Bill Text: CA SB248 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Oil and gas.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2016-11-30 - From Assembly without further action. [SB248 Detail]

Download: California-2015-SB248-Amended.html

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BILL NUMBER: SB 248	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JULY 16, 2015
	AMENDED IN ASSEMBLY  JULY 1, 2015
	AMENDED IN SENATE  JUNE 1, 2015
	AMENDED IN SENATE  MAY 5, 2015
	AMENDED IN SENATE  APRIL 6, 2015

INTRODUCED BY   Senator Pavley

                        FEBRUARY 18, 2015

   An act to amend Sections 3108, 3213, and 3227 of, to add Sections
3011, 3106.3, 3113, 3114, 3213.5, and 3227.2 to, and to add Article
2.7 (commencing with Section 3140) to Chapter 1 of Division 3 of, the
Public Resources Code, relating to oil and gas.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 248, as amended, Pavley. Oil and gas.
   (1) Existing law requires the Division of Oil, Gas, and Geothermal
Resources in the Department of Conservation to regulate 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. Existing law requires
the State Oil and Gas Supervisor, on or before the first day of
October of each year, to make public a report on specified
information.
   This bill would require the supervisor to establish an inspection
program for all activities regulated pursuant to these provisions and
would require the total number of inspections and results of the
inspections to be included in the above-referenced report. The bill
would require the division's regulations, field rules, notices,
manuals, and other requirements to be reviewed and revised, as
needed, through a public process at least once every 10 years.
   The bill would require the division, as part of the Oil and Gas
Data Management System developed pursuant to the Budget Act of 2015,
to ensure that required well data and well-related submissions are
retained and readily available to the public and that publicly
available data are machine readable. Unless otherwise incorporated in
the Oil and Gas Data Management System, the bill would require the
division to post certain information that it receives on its Internet
Web site.
   The bill would define "enhanced oil recovery" for purposes of
provisions relating to the regulation of oil and gas.
   (2) Existing law requires an owner or operator of a well to keep,
or cause to be kept, and requires the operator to file with the
district deputy at specified times, a careful and accurate log, core
record, and history of the drilling of the well. Existing law
requires the well history to show the location and amount of
sidetracked casings, tools, or other material, the depth and quantity
of cement in cement plugs, the shots of dynamite or other
explosives, acid treatment data, the results of production and other
tests during drilling operations, and all data on well stimulation
treatments. Existing law requires the owner of any well to file with
the supervisor a monthly statement that provides certain information
relating to the well, including the amount of water produced from
each well. Existing law provides that a person who fails to comply
with specific laws relating to the regulation of oil or gas
operations, including failing to furnish a report or record, is
guilty of a misdemeanor.
   This bill would, in addition, require all operations on or in the
well of any form to be systematically, completely, and accurately
described and recorded in the well history. The bill would require
any fluid injected or emplaced in the well to be fully characterized
and reported as part of the history. The bill would require the
monthly statement to the supervisor to include the full
characterization of the chemical composition of water produced from
each well. The bill would also require the operator of a waste
disposal well to provide to the supervisor each quarter certain
information regarding waste disposal injections. Because a violation
of these requirements would be a crime, the bill would impose a
state-mandated local program.
   (3) The federal Safe Drinking Water Act regulates certain wells as
Class II wells. Under existing federal law, the authority to
regulate Class II wells in California is delegated to the Division of
Oil, Gas, and Geothermal Resources. Under existing regulations, a
well operator is required to obtain approval from the supervisor or a
district deputy for a subsurface injection or disposal project,
including Class II wells, or any change in a project, as provided.
   This bill would require the division, on or before January 1,
2018, to update and revise these  regulations  
regulations, except as specified,  according to specified
criteria and would require the division to consult with independent
experts and stakeholders in the development and review of the
regulations. The bill would require the regulations to include
certain requirements, including reporting requirements.  The bill
would require injection wells and well projects   existing
as of December 31, 2017, to be brought into compliance with these
regulations on or before January 1, 2020.  The bill would
require these provisions to be liberally construed in order to meet
specified requirements and to provide public transparency. The bill
would provide that where the division shares jurisdiction over an
injection well with a federal entity, the division's rules and
regulations are to apply in addition to all applicable federal laws
and regulations. The bill would require an injection well subject to
specified emergency  regulations   regulations,
or any successor regulations,  of the division regarding aquifer
exemptions to immediately cease injection operations, other than
those required for plugging and abandonment operations, if the well
is not in compliance with those  emergency 
regulations by the applicable regulatory deadline. Because a
violation of these requirements would be a crime, the bill would
impose a state-mandated local program.  The bill would
require specified injection wells and well projects existing as of
January 1, 2017, to be brought into compliance with these regulations
on or before January 1, 2020. 
   (4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) A 2011 audit of the Division of Oil, Gas, and Geothermal
Resources' injection well program commissioned by the United States
Environmental Protection Agency highlighted numerous problems with
the program.
   (b) The division has repeatedly acknowledged that it has failed to
follow applicable regulations in permitting injection wells and that
its injection well regulations are out of date. Among other reasons,
the division has cited antiquated data management practices.
   (c) The division's ability to regulate depends upon full
understanding and knowledge of practices occurring under its
jurisdiction.
   (d) Public transparency and regulatory accountability are
necessary to restore the public's confidence in the division.
  SEC. 2.  Section 3011 is added to the Public Resources Code, to
read:
   3011.  "Enhanced oil recovery" means any process to enhance the
displacement of oil or other hydrocarbons from a reservoir,
including, but not limited to, the injection or subsurface
emplacement of fluids or other materials into the productive strata,
the application of pressure, heat, or other means for the reduction
of viscosity of the hydrocarbons, and the supplying of additional
motive force.
  SEC. 3.  Section 3106.3 is added to the Public Resources Code, to
read:
   3106.3.  (a) The supervisor shall establish an inspection program
for all activities regulated pursuant to Section 3106.
   (b) In establishing the inspection program, the supervisor shall
do, but is not limited to doing, all of the following:
   (1) Identify activities subject to inspection.
   (2) Create forms or checklists associated with each type of
inspection.
   (3) Establish the time or time period in which each inspection
shall be performed.
   (4) Establish procedures for how an inspection shall be conducted.

   (c) The inspection program shall be available to the public on the
division's Internet Web site.
  SEC. 4.  Section 3108 of the Public Resources Code is amended to
read:
   3108.  (a) On or before the first day of October of each year the
supervisor shall make public, for the benefit of all interested
persons, a report in writing containing all of the following:
   (1) The total amounts of oil and gas produced in each county in
the state during the previous calendar year.
   (2) The total cost of the division for the previous fiscal year.
   (3) The total amount delinquent and uncollected from any
assessments or charges levied pursuant to this chapter.
   (4) The total number of inspections and the results of the
inspections.
   (b) The report shall also include other information as the
supervisor deems advisable.
  SEC. 5.  Section 3113 is added to the Public Resources Code, to
read:
   3113.  (a) It is the policy of the state that the division
regularly review and update its regulations, field rules, notices,
manuals, and other requirements to ensure that technological advances
and other changes in the exploration, development, and production of
oil and gas are incorporated  in order  to ensure
that life, health, property, and natural resources are protected
pursuant to Section 3106.
   (b) The division's regulations, field rules, notices, manuals, and
other requirements shall be reviewed and revised, as needed, through
a public process. The regulations, field rules, notices, manuals,
and other requirements need not be reviewed all at once, but each of
them shall be reviewed at least once every 10 years. A revision is
not required pursuant to this section if the supervisor makes a
public written finding indicating that the existing regulation, field
rule, manual, or other requirement is appropriate and reflects best
management practices.
   (c) The supervisor shall prepare and transmit reports to the
Legislature describing the results of the reviews required by this
section and any revisions made or planned to the division's
regulations, field rules, notices, manuals, and other requirements. A
report required by this subdivision shall be submitted in compliance
with Section 9795 of the Government Code.
   (d) The division shall develop and disseminate in a timely manner
training materials related to any revisions made pursuant to this
section.
  SEC. 6.  Section 3114 is added to the Public Resources Code, to
read:
   3114.  (a) The division shall, as part of the Oil and Gas Data
Management System developed pursuant to the Budget Act of 2015
(Chapter 10 of the Statutes of 2015), ensure that required well data
and well-related submissions are retained and readily available to
the public and that publicly available data are machine readable.
Unless otherwise incorporated in the Oil and Gas Data Management
System, the division shall make available to the public on its
Internet Web site at least all of the following:
   (1) Any notice received pursuant to Section 3203 within five days
of receipt.
   (2) Any changes in status of any notice received pursuant to
Section 3203 within five days of the change.
   (3) The log, history, and core record of a well within 10 days of
receipt.
   (b) The division shall consult with local, state, and federal
regulators in the development of the  data management plan
  Oil and Gas Data Management System  to facilitate
timely sharing of data.
  SEC. 7.  Article 2.7 (commencing with Section 3140) is added to
Chapter 1 of Division 3 of the Public Resources Code, to read:

      Article 2.7.  Injection Wells


   3140.  (a)  (1)    On or before January 1, 2018,
the division shall update and revise its regulations for all
injection wells and well projects for which the division has received
primacy from the United States Environmental Protection Agency
pursuant to Section 1425 of the federal Safe Drinking Water Act (42
U.S.C. Sec. 300h-4). 
   (2) Injection well and well project regulations that the division
is in the process of adopting as of January 1, 2016, and that address
issues identified in subdivision (c), shall not be subject to update
and revision pursuant to this section. 
   (b) In adopting regulations pursuant to this section, the division
shall, in consultation with independent experts and stakeholders
through a public process, do all of the following:
   (1) Develop best management practices for injection wells and well
projects.
   (2) Review cement and cementing requirements, including factors
influencing the aging of cement.
   (3)  Review and identify   Identify 
 the  impacts  and potential impacts  of injection
on the geologic  formation specific to each type of enhanced
oil recovery, waste disposal, and other well-related processes,
including   formations in which injection wells are
located to ensure that well and formation integrity is maintained and
groundwater with a beneficial use is protected, consider the range
of injection practices for different purposes, including, but not
limited to, waste disposal, cyclic steam injection, steam flooding,
and water flooding, and clearly identify  when fracturing of the
formation  occurs.   is deemed to occur or is
likely to occur that may result in surface movement, including, the
development of sinkholes and the loss of well and formation
integrity.  
   (c) Injection well and well project regulations adopted pursuant
to this section may do one or more of the following:  
   (1) Clarify standards for ensuring zonal isolation of injection
projects.  
   (2) Expressly define the quality of water to be protected when
constructing wells.  
   (3) Codify best practices for well construction.  
   (4) Establish permitting and regulatory requirements specific to
cyclic steam operations.  
   (5) Establish requirements specific to cyclic steam in diatomite,
including a regulatory framework for responding to surface
expressions and provide clarification regarding injection above
fracture gradient.  
   (6) Clarify the process and standards for establishing maximum
allowable surface pressure for injection operations. 
   3141.  The regulations  developed   adopted
 pursuant to Section 3140 shall ensure that the integrity of the
well, wellbore, and formation are maintained. In order to accomplish
this requirement, the regulations shall do both of the following:
   (a) Be specific to each type of injection well and well project
used for any purpose, including, but not limited to, enhanced oil
recovery and waste disposal.
   (b) Include any operation, treatment, process, and activity
performed to enhance oil recovery on, in, or in the vicinity of, any
well, wellbore, or hydrocarbon-bearing formation.
   3142.   The   (a)     It is
the intent of this section to provide specific direction to the
division to include certain components in the development of the
regulations required by this article in order to promote public
transparency and regulatory accountability, and address public
concerns about potential seismicity, surface instability, and the
fracturing of the formation induced by injection wells and their
operation. Additional state and federal law and regulations apply.

    (b)     The  regulations 
developed   adopted  pursuant to Section 3140 shall
include, but are not limited to, the following: 
   (a) 
    (1)  An opportunity for public participation in the well
and well project review  process.   process, if
not otherwis   e provided through  local land use
planning and zoning requirements.  
   (b) 
    (2) Full and complete geologic and hydrologic
characterization and reporting of the formation surrounding the well,
including the fracture pressure.  This characterization shall
include determination of the area of review pursuant to Section 146.6
of Title 40 of the Code of Federal Regulations, and the performance
of a step-rate test or tests to evaluate fracture pressure or
pressures.  
   (c) 
    (3)  Full and complete characterization and reporting of
all well operations with appropriate  monitoring, including
of surface movement and seismic activity.   monitoring
of surface movement such as the development of sinkholes or seismic
activity. To the extent practicable, monitoring requirements shall be
standardized and explicit in the regulations.  
   (d) 
    (4)  Establishment of limits on operations, and
procedures to follow in the event of surface  movement
  movement, including, but not limited to, the
development of sinkholes  and seismic activity.
   3143.  Injection wells and well projects existing as of December
31, 2017, shall be brought into compliance with the regulations
 developed   adopted  pursuant to Section
3140 on or before January 1, 2020.
   3144.  This article shall be liberally construed pursuant to
Section 3013 in order to meet the requirements of Section 3106 and to
provide public transparency.
   3145.  Where the division shares jurisdiction over an injection
well with a federal entity, the division's rules and regulations
shall apply in addition to all applicable federal laws and
regulations.
   3146.  An injection well subject to the division's emergency
regulations regarding aquifer exemptions (Sections 1760.1 and 1779.1
of Title 14 of the California Code of Regulations, effective on April
20,  2015)   2015), or any successor
regulations,  shall immediately cease injection operations other
than those required for plugging or abandonment operations if the
well is not in compliance with those regulations by the applicable
regulatory deadline.
  SEC. 8.  Section 3213 of the Public Resources Code is amended to
read:
   3213.  (a) The history shall show the location and amount of
sidetracked casings, tools, or other material, the depth and quantity
of cement in cement plugs, the shots of dynamite or other
explosives, all acid treatment data of any amount and concentration,
and the results of production and other tests during drilling
operations. All operations on or in the well of any form, including,
but not limited to, the injection or emplacement of any material in
the well for any purpose during the drilling, operation, maintenance,
or abandonment of the well shall be systematically, completely, and
accurately described and recorded in the history. All data on well
stimulation treatments pursuant to Section 3160 shall be recorded in
the history.
   (b) The well history reporting requirements shall not be waived.
  SEC. 9.  Section 3213.5 is added to the Public Resources Code, to
read:
   3213.5.  The chemical composition of any fluid injected or
emplaced in the well shall be fully characterized and reported as
part of the history. The chemical composition shall include any phase
present as part of, or suspended in, the fluid. The analytical
method used in the determination shall also be reported. Analytical
methods established by the United States Environmental Protection
Agency to determine chemical composition shall be used where
applicable. For purposes of this section, fluid means a liquid or gas
of any chemical composition. Subdivision (j) of Section 3160 shall
apply to any claim of trade secret protection for information
described in this section.
  SEC. 10.  Section 3227 of the Public Resources Code is amended to
read:
   3227.  (a) The owner of any well shall file with the supervisor,
on or before the last day of each month, for the last preceding
calendar month, a statement, in the form designated by the
supervisor, showing all of the following:
   (1) (A) The amount of oil and gas produced from each well during
the period indicated, together with the gravity of the oil, the
amount of water produced from each well, estimated in accordance with
methods approved by the supervisor, and the number of days during
which fluid was produced from each well.
   (B) The full characterization of the chemical composition of water
produced from each well, based on a representative sample, which
shall include any phase present as part of, or suspended in, the
water, and the analytical method used in making the characterization.
Analytical methods established by the United States Environmental
Protection Agency to determine chemical composition shall be used
where applicable.
   (2) The number of wells drilling, producing, injecting, or idle,
that are owned or operated by the person.
   (3) What disposition was made of the gas produced from each field,
including the names of persons, if any, to whom the gas was
delivered, and any other information regarding the gas and its
disposition that the supervisor may require.
   (4) What disposition was made of water produced from each field
and the amount of fluid or gas injected into each well used for
enhanced recovery, underground storage of hydrocarbons, or wastewater
disposal, and any other information regarding those wells that the
supervisor may require.
   (5) The source of water, and volume of any water, reported in
paragraph (4), including the water used to generate or make up the
composition of any injected fluid or gas. Water volumes shall be
reported by water source if more than one water source is used. The
volume of untreated water suitable for domestic or irrigation
purposes shall be reported. Commingled water shall be proportionally
assigned to individual wells, as appropriate.
   (6) The treatment of water and the use of treated or recycled
water in oil and gas field activities, including, but not limited to,
exploration, development, and production.
   (7) (A) The specific disposition of all water used in or generated
by oil and gas field activities, including water produced from each
well reported pursuant to paragraph (1). Water volumes shall be
reported by disposition method if more than one disposition method is
used. Commingled water shall be proportionally assigned to
individual wells, as appropriate.
   (B) This information shall also include the temporary onsite
storage of water, as or if appropriate, and the ultimate specific
use, disposal method or method of recycling, or reuse of this water.
   (b) Any operator that produces oil by the application of mining or
other unconventional techniques shall file a report with the
supervisor, on or before March 1 of each year, showing the amount of
oil produced by those techniques in the preceding calendar year.
   (c) (1) Upon request and making a satisfactory showing therefor, a
longer filing period may be established by the supervisor for any
particular owner or operator.
   (2) Notwithstanding subdivision (a), the owner of any well shall
file with the supervisor, on a quarterly basis, a statement
containing the information required to be reported pursuant to
paragraphs (5), (6), and (7) of subdivision (a) in the form
designated by the supervisor.
   (d) The division shall use a standardized form or format to
facilitate reporting required pursuant to this section.
   (e) The division shall use noncustom software, as feasible, to
implement online reporting by the operator of the information
required pursuant to paragraphs (5), (6), and (7) of subdivision (a).
This information may be reported separately from other information
required to be reported pursuant to this section.
   (f) For purposes of this section, the following terms have the
following meanings:
   (1) "Source of water" or "water source" means any of the
following:
   (A) The well or wells, if commingled, from which the water was
produced or extracted.
   (B) The water supplier, if purchased or obtained from a supplier.
   (C) The point of diversion of surface water.
   (2) "Specific disposition of all water" means the identification
of the ultimate specific use, disposal method or method of recycling,
or reuse of the water. This includes, but is not limited to, the
identification of any treatment or recycling method used, injection
of the water into specific injection or disposal well or wells, if
commingled, discharge of the water to surface water or sumps, and
sale or transfer of the water to a named entity.
  SEC. 11.  Section 3227.2 is added to the Public Resources Code, to
read:
   3227.2.  (a) The operator of a waste disposal well shall provide
to the supervisor each quarter information described in subdivision
(b) from the preceding quarter that is specific to each waste
disposal injection performed at the well and that fully characterizes
each waste disposal injection performed at the well. The information
shall be reported in a machine-readable format.
   (b) The information to be provided shall include, but is not
limited to, the date and time of the injection, the duration of the
injection, the volume of material injected, the rate of injection,
and the applied pressure of the injection.
  SEC. 12.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.