The 2019-2020 California Legislative Session has officially reached its first deadline. February 22, 2019 marked the deadline by which bills could be introduced for the first half of the Session. Lawmakers will begin Spring Recess April 12 and reconvene April 22. The last day for bills to be passed out of the house of origin is May 31, 2019.

Below is a list of some of the key bills Stoel Rives’ Oil & Gas Team will be monitoring throughout the Legislative Session.

AB 255 (Limòn, D) and SB 834 (Jackson, D): State lands: leasing: oil and gas.

Status: Introduced January 23, 2019; referred to Committee on Natural Resources February 7, 2019.

The Lempert-Keene-Seastrand Oil Spill Prevention and Response Act authorizes the administrator for oil spill response to offer grants to a local government with jurisdiction over or directly adjacent to waters of the state to provide oil spill response equipment to be deployed by a certified local spill response manager, as provided. This bill would provide that Native American tribes and other public entities are also eligible to receive those grants.

AB 353 (Muratsuchi, D): Oil and gas: Definitions: additive.

Status: Introduced February 4, 2019; awaiting referral.

Under current law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Current law defines various terms for those purposes, including “additive.” This bill would make a non-substantive change to that definition.AB 585 (Limón, D): Public lands: assignments and transfers: oil, gas, and mineral leases.

Status: Introduced February 14, 2019; referred to Committee on Natural Resources February 25, 2019.

Current law authorizes, with respect to oil, gas, and mineral leases, the assignment, transfer, or sublet as to all or any part of certain leased or permitted lands, as prescribed, subject to approval by the State Lands Commission, to any person, association of persons, or corporation, which at the time of the proposed assignment, transfer, or sublease, possesses certain qualifications. This bill would authorize the commission, in considering an approval of an assignment, transfer, or sublease of a lease or permit under those provisions, to consider whether the proposed assignee, as defined, is likely to comply with the terms of the assigned lease or permit for the duration of both the primary term of the original lease or permit and any extended term of the lease because of production, as determined by specified factors.

AB 926 (O’Donnell, D): Oil revenue: Oil Trust Fund.

Status: Introduced February 20, 2019; awaiting referral.

Current law requires the Controller to transfer certain oil-revenue-related moneys to the Oil Trust Fund. Current law requires the State Lands Commission to expend the money in the fund to finance the costs of well abandonment, pipeline removal, facility removal, remediation, and other costs associated with removal of oil and gas facilities from the Long Beach tidelands. Current law prohibits the total amount deposited in the fund from exceeding $300,000,000 and requires all interest earned on money in the fund after the balance in the fund totals $300,000,000 to be transferred to the General Fund. This bill would delete the provisions relating to the limit on the total amount deposited in the fund. By increasing the amount of money that may be deposited into a continuously appropriated fund, this bill would make an appropriation.

AB 935 (Rivas, D): Oil and gas: operations: monitoring and reporting.

Status: Introduced February 20, 2019; awaiting referral.

Would express the intent of the Legislature to enact subsequent legislation that would ensure the public health and safety of all communities, especially economically disadvantaged communities, and that would ensure that these communities are not disproportionately impacted by the drilling, operation, maintenance, or abandonment of oil and gas wells in California by ensuring adherence to the highest standards of safety, technology, and practice, including, but not limited to, the continuous monitoring of oil and gas operations and public reporting of that data.

AB 936 (Rivas, D): Oil spills: response and contingency planning.

Status: Introduced February 20, 2019; awaiting referral.

Would define “non-floating oil” for purposes of the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act. The bill would require the administrator for oil spill response to complete on or before January 1, 2022, an independent scientific study to determine the best available means of addressing non-floating oil spills and to develop a set of findings defining the elements of state-of-the-art response capability to non-floating oil spills. The bill would require the administrator to include in the revision to the California oil spill contingency plan due on or before January 1, 2023, an evaluation of non-floating oil taking into consideration the results of the study.

AB 1003 (Eggman, D): Oil and gas: Underground Injection Control Program: exempt aquifers.

Status: Introduced February 21, 2019; awaiting referral.

Current law, until March 1, 2019, requires the Division of Oil, Gas, and Geothermal Resources to notify the relevant policy committees of the Legislature before submitting a proposal for an exempted aquifer determination to the United States Environmental Protection Agency. Commencing January 1, 2020, and until March 1, 2020, this bill would require the division to notify the relevant policy committees of the Legislature before submitting a proposal for an exempted aquifer determination to the United States Environmental Protection Agency.

AB 1057 (Limón, D): Oil and gas: wells and facilities: indemnity bonds and remediation.

Status: Introduced February 21, 2019; awaiting referral.

Current law authorizes an operator who engages in the drilling, redrilling, deepening, or any operation permanently altering the casing, of 20 or more wells at any time, to file with the State Oil and Gas Supervisor one blanket indemnity bond to cover all the operations in any of its wells in the state, in a specified amount depending on the total number of wells in the state, in lieu of the above-described requirement for an individual indemnity bond for each operation. Current law provides that a person who fails to comply with these and other specific laws relating to the regulation of oil or gas operations is guilty of a misdemeanor. This bill would double the amounts specified for individual and blanket indemnity bonds under those provisions.

AB 1328 (Holden, D): Oil and gas: well records and testing requirements for idle wells, hazardous or idle-deserted wells, and hazardous or deserted facilities.    

Status: Introduced February 22, 2019; awaiting referral.

Existing law requires the State Oil and Gas Supervisor to supervise the drilling, operation, maintenance, and abandonment of oil and gas wells. Existing law requires an owner or operator of a well to keep, or cause to be kept, and requires the operator to file with the district deputy at specified times, a careful and accurate log, core record, and history of the drilling of the well. This bill would require the owner or operator to keep, or cause to be kept, a history of the maintenance and repair of the well.

AB 1440 (Levine, D): State-owned lands: oil and gas production.

Status: Introduced February 22, 2019; awaiting referral.

Current law establishes a finding and determination by the Legislature that the people of the State of California have a direct and primary interest in ensuring the production of the optimum quantities of oil and gas from lands owned by the state, and that a minimum of oil and gas be left wasted and unrecovered in such lands. This bill would delete this finding and determination by the Legislature from these provisions.

AB 1441 (Levine, D): Oil and gas: operations: permit and notice requirements.

Status: Introduced February 22, 2019; awaiting referral.

Current law requires the State Oil and Gas 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. This bill would revise and recast the duty on the supervisor to supervise the drilling, operation, maintenance, and abandonment of wells so as to permit the owners or operators of the wells to utilize all methods and practices known to the oil industry that, in the opinion of the supervisor, are suitable in each proposed case. The bill would no longer require the supervisor to perform their duties in a manner that encourages the wise development of oil and gas resources to best meet oil and gas needs in this state.

AB 1738 (Kalra, D): Oil and gas: definitions: idle well.

Status: Introduced February 22, 2019; awaiting referral.

Under current law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Current law defines various terms for those purposes, including “idle well.” This bill would make non-substantive changes to that definition.

AB 1751 (Chiu, D): Oil and gas: definitions: additive.

Status: Introduced February 22, 2019; awaiting referral.

Under current law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Current law defines various terms for those purposes, including “additive.” This bill would make a non-substantive change to that definition.

SB 169 (Jackson, D): Pipeline safety: records.

Status: Introduced January 28, 2019; referred to Committee on GO February 6, 2019.

The Elder California Pipeline Safety Act of 1981 requires the State Fire Marshal to administer provisions regulating the inspection of intrastate pipelines that transport hazardous liquids. The act requires a pipeline operator to make available to the State Fire Marshal, or any officers or employees authorized by the State Fire Marshal, upon presentation of appropriate credentials, any records, maps, or written procedures that are required by the act to be kept by the pipeline operator and which concern accident reporting, design, construction, testing, or operation and maintenance. This bill would revise and recast specified provisions and would authorize the State Fire Marshal, for purposes of carrying out the requirements of state or federal law relating to hazardous liquid pipeline safety, to require the owner or operator of a pipeline to establish and maintain records, make reports, and provide any information that the State Fire Marshal reasonably requires, as provided.

SB 246 (Wieckowski, D): Oil and gas severance tax.

Status: Introduced February 11, 2019; awaiting referral.

Current law imposes various taxes, including taxes on the privilege of engaging in certain activities. The Fee Collection Procedures Law, the violation of which is a crime, provides procedures for the collection of certain fees and surcharges. This bill would impose an oil and gas severance tax upon any operator for the privilege of severing oil or gas from the earth or water in this state at specified rates, calculated as provided.

SB 457 (Hueso, D): Biomethane: gas corporations.

Status: Introduced February 21, 2019; awaiting referral.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including gas corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. Existing law requires the commission to adopt policies and programs that promote the in-state production and distribution of biomethane, as defined, and that facilitate the development of a variety of sources of in-state biomethane. This bill would require the Public Utilities Commission to extend the program until December 31, 2026. This bill contains other related provisions and other existing laws.

SB 463 (Stern, D): Natural gas storage wells: monitoring and reporting.

Status: Introduced February 21, 2019; awaiting referral.

This bill would require the operator of a gas storage well to (A) include in its risk management plan a complete chemical inventory of the materials, of any phase, used on or in the gas storage wells for any purpose, (B) regularly quantify and report to the division the chemical composition of the gas, including trace impurities, stored in the gas storage well, based on a representative number of wells sampled, and (C) develop and implement a plan to, in the event of a leak, monitor emissions from the gas storage well and related equipment that is capable of quantifying the chemical composition of gas, and any suspended materials, released to the environment. Because a violation of these requirements would be a crime, the bill would impose a state-mandated local program. This bill contains other related provisions and other existing laws.

SB 551 (Jackson, D): Oil and gas: decommissioning, cleanup, and remediation: costs.

Status: Introduced February 22, 2019; awaiting referral.

Under current law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. This bill would require the division to develop a mechanism to assess the full cost of decommissioning, cleanup, and remediation of infrastructure related to the oil and gas industry, including pipeline facilities, pump facilities, and storage facilities.