Oil & Gas Related Bills Update for the 2019-2020 Legislative Session

Stoel Rives - California Environmental Law
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Stoel Rives - California Environmental Law

Stoel Rives’ Oil & Gas Team has been monitoring bills introduced by California legislators since the beginning of the 2019-2020 Legislative Session.  Below is the latest update on a list of bills, summarized pursuant to the Legislative Counsel’s Digest, that our team has been following and will continue to monitor as the 2019-2020 Legislative Session proceeds.

Please also see our Renewable + Law post summarizing bills related to other energy topics here.

AB 345 (Muratsuchi, D): Natural Resources: Oil and Gas: Regulation of Operations.

STATUS: Last amended March 18, 2019; currently in Senate Appropriations suspense file.

Would require the Secretary of the Natural Resources Agency to create an environmental justice program within the agency to identify and address any gaps in existing programs, policies, or activities that may impede the achievement of environmental justice. The bill, contingent upon funding for this purpose, would require the secretary to establish a grant-based reimbursement program to enable environmental justice and community groups to meaningfully participate in rulemaking and other regulatory processes at departments and entities within the agency.

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

STATUS: Last amended March 18, 2019; currently in Senate Appropriations suspense file.

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: Facilities and Operations: Monitoring and Reporting.

STATUS: Filed with Chief of Clerk pursuant to Joint Rule 56 on February 3, 2020 (likely dead).

Under current law, the California Geologic Energy Management Division (“CalGEM”) 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 “production facility.” This bill would define the term “sensitive production facility” for those purposes to mean a production facility that is located within certain areas, including, among others, an area containing a building intended for human occupancy that is located within 2,500 feet of the production facility.

AB 1003 (Eggman, D): Oil and Gas: Underground Injection Control Program: Exempt Aquifers.

STATUS: Filed with Chief of Clerk pursuant to Joint Rule 56 on February 3, 2020 (likely dead).

Current law, until March 1, 2019, requires CalGEM 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 1441 (Levin, D): Oil and Gas: Development.

STATUS: Last amended in Senate on January 15, 2020; currently in Senate Rules Committee.

Would revise and recast the duty on the State Oil and Gas Supervisor to supervise the drilling, operation, maintenance, and abandonment of wells so as to permit the owners or operators of the wells to utilize methods and practices known to the oil industry that, in the opinion of the supervisor, are suitable in each proposed case. The bill would revise the declared policy of the state relating to the grant in an oil and gas lease or contract of the right or power to explore for and remove hydrocarbons from any lands in the state. The bill would instead require the supervisor to perform their administrative duties in a manner so as to help ensure the wise oversight of oil and gas development used to meet oil and gas needs in this state.

AB 1738 (Kalra, D): Oil and Gas: Definitions: Idle Well.

STATUS: Died at desk February 3, 2020.

Under current law, CalGEM 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 (Chin, D): Oil and Gas: Underground Injection Control Program: Exempt Aquifers.

STATUS: 2-Year Bill; last amended July 5, 2019; currently in Senate Appropriations, suspense file.

The California Safe Drinking Water Act provides for the operation of public water systems and imposes on the State Water Resources Control Board related responsibilities and duties. Current law authorizes the state board to order consolidation of public water systems where a public water system or state small water system serving a disadvantaged community consistently fails to provide an adequate supply of safe drinking water, as provided. This bill, the Consolidation for Safe Drinking Water Act of 2019, would authorize a water or sewer system corporation to file an application and obtain approval from the commission through an order authorizing the water or sewer system corporation to consolidate with a public water system or state small water system that has fewer than 3,300 service connections and serves a disadvantaged community, or to implement rates for the subsumed water system.

SB 169 (Jackson, D): Oil and Gas: Underground Injection Control Program: Exempt Aquifers.

STATUS: 2-Year bill; currently in the Assembly; no action since January 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: Underground Injection Control Program: Exempt Aquifers.

STATUS: Filed with Chief of Clerk pursuant to Joint Rule 56 on February 3, 2020 (likely dead).

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.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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