Stoel Rives’ Oil & Gas Team has been monitoring bills introduced by California legislators since the beginning of the 2017-2018 legislative session.  Below are the latest updates on the bills our team has been following during the first half of the current legislative session.  In addition, we have included new bills introduced during the second half of the current legislative session.

The following is a list of bills either vetoed by the Governor or chaptered into law at the end of the first half of the current legislative session.  A summary of such bills can be found here.

• AB 1197 (Limón, D): Oil spill contingency plans: spill management teams. Chaptered into law on October 8, 2017.
• AB 1328 (Limón, D): Oil and gas: water quality. Chaptered into law on October 13, 2017.
• AB 1472 (Limón, D): Public lands: assignments and transfers; oil, gas and mineral leases. Vetoed by the Governor on July 25, 2017.
• AB 1647 (Muratsuchi, D): Petroleum refineries: air monitoring systems. Chaptered into law on October 8, 2017.
• SB 44 (Jackson, D): State lands: coastal hazard and legacy oil and gas well removal and remediation program. Chaptered into law on October 8, 2017.
• SB 724 (Lara, D): Oil and gas: wells and production facilities. Chaptered into law on October 10, 2017.

In addition to the above, Stoel Rives’ Oil & Gas Team followed a number of bills that have been identified by the legislature as “dead.”  While we do not anticipate any further activity on these bills, we will continue to monitor them just in case they come back to life.  Those bills are as follows:

• AB 476 (Gipson, D): Vehicular air pollution. As of January 13, 2018, this bill has been identified as “dead” by the legislature.
• SB 57 (Stern & Hertzberg, D): Natural gas storage: moratorium. As of February 1, 2018, this bill has been identified as “dead” by the legislature.
• SB 637 (Hill, D): Public Utilities Commission: gas corporations: electrical corporations: safety. As of January 20, 2018, this bill has been identified as “dead” by the legislature.
• SB 709 (Wiener, D): Oil spill response and contingency planning. As of January 20, 2018, this bill has been identified as “dead” by the legislature.

The bills listed below are those bills that were identified as two-year bills or were introduced during the second half of the current legislative session.  We present the Legislative Counsel’s Digest summary of each bill below.

AB 1775 and SB 834 have each been introduced in the second half of the current legislative session.  The bills nearly mirror each other and have been summarized by the Legislative Counsel identically.  We present the summary below collectively; however, should either bill be revised, we will separate the bills’ summaries in future posts.

AB 1775 (Muratsuchi, D) and SB 834 (Jackson, D): State lands: leasing: oil and gas.

Status: Each bill was introduced January 4, 2018 and each has been referred to committee.

Existing law vests exclusive jurisdiction over ungranted tidelands and submerged lands owned by the state to the State Lands Commission.  Existing law confers the powers of the SLC as to leasing or granting of rights or privileges to lands owned by the state upon a local trustee of granted public trust lands to which those lands have been granted.  Existing law authorizes the SLC to let leases for the extraction of oil and gas from coastal tidelands or submerged lands in state waters and beds of navigable rivers and lakes within the state in accordance with specified provisions of law.  In addition, notwithstanding those provisions or any other provision of law, existing law prohibits a state agency or state officer from entering into any new lease for the extraction of oil or gas from the California Coastal Sanctuary, which includes certain state waters subject to tidal influence, unless either (1) the President of the United States has found a severe energy supply interruption and has ordered distribution of the Strategic Petroleum Reserve, the Governor finds that the energy resources of the sanctuary will contribute significantly to the alleviation of that interruption, and the Legislature subsequently acts to amend the law to allow the extraction, or (2) the SLC determines that the oil or gas deposits are being drained by means of producing wells upon adjacent federal lands and the lease is in the best interest of the state.  This bill would:

• prohibit the SLC and the local trustees of granted public trust lands from entering into any new lease or other conveyance or from entering into any lease renewal, extension, or modification that authorizes a lessee to engage in new or additional exploration, development, or production of oil or natural gas upon lands owned by the state and under the jurisdiction of the SLC that are located seaward of the ordinary high water mark for tidal waterways and the ordinary low water mark for navigable nontidal waterways that would result in the increase of oil or natural gas production from federal waters;
• apply the exceptions applicable to the California Coastal Sanctuary to these provisions; and
• authorize the SLC to establish guidelines for the implementation of these pro

SB 188 (Jackson, D): State lands: leasing: oil and gas.

STATUS: Amended in Assembly and referred to Assembly Appropriations July 13, 2017.

Existing law vests exclusive jurisdiction over ungranted tidelands and submerged lands owned by the state to the State Lands Commission.  Existing law confers the powers of the SLC as to leasing or granting of rights or privileges to lands owned by the state upon a local trustee of granted public trust lands to which those lands have been granted.  Existing law authorizes the SLC to let leases for the extraction of oil and gas from coastal tidelands or submerged lands in state waters and beds of navigable rivers and lakes within the state in accordance with specified provisions of law.  Further, existing law, notwithstanding those provisions or any other provision of law, prohibits a state agency or state officer from entering into any new lease for the extraction of oil or gas from the California Coastal Sanctuary, which includes certain state waters subject to tidal influence, unless either (1) the President of the United States has found a severe energy supply interruption and has ordered distribution of the Strategic Petroleum Reserve, the Governor finds that the energy resources of the sanctuary will contribute significantly to the alleviation of that interruption, and the Legislature subsequently acts to amend the law to allow the extraction, or (2) the SLC determines that the oil or gas deposits are being drained by means of producing wells upon adjacent federal lands and the lease is in the best interest of the state.

This bill would:

• prohibit the SLC and the local trustees of granted public trust lands from entering into any new lease or other conveyance or from entering into any lease renewal, extension, or modification that authorizes a lessee to engage in new or additional exploration, development, or production of oil or natural gas upon lands owned by the state and under the jurisdiction of the SLC that are located seaward of the ordinary high water mark for tidal waterways and the ordinary low water mark for navigable non-tidal waterways that would result in the increase of oil or natural gas production from federal waters;
• apply the exceptions applicable to the California Coastal Sanctuary to these provisions; and,
• authorize the SLC to establish guidelines for the implementation of these provisions.

SB 465 (Jackson, D): Oil and gas conservation.

STATUS: Amended in the Assembly and referred to Assembly Appropriations July 13, 2017.  This bill was sent to the INACTIVE file on September 11, 2017.

Under existing law, DOGGR regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state.  Existing law 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 the state.  Furthermore, existing law defines, among other things, “active observation well,” “idle well,” and “long-term idle well” for the purposes of provisions relating to the regulation of oil and gas.  Finally, existing law recognizes the Conservation Committee of California Oil and Gas Producers and authorizes it or any other committee of oil producers to make voluntary recommendations to the Supervisor regarding, among other things, maximum efficient rates of production, as defined, if specified conditions are satisfied.  SB 465 would:

• require that the Supervisor perform his or her duties in a manner so as to encourage the intelligent, safe, and efficient development of oil and gas resources;
• require the Supervisor to regulate instead of supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production, as provided;
• narrow the definitions of “idle well” and “long-term idle well” by excluding active observation wells from those definitions;
• repeal those provisions authorizing the Conservation Committee of California Oil and Gas Producers or any other committee of oil producers to make voluntary recommendations to the Supervisor regarding, among other things, maximum efficient rates of production, as defined, if specified conditions are satisfied and instead require the Supervisor to establish the Standing Advisory Council on Oil and Gas Extraction, composed of specified members; and
• authorize the Supervisor to request the council to provide recommendations to support decisions on the regulation of oil and gas development.

The Legislature is scheduled to be on spring recess beginning March 22 and will reconvene on April 2.  Thereafter, the next deadline impacting active bills is June 1, at which time bills introduced this session must pass out of their house of origin.  The Stoel Rives Oil & Gas Team will continue to monitor activities at the legislature and will provide updates to these and other bills throughout the current legislative session.