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 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 2017-2018 Legislative Session proceeds.
Please also see our Renewable + Law post summarizing bills related to other energy topics here.
AB 476 (Gipson, D): Vehicular air pollution.
Status: Two-year bill; last amended April 17, 2017.
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.
AB 1197 (Limón, D): Oil spill contingency plans: spill management teams.
STATUS: Ordered to Senate May 30, 2017; passed and referred to Senate Appropriations on July 5, 2017.
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. Existing law provides for the rating of oil spill response organizations (“OSROs”) by the administrator pursuant to specified provisions and requires an oil spill contingency plan to identify at least one rated OSRO for each rating level established pursuant to those provisions.
This bill would no longer require an oil spill contingency plan to identify at least one rated OSRO for each rating level and would instead require the plan to identify at least one OSRO rated pursuant to those provisions, and would authorize an owner or operator to rely on its own response equipment and personnel, if they have been rated by the administrator, as specified.
This bill would authorize a spill management team (“SMT”) to apply to the administrator for a certification of that SMT’s response capabilities. AB 1197 would require the administrator to establish criteria for certifying an SMT based on the SMT’s capacity to respond to spills and manage spills effectively, review applications for SMT certification, and certify 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 certification 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 certified SMT, certified by the administrator pursuant to the provisions described above, and would require an owner or operator to rely on its own spill management team that has been certified by the administrator.
AB 1328 (Limón, D): Oil and gas: water quality.
STATUS: Ordered to Senate June 1, 2017; amended June 29, 2017; referred to Senate Appropriations July 17, 2017.
Under existing law, the Porter-Cologne Water Quality Control Act, the State Water Resources Control Board (“SWRCB”) and the California regional water quality control boards (“Regional Board”) are the principal state agencies with primary authority over water quality matters. The act authorizes a Regional Board to investigate the quality of state waters, and grants to a Regional Board certain authority in connection with those investigative functions, including the authority, in connection with the discharge or suspected discharge of waste by a person or entity, as specified, to require that the person or entity furnish technical or monitoring program reports to the Regional Board. The act provides certain protections for trade secrets that are disclosed to the Regional Board, upon request by the person or entity. The act authorizes the SWRCB to carry out the above provisions if, after consulting with the appropriate Regional Board, the SWRCB determines that it will not duplicate the efforts of the Regional Board. The act declares that a person failing or refusing to furnish technical or monitoring program reports, or falsifying any information set forth in those reports, is guilty of a misdemeanor and may be civilly liable in accordance with certain provisions of law.
Under existing law, DOGGR regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state and requires the owner of any well to file with the State Oil and Gas Supervisor a monthly statement that provides certain information relating to the well, including the amount of water produced from each well, the disposition of the water produced from an oil or gas field, the amount of fluid injected into a well used for enhanced recovery, and information relating to wastewater disposal.
This bill would provide:
- provide that, if a person’s or entity’s disposition of wastewater produced from an oil or gas field includes or is suspected to include discharge to surface or land, the SWRCB or the appropriate Regional Board may also require the person or entity, or its supplier, as specified, to furnish information to the SWRCB or Regional Board relating to all chemicals in the discharged wastewater that could affect the quality of state waters;
- provide for the trade secret protections described above to apply to information disclosed pursuant to this requirement, when requested by a person or entity, or a supplier;
- require the information collected pursuant to this requirement to be made available to the public on the Internet Web site of the SWRCB and the appropriate Regional Board; and,
- authorize the SWRCB or a Regional Board to consult with DOGGR regarding information collected by the division, pursuant to other disclosure requirements, that may be useful to the investigation.
Because a violation of a requirement to disclose information to the SWRCB or the appropriate Regional Board under these provisions would be a crime, the bill would impose a state-mandated local program.
AB 1472 (Limón, D): Public lands: assignments and transfers; oil, gas and mineral leases.
STATUS: Enrolled and presented to the Governor July 10, 2017; VETOED by the Governor on July 25, 2017. Existing law vests with the State Lands Commission (the “SLC”)_control over certain public lands and 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 SLC, to any person, association of persons, or corporation, who at the time of the proposed assignment, transfer, or sublease, possesses certain qualifications. This bill would authorize the SLC, in considering an approval of an assignment, transfer, or sublease of a lease under those provisions, to consider whether the proposed assignee, as defined, is likely to comply with all provisions of the assigned lease for the duration of the lease term, as determined by specified factors.
AB 1647 (Maratsuchi, D): Petroleum refineries: air monitoring systems.
STATUS: Ordered to Senate May 30, 2017; amended June 22, 2017.
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 a community air monitoring system, as defined, on or before January 1, 2020, and would require an air district to design, develop, install, operate and maintain the community air monitoring system. The bill would further require an owner or operator of a petroleum refinery to develop, install, operate, and maintain 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. Furthermore, this bill would require the owner or operator of a petroleum refinery to be responsible for the costs associated with the community air monitoring system and the fence-line monitoring system.
SB 44 (Jackson, D): State lands: coastal hazard and legacy oil and gas well removal and remediation program.
STATUS: Referred to Assembly Appropriations July 10, 2017
Existing law establishes the 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 two 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 from the prior year;
- require that, for the 2018-2019 fiscal year, out of those funds deposited into the General Fund by the Commission, the sum of $2 million 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 2019-2020 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 million 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: Failed to pass to Assembly; remains in Senate; last amended May 26, 2017.
Under existing law, 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 Los Angeles County 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 California Public Utilities Commission (“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 Los Angeles County 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;
- authorize the Governor to order incremental injections at the facility, but only if the Governor determines it is necessary to avoid, or respond to, an emergency situation; and
- require the proceeding to be completed by December 31, 2017.
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 thereof 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 commission 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 commission 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. The bill would apply the exceptions applicable to the California Coastal Sanctuary to these provisions. The bill would 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.
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.
SB 637 (Hill, D): Public Utilities Commission: gas corporations: electrical corporations: safety.
STATUS: Two-year bill.
Under existing law, the CPUC has regulatory authority over public utilities, including electrical corporations and gas corporations. The Public Utilities Act requires the CPUC to investigate the cause of all accidents occurring upon the property of any public utility or directly or indirectly arising from or connected with its maintenance or operation, resulting in loss of life or injury to person or property and requiring, in the judgment of the CPUC, investigation by it, and authorizes the CPUC to make any order or recommendation with respect to the investigation that it determines to be just and reasonable. The California Constitution authorizes the CPUC to establish rules for all public utilities, subject to control by the legislature. In addition, current law requires the CPUC to appoint an executive director who is responsible for the CPUC’s executive and administrative duties and to organize, coordinate, supervise, and direct the operations and affairs of the CPUC and expedite all matters within the CPUC’s jurisdiction. Existing law authorizes the executive director of the CPUC to employ those officers, administrative law judges, experts, engineers, statisticians, accountants, inspectors, clerks, and employees as the executive director deems necessary to carry out the provisions of the Public Utilities Act or to perform the duties and exercise the powers conferred upon the CPUC by law.
The California Constitution authorizes the CPUC to establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process. The Public Utilities Act requires the CPUC to determine whether a proceeding requires a hearing and, if so, to determine whether the matter requires a quasi-legislative, an adjudication, or a rate-setting hearing. For these purposes, quasi-legislative cases are cases that establish policy rulemakings and investigations that may establish rules affecting an entire industry. Existing law generally permits ex parte communications in quasi-legislative cases. Moreover, pursuant to its existing authority, the CPUC has issued an interim decision adopting a multi-attribute approach and directing certain public utilities to take steps toward a more uniform risk management framework.
If enacted, SB 637 would:
- (1) require the CPUC to adopt a commission-wide gas corporation and electrical corporation safety program that includes specified elements and (2) authorize the CPUC to adopt an organization-wide safety program for other public utilities and specified non-utilities that are also subject to the CPUC’s regulatory jurisdiction;
- require gas corporations and electrical corporations to have effective programs to continually identify safety hazards and to analyze, assess, and mitigate or eliminate safety risks;
- specify the safety-related responsibilities with respect to gas corporations and electrical corporations of various entities within the CPUC;
- require the CPUC to (1) perform a detailed safety management assessment for each gas corporation and electrical corporation not less often than every five years and (2) take official notice of the safety management assessment in relevant proceedings, including general rate cases;
- require the CPUC, by March 1, 2018, to contract with one or more consultants to determine the effectiveness of its internal safety communications and decision-making processes and the incentives for staff in primarily safety-related roles compared to the incentives and opportunities for attorneys, administrative law judges, and staff in primarily non-safety, energy-policy-related roles;
- require the executive director to provide an engineer to each CPUC to advise him or her on the technical aspects of safety and the technical aspects of other topics within the jurisdiction of the CPUC;
- require that any excess of formality in CPUC policy or administrative practice not be used to prevent CPUC staff from submitting findings and evidence relevant to safety into the quasi-legislative proceeding record or from presenting arguments to improve safety in quasi-legislative cases; and
- void a specified order in that interim decision and direct the Safety and Enforcement Division and executive director of the CPUC to not implement that order.
SB 709 (Wiener, D): Oil spill response and contingency planning.
STATUS: Two-year bill; last amended April 26, 2017.
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 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:
- require the administrator to conduct and complete, by January 1, 2020, an independent scientific study on the best achievable protection of state waters from spills of non-floating or potentially non-floating oils, including criteria for oil spill contingency plans and OSROs responsible for remediating those spills;
- require that the scientific study evaluate the hazards and risks and potential hazards and risks that non-floating or potentially non-floating oils pose to natural resources and public, occupational, and environmental health and safety;
- require the administrator to post the results and recommendations of the completed scientific study on an Internet Web site maintained by the administrator;
- require the administrator, by January 1, 2019, to identify those oils transported into or through the state that place waters of the state at risk from an oil spill that are composed in whole or in part of non-floating or potentially non-floating oil and, through a public process, to establish criteria to identify specific characteristics of non-floating and potentially non-floating oil;
- require the administrator to periodically update and publicly release this list as the sources and types of non-floating or potentially non-floating oil change;
- 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: Ordered to Assembly June 1, 2017; referred to Assembly Appropriations July 10, 2017.
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 the 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 requires the operator of any idle well to either file with the Supervisor a certain annual fee or file a plan with the Supervisor to provide for the management and elimination of all long-term idle wells, as specified. SB 724 would, if the operator has eliminated more wells than required in the prior two years under the plan, authorize the Supervisor to deduct from the new requirement in the plan the net total of long-term idle wells eliminated in excess of those previously required.
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 six-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 DOGGR from expending, commencing with the 2015-2016 fiscal year, more than $1 million 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 million to $5 million in any one fiscal year;
- require DOGGR to provide certain information regarding those wells and facilities to cities and counties upon request;
- authorize a city or county to apply to DOGGR to enter into a contract with DOGGR 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 DOGGR to conduct work related to plugging and abandoning a well and decommissioning production facilities, as specified;
- prohibit DOGGR, 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 of Conservation 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 of Conservation to provide the Legislature with an update to this report on October 1, 2022, containing specified information.
SB 759 (McGuire, D): Wells: fees and indemnity bonds.
STATUS: Introduced February 17, 2017; amended April 19, 2017.
Existing law requires a person who acquires the ownership or operation of a well or wells, within 30 days of after acquiring the well or wells, to file with the Supervisor an individual indemnity bond in the sum of $25,000 for each well acquired or a blanket indemnity bond of $100,000 for any number of wells acquired. If enacted, SB 759 would require that person to file with the Supervisor a financial assurance estimate and individual indemnity bond for each well acquired, with supporting data assessing the true cost of total completion and remediation of each well and well site upon cessation of operation or an individual indemnity bond in the sum of $100,000 for each well acquired.
In addition, current law establishes fees for the drilling of certain shallow geothermal wells of $25 per well or $200 per program, whichever is less and requires that fee to be deposited in the Oil, Gas, and Geothermal Administrative Fund and to be available upon appropriation exclusively for the supervision of geothermal resource wells. This bill would increase those fees to $100 per well or $500 per program, whichever is less, and would additionally make the revenue generated by these fees available upon appropriation for the plugging and abandonment of any geothermal well deemed deserted.
Moreover, present law requires the owner or operator of any other geothermal well to pay the appropriate fees before commencing the original drilling of a geothermal well or the re-drilling of an abandoned well. SB 759 would delete those fees.
Finally, existing law authorizes a person who engages in the drilling, re-drilling, deepening, maintaining, or abandoning of a well to file with the Supervisor one bond for $100,000 to cover the person’s operations in the state in lieu of an individual indemnity bond for each of the person’s operations. This bill would increase that bond amount to $1 million and would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, thus requiring for passage the approval of two-thirds of the membership of each house of the legislature.
SB 773 (Stern, D): Oil and gas: well records.
STATUS: Two-year bill; amended in Senate on May 26, 2017; ordered to Assembly May 31, 2017.
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. In addition, existing law requires the log to be kept in the local office of the owner or operator and, together with the tour reports of the owner or operator, is subject, during business hours, to inspection by the Supervisor, the district deputy, or the director. 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.
This bill would require the well history and all well summaries, in addition to the log, to be kept in the local office of the owner or operator, and would make them subject, during business hours, to inspection by the Supervisor, the district deputy, or the director. Because a violation of this requirement would be a crime, the bill would impose a state-mandated local program. The bill would require DOGGR to post on its Internet Web site, in a manner determined by DOGGR, specified mandatory disclosures received from operators on or after January 1, 2019, within 30 days of receipt.