On March 7, 2018, the California Division of Oil, Gas and Geothermal Resources (“DOGGR,” or “Division”) published a notice to operators (“NTO”) regarding updated guidelines for oilfield water quality data. The NTO outlines procedures for submission of oilfield water quality data by operators, including required notices, injectate samples, formation water samples, documentation and final report and certification processes.
On March 8, 2018, California regulators reached a settlement agreement with Home Depot wherein the retail giant agreed to pay $27.84 million for various hazardous waste violations. The State hit Home Depot with penalties for alleged violations identified during inspections occurring between 2013 and 2015, due to improper disposal of certain types of waste, including batteries, aerosol cans, paints, and electronic devices. Attorney General Xavier Becerra reported that the settlement amount equated to about $16 million in civil penalties, $9 million toward environmental protection and compliance, and nearly $2 million to cover costs. The State alleged that Home Depot violated California’s Hazardous Waste Control Law, and California’s Unfair Competition Law because “such conduct gives Home Depot a competitive advantage over other regulated entities that are complying with the law.”
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.
On February 22, 2018, California Attorney General Xavier Becerra announced that the Department of Justice is opening an environmental justice office within the Environment Section: the Bureau of Environmental Justice (“Bureau”). “The Bureau’s mission will be to protect people and communities that endure a disproportionate share of environmental pollution and public health hazards.” Using existing federal and state statutes, the Bureau will accomplish its mission through targeted oversight, investigation, and enforcement actions.
According to the press release, the Bureau’s oversight and enforcement work will focus on:
- Ensuring compliance with the California Environmental Quality Act (“CEQA”) and land use planning laws;
- Remediating contaminated drinking water;
- Eliminating or reducing exposure to lead and other toxins in the environment and consumer products;
- Challenging the federal government’s actions that repeal or reduce public health and environmental protections; and
- Penalizing and preventing illegal discharges to air and water from facilities located in communities already burdened disproportionately with pollution.
On February 12, 2018, the California Department of Conservation (“DOC”) issued a public notice announcing revisions to the text of the proposed regulations in the rulemaking for California Underground Gas Storage Projects. This rulemaking follows a saga of rulemakings for underground gas storage projects in the state – both emergency and general rulemakings – which all began in early 2016. The rulemakings were spurred by the underground gas storage leak at the Aliso Canyon facility in southern California, which was discovered on October 23, 2015 and continued leaking until February 2016.
On February 1, 2018, the U.S. Court of Appeals for the Ninth Circuit upheld the district court’s decision, finding that the County of Maui violated the Clean Water Act (“CWA”) when it discharged treated effluent into underground injection wells, which then allowed the effluent to seep into the Pacific Ocean. The Ninth Circuit panel held that the wells were required to obtain National Pollutant Discharge Elimination System (“NPDES”) permit coverage because the discharge from the wells was “fairly traceable” from the discharge point (point source) to a navigable water.
California’s process to challenge thermal power plants will likely be put to the judicial test in the coming years. The California Court of Appeal has granted publication of its recent opinion in Communities for a Better Environment v. State Energy Resources Conservation and Development Commission, (Dec. 22, 2017, No. A141299) __Cal.App.5th __, which reverses the trial court’s dismissal of a complaint by environmental groups Communities for a Better Environment and Center for Biological Diversity (collectively “Communities”), challenging the constitutionality of the limited judicial review available for thermal power plant licenses issued in California. You can find our previous post detailing Communities’ complaint here.
In January 2014, the Alameda County Superior Court dismissed Communities’ claims that statutory provisions of California’s power plant siting law, the Warren-Alquist Act, violated article VI, section 10 of the California Constitution. Under this unique facet of the Warren-Alquist Act, any challenge to a decision by the California Energy Commission on a thermal power plant license must be appealed directly to the California Supreme Court. (Cal. Pub. Resources Code, § 25531(a).) The trial court sided with the Energy Commission and the California State Controller, who argued that the case was not grounded in any actual existing controversy among Communities and the Commission, sought an advisory opinion only, and was not ripe for review. The trial court concluded that Communities had failed to meet its burden to show how its complaint could be amended to state a justiciable cause of action, and, thus, it dismissed the matter with prejudice and entered judgment in favor of the Energy Commission and the Controller.
In early January 2018, the U.S. Environmental Protection Agency (“EPA”) decided to halt previous proposals to stay methane rules for new and existing landfills. The Obama Administration’s EPA issued the final New Source Performance Standards (“NSPS”) and Emissions Guidelines (“EG”) for municipal solid waste landfills on August 29, 2016 (jointly “Methane Rules”). These updates to the NSPS were promulgated to reduce emissions of methane-rich landfill gas from new, modified and reconstructed municipal solid waste (“MSW”) landfills. EPA’s current announcement to desert plans for an administrative stay comes after the EPA announced a 90-day administrative stay for the Methane Rules, which went into effect on May 31, 2017.
In March 2017, the California Air Resources Board (“ARB”) adopted regulations for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“Methane Regulations”), which impose emission controls for oil and gas facilities across the state. Following the state rulemaking process, ARB and the San Joaquin Valley Air Pollution Control District (“Air District”) – and the Air District’s regulated stakeholders – jointly determined that local administration of the program would provide for more effective and expeditious implementation at a lower cost to businesses in the Air District. Thus, in December 2017, the Air District adopted a registration program (Air District Rule 2260) to implement ARB’s regulations.
California’s State Mining and Geology Board had a busy 2017 with ongoing rulemakings to implement SMARA reform enacted in 2016. The Board’s 2018 will be busy and one to closely watch too, in particular, because the Board plans to address the unintended environmental consequences created by the adoption fifteen years ago of what is known as the “Backfill Regulation.”
For those who fled California in the wake of the Backfill Regulation, here’s a quick refresher on why you packed your bags and haven’t returned. The Backfill Regulation has two key requirements for open pit metallic mineral mines. First, the regulation requires all open pit excavations to be backfilled to the original surface elevation. Second, any excess material must be graded with the resulting topography not to exceed the pre-mining surface elevation by more than 25 feet.
Overall, the Backfill Regulation has been bad news for the California mining industry and the environment as explained in this February 2016 Update on the Regulatory Environment for Metallic Mines in California. In a nutshell, the Backfill Regulation requires moving material twice (increasing GHG emissions), fails to address the proper storage and handling of waste materials (jeopardizing water quality), and can cause greater ground disturbances (impacting habitat for sensitive species).