Status of Oil and Gas-related Bills Proposed in California’s 2015-2016 Legislative Session

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February 27, 2015 was the deadline for lawmakers to introduce legislation to the 2015-2016 California Legislative Session and several bills related to oil and gas activities were introduced.  Below is a summary of those bills. Stoel Rives is monitoring these bills and will provide periodic updates as the bills move through the legislative process.

SENATE BILLS

SB-13 (Pavley):  Groundwater

This bill would specify that the State Water Resources Control Board is authorized to designate a high- or medium-priority basin as a probationary basin. This bill would provide a local agency or groundwater sustainability agency 90 or 180 days, as prescribed, to remedy certain deficiencies that caused the board to designate the basin as a probationary basin. This bill would authorize the State Water Resources Control Board to develop an interim plan for certain probationary basins one year after the designation of the basin as a probationary basin.

In addition, if the Department of Water Resources (“DWR”) determines that all or part of a basin or subbasin is not being monitored, this bill would require DWR to determine whether there is sufficient interest in establishing a groundwater sustainability plan.

Finally, this bill would eliminate the provisions requiring a local agency or combination of local agencies that elect to be a groundwater sustainability agency for a basin to submit a prescribed notice of intent to DWR.

SB-20 (Pavley):  Wells: reports: public availability

This bill would require DWR to, upon request, make the reports of completion filed by anyone who digs, bores, or drills a water well, cathodic protection well, or a monitoring well, or abandons or destroys a well, or deepens or reperforates a well available to the public. The bill would further require the DWR to provide specified disclaimers when providing such reports to the public. The bill would authorize the department to charge a fee for the provision of a report to recover the costs that does not exceed the reasonable costs to the department of providing the report. The bill would require the release of a report to comply with the Information Practices Act of 1977 and would require DWR to redact from the report specified information pertaining to the well owner. The bill would require a person who requests a report to provide his or her name, address, identification number from a government-issued source, as provided, and reason for making the request.

SB-32 (Pavley):  California Global Warming Solutions Act of 2006: emissions limit

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020 and to adopt rules and regulations in an open public process to achieve the maximum, technologically feasible, and cost-effective greenhouse gas emissions reductions.

This bill would require the State Air Resources Board to approve a statewide greenhouse gas emission limit that is equivalent to 80% below the 1990 level to be achieved by 2050, as specified. The bill would authorize the State Air Resources Board to adopt interim greenhouse gas emissions level targets to be achieved by 2030 and 2040, and would state the intent of the Legislature for the Legislature and appropriate agencies to adopt complementary policies that ensure long-term emissions reductions advance specified criteria.

SB-209 (Pavley):  Surface mining: inspections: training

This bill would require the Department of Conservation, by no later than January 1, 2018, and on an ongoing basis thereafter, to offer continuing educational opportunities for lead agency employees to become certified by the department to inspect surface mining operations; and, prohibit a lead agency that operates a surface mining operation from having an inspection performed by a lead agency employee unless that employee has become certified as a surface mining operation inspector within the previous two years.

SB-248 (Pavley):  Oil and gas: well history

This bill would require all operations on or in the well of any form to be systematically, completely, and accurately described and recorded in the well history.   A violation of this requirement would be a crime.

SB-545 (Jackson): Oil and gas operations

SB-545 would require the State Oil and Gas Supervisor (“Supervisor”) to authorize the exploration and production of hydrocarbons, including, among other things, the drilling, operation, maintenance, and abandonment of wells, and the use of enhanced oil recovery methods, and authorize the Supervisor to allow an owner or operator of a well to utilize all known methods and practices to increase the ultimate recovery of hydrocarbons if the Supervisor finds that those methods and practices are consistent with existing law.

The bill would require an owner or operator of a well to file an application for approval to commence drilling, containing specified information, and would prohibit any drilling until written approval is given by the Supervisor or the district deputy containing specified findings.  The bill would authorize the Supervisor, upon request, to grant a one-year extension if operations have not commenced within one year of the approval.  In addition, SB-545 would require the Supervisor to perform his or her duties in conformance with the Permit Streamlining Act.

Further, the bill would limit the authorization to maintain the confidentiality of well records to exploratory wells and only if the owner or operator includes specified information in the written request. The bill would deem the request for, and the granting of, confidential well status to be public records and would require that information to be accessible on the Division of Oil, Gas, and Geothermal Resources (“Division’s”) Internet Web site. The bill would require all well records of a confidential well, as defined, to be posted on the Division’s Internet Web site once the confidential well period has ended and would require that the confidential period for an offshore well not exceed three years from the cessation of drilling operations.  The bill would authorize the Supervisor to extend the period of confidentiality for confidential wells for only six months, upon receiving a written request documenting extenuating circumstances.

This bill would require an owner or operator of a well to report specified information to the applicable regional water quality control board within five days of any loss of well and well casing integrity. A violation of this particular requirement would be a crime.

Finally, SB-545 would authorize any committee of oil producers to make recommendations to the Supervisor regarding oil and gas exploration and production, as specified, and would require the Division to post any recommendations received by the Supervisor on the Division’s Internet Web site.

ASSEMBLY BILLS

AB-356 (Williams):  Oil and gas: groundwater monitoring

This bill would authorize the Supervisor to require a well operator to implement a monitoring program for belowground oil production tanks and facilities, and disposal and injection wells. Failure to comply with this requirement would be a crime.

In addition, this bill would require an operator of a Class II injection well, as a part of its application or notice of change process, to submit to an appropriate regional water quality control board a groundwater monitoring plan containing certain information, including, among other things, a schedule for monitoring and reporting groundwater quality data. Moreover, the bill would require the data be submitted to the State Water Resources Control Board for inclusion in the state board’s geotracker database. The bill would require the regional water quality control board to review and approve the plan. A violation of this requirement would be a crime.  Read more about this bill here.

AB-815 (Ridley-Thomas):  Oil spill prevention and response fees: collection

AB-815 would authorize a marine terminal operator or a refinery operator receiving petroleum products derived from crude oil refined in the state to presume the oil spill prevention and administration fee has been previously collected. The bill would also no longer require the owner of the crude oil or petroleum products to remit the fee to the board and would make conforming changes.

In addition, the bill would state the intent of the Legislature that the State Board of Equalization collects the oil spill prevention and administration fee only upon first delivery to a refinery or marine terminal and not upon subsequent movement of that same crude oil or petroleum products derived after that first delivery.

Finally, this bill would require every person who operates a refinery in this state, a marine terminal in waters of the state, or operates a pipeline to transport crude oil out of the state or petroleum products into the state to register with the board for the purposes of the oil spill prevention and administration fee and the uniform oil spill response fee, as applicable. The bill would delete the defined term oil, and would define barrel to mean 42 gallons of crude oil or petroleum products for these purposes.

AB-1034 (Obernolte):  Surface mining and reclamation plans: exemption

This bill would exempt the operation of a renewable energy generation facility, as specified, from the requirements of Surface Mining and Reclamation Act of 1975.

AB-1142 (Gray):  Mining and geology: surface mining

AB-1142 would continue indefinitely the inclusion on the list identifying certain surface mining operations the identification of those surface mining operations.

This bill would revise and recast provisions of the Surface Mining and Reclamation Act of 1975 related to financial assurances and, among other things, would prohibit an operator being required to adjust financial assurances that are in excess of the amount determined necessary to perform reclamation in accordance with the surface mining operation’s approved reclamation plan, require financial assurance cost estimates be submitted for review and include estimates of the time needed to complete reclamation of the mine, and prescribe the actions to be taken by an operator, lead agency, and the director prior to the modification of the amount of a financial assurance or the full or partial release of the financial assurance instrument.

In addition, the bill would require the owner or operator of a mining operation to provide a copy of the previously completed annual inspection form and a requested date for the next annual inspection by the lead agency, require a lead agency to authorize an inspection to be conducted by an employee of the local agency who has received specified training, impose new requirements on the lead agency related to the timing of inspections, impose timelines on a lead agency related to the submission of an application for a permit to conduct a surface mining operation, and require the State Geologist to coordinate with the director, board, lead agencies, and interested parties to develop a curriculum for the training of mine inspectors.

Finally, this bill would require the lead agency, the director, or the board, as appropriate, to take into account and seek to minimize the impact of any proposed enforcement action on the number of existing jobs supported directly or indirectly by the surface mining operation.

AB-1490 (Rendon):  Oil and gas: well stimulation treatments: seismic activities

This bill would prohibit a well operator from conducting a well stimulation treatment following the occurrence of an earthquake of magnitude 2.0 or higher on a well that is within a radius of an unspecified distance from the epicenter of the earthquake until the Division completes a certain evaluation and is satisfied that the well stimulation treatment does not create a heightened risk of seismic activity. The bill would also prohibit wastewater disposal wells and all well stimulation treatments within ten miles of a recently active fault.  A violation of these prohibitions would be a crime.

AB-1501 (Rendon):  Well stimulation treatments: emissions

AB-1501 would require an air district to establish an emission standard for methane from a well stimulation treatment, as defined, and to issue a permit to an owner or operator to enforce that standard. The bill also would require the emission standard to include requirements on the owner or operator to monitor the well stimulation treatment for methane leaks.

In addition, this bill would require the state board or an air district, as appropriate, to install monitoring stations near any site approved by the Division for a well stimulation treatment, as specified. By adding to the duties of air districts, this bill would impose a state-mandated local program.

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