Fund, a continuously appropriated fund, from which the Commission may expend moneys for management and improvement of real property held by the commission, as trustee, to provide open space, habitat for plants and animals, and public access.  This bill would:

  • upon appropriation of moneys by the Legislature, require the Commission to, within 2 years, administer a coastal hazard and legacy oil and gas well removal and remediation program, as specified;
  • authorize the Commission to seek and accept on behalf of the state any gift, bequest, devise, or donation whenever the gift and the terms and conditions thereof will aid in actions undertaken to administer that program;
  • require the Commission to annually report to the Legislature the activities and accomplishments of the program;
  • require that, for the 2018–19 fiscal year, out of those funds deposited into the General Fund by the Commission, the sum of $2,000,000 be transferred to the Land Bank Fund and be available, upon appropriation in the annual Budget Act, for the purpose of implementing the coastal hazard and legacy oil and gas well removal and remediation program; and,
  • require that, commencing with the 2019–20 fiscal year and each fiscal year thereafter, an amount sufficient to bring the unencumbered balance of the Land Bank Fund available for the purpose of implementing the program to $2,000,000 be transferred to that fund and be available, upon an appropriation in the annual Budget Act, for the purpose of implementing the program.

SB 57 (Stern & Hertzberg, D):  Natural gas storage: moratorium

STATUS:  Introduced December 8, 2016; amended February 14, 2017; awaiting referral.

Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation (“DOGGR”) regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state and requires the State Oil and Gas Supervisor (“Supervisor”) to continue the prohibition against Southern California Gas Company injecting any natural gas into the Aliso Canyon natural gas storage facility located in the County of Los Angeles until a comprehensive review of the safety of the gas storage wells at the facility is completed, as specified, the Supervisor determines that well integrity has been ensured by the review, the risks of failures identified in the review have been addressed, the Supervisor’s duty to prevent damage to life, health, property, and natural resources, and other requirements is satisfied, and the Executive Director of the CPUC has concurred via letter with the supervisor regarding his or her determination of safety.  In addition, current law requires the CPUC, by no later than July 1, 2017, to open a proceeding to determine the feasibility of minimizing or eliminating use of the Aliso Canyon natural gas storage facility located in the County of Los Angeles while still maintaining energy and electric reliability for the region, and to consult with specified entities in making its determination.  This bill would require:

  • the Supervisor to continue that prohibition until a specified root cause analysis of the natural gas leak from the facility that started approximately October 23, 2015, has been completed and released in its entirety to the public; and,
  • the proceeding to be completed by December 31, 2017.

SB 146 (Stern, D):  Natural gas storage: moratorium

STATUS:  Introduced January 17, 2017; referred to the Committee on Natural Resources and Water and the Committee on Energy, Utilities, and Communications on January 26, 2017

Current law requires the Supervisor  to continue the prohibition against Southern California Gas Company injecting any natural gas into the Aliso Canyon natural gas storage facility located in the County of Los Angeles until a comprehensive review of the safety of the gas storage wells at the facility is completed, as specified, the Supervisor determines that well integrity has been ensured by the review, the risks of failures identified in the review have been addressed, the supervisor’s duty to prevent damage to life, health, property, and natural resources, and other requirements is satisfied, and the Executive Director of the CPUC has concurred via letter with the supervisor regarding his or her determination of safety. This bill would:

  • be effective immediately upon the Governor’s approval (as an urgency statute);
  • require the Supervisor to continue that prohibition until a specified root cause analysis of the natural gas leak from the facility that started approximately October 23, 2015, has been completed and released in its entirety to the public; and,
  • require a proceeding to determine the feasibility of minimizing or eliminating the use of Aliso Canyon natural storage facility to be completed by December 31, 2017.

SB 385 (Hueso, D): Natural gas storage wells.

STATUS:  Introduced February 15, 2017; awaiting referral.

Current law requires, if a new underground gas storage facility is proposed, the CPUC to ensure that a risk assessment evaluating the potential impact of a leak from the facility on public and environmental health, safety, and welfare is conducted by the project proponent, as specified. Current law requires that the findings of any risk assessment conducted pursuant to these provisions be subjected to peer review by independent experts and reported to the Legislature, as specified. This bill would move the requirement that the report be submitted to the Legislature to a part of the code where commission reports to the Legislature are listed.

SB 709 (Wiener, D):  Oil spill response and contingency planning.

STATUS:  Introduced February 17, 2017; awaiting referral.

The Lempert-Keene-Seastrand Oil Spill Prevention and Response Act generally requires the administrator for oil spill response, acting at the direction of the Governor, to implement activities relating to oil spill response, including emergency drills and preparedness, and oil spill containment and cleanup, and to represent the state in any coordinated response efforts with the federal government.  Existing law further requires the administrator to adopt and implement regulations governing the adequacy of oil spill contingency plans to be prepared and implemented and requires the regulations to provide for the best achievable protection of coastal and marine waters and requires an owner or operator of a facility, small marine fueling facility, or mobile transfer unit, or an owner or operator of a tank vessel, non-tank vessel, or vessel carrying oil as secondary cargo, while operating in the waters of the state or where a spill could impact waters of the state, to have an oil spill contingency plan that complies with the rules, regulations, and policies established by the administrator, that meets specified minimum requirements, and that has been submitted to, and approved by, the administrator.  Finally, current law authorizes an oil spill response organization (“OSRO”) to apply to the administrator for a rating of that OSRO’s response capabilities.  Upon receiving a completed application for rating, the administrator is required to review the application and rate the OSRO based on the OSRO’s satisfactory compliance with criteria established by the administrator, including specified elements.  SB 709 would:

  • if non-floating oil, such as tar sand, is present, require that the oil spill contingency plan that is filed with and approved by the OSRO capable of oil spill response activities related to that non-floating oil;
  • additionally require the oil spill contingency plan to describe procedures, techniques, and demonstrated technologies effective for responding to a spill of the non-floating oil;
  • require that those elements include the type of oil, including non-floating oils, such as tar sands, the OSRO is capable of recovering and containing; and,
  • require that certain regulations adopted by the administrator be consistent with the 2016 United States Coast Guard OSRO classification program.

SB 724 (Lara, D):  Oil and gas:  wells and production facilities.

STATUS:  Introduced February 17, 2017; awaiting referral.

Under current law, DOGGR regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state.  State law further requires the Supervisor to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field, so as to prevent damage to life, health, property, and natural resources, as provided; to permit owners and operators of wells to utilize all known methods and practices to increase the ultimate recovery of hydrocarbons; and to perform the supervisor’s duties in a manner that encourages the wise development of oil and gas resources to best meet oil and gas needs in this state.  A person who fails to comply with an order issued under these provisions and other requirements relating to the regulation of oil or gas operations is guilty of a misdemeanor.  Moreover, existing law requires the operator of a well to file a written notice of intention to commence drilling with, and prohibits any drilling until approval is given by, the supervisor or district deputy; the notice is deemed approved if the supervisor or district deputy fails to respond to the notice in writing within 10 working days from receipt and is deemed canceled if operations have not commenced within one year of receipt.  This bill would extend the time period to commence operations from one year to 24 months before the notice is required to be deemed canceled, and would prohibit the notice from being extended.

Existing law authorizes a city or county to request from the supervisor a list of those wells within its jurisdiction that have not continuously produced oil or natural gas, or have not been utilized continuously for injection purposes for a 6-month period during any consecutive 10-year period prior to or after January 1, 1991.  This bill instead would authorize a city or county to request from the supervisor a list of all idle wells, as defined, within its jurisdiction.

Current law authorizes the supervisor or district deputy to order the plugging and abandonment of a well that has been deserted whether or not any damage is occurring or threatened by reason of that deserted well.  This bill would additionally authorize the supervisor or district deputy to order the decommissioning of an attendant production facility of a well that has been deserted. Because a violation of an order issued under these provisions would be a crime, the bill would impose a state-imposed local program.

Existing law authorizes the supervisor to order certain operations to be carried out on any property in the vicinity of which, or on which, is located any well that the supervisor determines to be either a hazardous or idle-deserted well, as specified. Existing law prohibits the division from expending, commencing with the 2015–16 fiscal year, more than $1,000,000 in any one fiscal year for these purposes related to hazardous or idle-deserted wells.  SB 724 would:

  • expand this authorization to allow the supervisor to order or undertake certain operations, as applicable, to be carried out on any property in the vicinity of which, or on which, is located any well or facility that the supervisor determines to be a hazardous well, an idle-deserted well, a hazardous facility, or a deserted facility, as defined.;
  • raise the cap on spending for these purposes from $1,000,000 to $5,000,000 in any one fiscal year;
  • require the division to provide certain information regarding those wells and facilities to cities and counties upon request;
  • authorize a city or county to apply to the division to enter into a contract with the division to either receive funds to reimburse a city or county for its costs related to plugging and abandoning a well and decommissioning production facilities, or for the division to conduct work related to plugging and abandoning a well and decommissioning production facilities, as specified;
  • prohibit the division, on or after July 1, 2018, from commencing any activity to plug and abandon a well or decommission a production facility within the jurisdiction of a city or county without entering into a contractual memorandum of understanding with the city or county, except as provided;
  • require the department to report on October 1, 2019, to the Legislature on the estimated number of orphan wells, hazardous wells, idle-deserted wells, deserted facilities, and hazardous facilities remaining, the estimated costs of abandoning or decommissioning those wells and facilities, and a timeline for future well abandonment and decommissioning of facilities with a specific schedule of goals; and,
  • require the department to provide the Legislature with an update to this report on October 1, 2022, containing specified information.

SB 773 (Stern, D): Oil and gas: well records.

STATUS:  Introduced February 17, 2017; awaiting referral.

Existing law requires DOGGR to regulate the drilling and operation of wells used for the purpose of producing oil and gas and requires an owner or operator of a well to keep, or cause to be kept, a careful and accurate log, core record, and history of the drilling of the well. Under existing law, a person who fails to comply with this and other requirements relating to the regulation of oil or gas operations is guilty of a misdemeanor.  SB 773 would provide that it is the policy of the state that information sufficient to competently and completely characterize each well, including after plugging and abandonment, be maintained by the state and would require the Supervisor to ensure compliance with this policy.