Bill Text: CA SB34 | 2013-2014 | Regular Session | Amended

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

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Bill Title: Greenhouse gas: carbon capture and storage.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2014-02-03 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB34 Detail]

Download: California-2013-SB34-Amended.html

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BILL NUMBER: SB 34	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 10, 2013
	AMENDED IN SENATE  FEBRUARY 15, 2013

INTRODUCED BY   Senator  Rubio   Calderon 

                        DECEMBER 3, 2012

   An act to amend Section 659 of the Civil Code, to amend Section
51010.5 of the Government Code, to add Section 38572 to the Health
and Safety Code, and to add Section 3239 to the Public Resources
Code, relating to greenhouse gas, and declaring the urgency thereof,
to take effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 34, as amended,  Rubio   Calderon  .
Greenhouse gas: carbon capture and storage.
   (1) Existing law requires the Division of Oil, Gas, and Geothermal
Resources of the Department of Conservation to regulate the
construction and operation of oil, gas, and geothermal wells.
Pursuant to existing federal law, the federal Underground Injection
Control (UIC) program, the United States Environmental Protection
Agency delegated responsibility to the division to regulate class II
wells, which are wells that use injections for, among other things,
enhanced recovery of oil or natural gas. The federal UIC program
implements regulations that apply to class VI wells, which include
wells used for geologic sequestration of carbon dioxide under
specific circumstances.
   This bill, upon the adoption by the State Air Resources Board of a
final methodology for carbon capture and storage projects seeking to
demonstrate geologic sequestration of greenhouse gases, specifically
would require the division to regulate carbon dioxide enhanced oil
recovery projects that seek to demonstrate carbon sequestration under
various laws providing for the reduction of greenhouse gas
emissions.
   (2) The California Global Warming Solutions Act of 2006 requires
the State Air Resources Board to establish regulations to achieve
specified greenhouse gas emissions reduction goals. The act
authorizes the state board to include market-based compliance
mechanisms in achieving those reduction goals.
   This bill would require the state board, by January 1, 2016, to
adopt a final methodology for carbon capture and storage projects
seeking to demonstrate sequestration under various laws providing for
the reduction of greenhouse gas emissions.
   (3) The Elder California Pipeline Safety Act of 1981 vests the
State Fire Marshal with the exclusive safety regulatory and
enforcement authority over intrastate hazardous liquid pipelines and,
to the extent authorized by an agreement between the State Fire
Marshal and the United States Department of Transportation,
interstate hazardous liquid pipelines.
   This bill would additionally vest the State Fire Marshal with the
exclusive safety regulatory and enforcement authority over pipelines
transporting a fluid consisting of more than 90% carbon dioxide
compressed to a supercritical state.
   (4) Existing law defines land as the material of the earth and
includes free or occupied space for an indefinite upward or downward
distance for the purpose of prescribing ownership of land.
   This bill would specify that free space includes pore space that
can be possessed and used for the storage of greenhouse gas.
   (5) This bill would declare that it is to take effect immediately
as an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  This measure shall be known and may be cited as the
Carbon Capture and Storage Act of 2013.
  SEC. 2.  (a) The Legislature finds and declares all of the
following:
   (1) California has established stringent short-term and long-term
greenhouse gas (GHG) reduction goals that are functionally similar to
the federal and international emission reduction goals. Executive
Order S-3-05 committed California to reduce the GHG emissions to year
2000 levels by 2010 and to year 1990 levels by 2020, and to 80
percent below the year 1990 levels by 2050, a level consistent with
the current scientific evidence regarding emission reductions needed
to stabilize the climate. The California Global Warming Solutions Act
of 2006 (Division 25.5 (commencing with Section 38500) of the Health
and Safety Code) separately obligates California to reduce GHG
emissions to the year 1990 levels by 2020.
   (2) The scoping plan adopted pursuant to the California Global
Warming Solutions Act of 2006 recognizes that carbon capture and
storage (CCS) can play a role in helping the state meet its long-term
GHG reduction goals. Cap-and-trade programs worldwide, including the
Kyoto Protocol to the United Nations Framework Convention on Climate
Change (UN Doc. FCCC/CP/1997/7/Add.1, 37 ILM 22) and the European
Union Emissions Trading Scheme (Directive 2003/87/EC, as amended),
include CCS as a means for compliance. The 2010 Cancun Agreements
under the Kyoto Protocol (UN Doc. FCCC/CP/2010/7/Add.1) envision that
CCS will be able to generate certified emissions reductions (CERs)
under the clean development mechanism (CDM). The 2011 Durban Platform
under the Kyoto Protocol (UN Doc. FCCC/CP/2011/L.10) provides
modalities and procedures regarding specifically how CCS projects may
generate CERs under the CDM.
   (3) The geologic storage of carbon dioxide is expected to provide
an effective means of storing carbon dioxide over geologic time
periods. The Intergovernmental Panel on Climate Change (IPCC), in its
2005 Special Report on Carbon Dioxide Capture and Storage, states
that "  o]bservations from engineered and natural analogues as
well as models suggest that the fraction retained in appropriately
selected and managed geological reservoirs is very likely to exceed
99 percent over 100 years and is likely to exceed 99 percent over
1,000 years."
   (4) The deployment of CCS can materially help California to
achieve its long-term GHG  emission   emissions
 reduction goals. The International Energy Agency's 2011 World
Energy Outlook describes CCS as a "key abatement option" that
accounts for 18 percent of emission savings in a key modeled
scenario. The International Energy Agency further reports that CCS
investment must be made "now" if emission reductions are to be
achieved economically. The August 2010 report of the President's
Interagency Task Force on CCS describes the technology as one that
can "greatly reduce" GHG emissions while playing an "important role
in achieving national and global" GHG reduction goals. In its
December 2010 report, the California Carbon Capture and Storage
Review Panel states that "t]here is a public benefit from long-term
geologic storage of carbon dioxide] as a strategy for reducing GHG
emissions to the atmosphere as required by California laws and
policies."
   (5) Despite the existence of comprehensive federal CCS
regulations, impediments to the deployment of CCS technology in
California remain, including specific gaps in California laws and
regulation. Many of these gaps are identified and discussed by the
California Carbon Capture and Storage Review Panel's December 2010
report. These gaps include clarifying ownership of the pore space and
clarifying regulatory responsibility for permitting CCS projects.
   (6) By exercising a leadership role in CCS technology, California
will position its economy, technology centers, financial
institutions, and businesses to benefit from efforts to reduce
emissions of GHGs through CCS.
   (7) California has ample geologic storage capacity for carbon
dioxide. In a 2005 report, the United States Department of Energy
determined that the state has a "huge potential for geological
sequestration capacity." The study estimated that the saline
formations have a storage capacity of 146 to 840 gigatons of carbon
dioxide. Moreover, those formations also have large numbers of oil
and gas fields and significant potential for carbon dioxide enhanced
oil recovery (CO2-EOR). The CO2-EOR technology is a proven mature
technology that can be used to sequester carbon dioxide given
adequate regulatory oversight.
   (8) In another 2005 study, the United States Department of Energy
documented the potential energy production and GHG storage potential
of CO2-EOR technology for California. That study reached several
conclusions, including California has a large "stranded oil" resource
base that will be left in the ground following the use of today's
oil recovery practices, much of California's large "stranded oil"
resource base is amenable to CO2-EOR, application of miscible and
immiscible CO2-EOR would enable a significant portion of the
California's "stranded oil" to be recovered, and the successful
introduction and wide scale use of CO2-EOR in California would
stimulate the economy, provide new higher paying jobs, and lead to
higher tax revenues for the state.
   (9) Carbon dioxide capture is subject to federal regulations. The
United States Environmental Protection Agency (USEPA) regulates air
emissions of GHGs through several regulatory programs, including the
Prevention of Significant Deterioration (PSD) and Title V permitting
programs under the federal Clean Air Act (42 U.S.C. Sec. 7401 et
seq.). The USEPA's PSD and Title V Permitting Guidance for Greenhouse
Gases states that permit writers must consider CCS technology to be
"available" as part of the five-step Best Available Control
Technology assessment process. Subpart PP (commencing with Section
98.420) of, subpart RR (commencing with Section 98.440) of, and
subpart UU (commencing with Section 98.470) of, Part 98 of Title 40
of the Code of Federal Regulations prescribing GHG reporting rules
separately require companies engaged in the injection of carbon
dioxide, geological sequestration of carbon dioxide, or other
CCS-related operations to report their atmospheric emission of GHGs.
These regulations apply in California.
   (10) Carbon dioxide transport is subject to comprehensive federal
regulation by all modes, including pipeline, road, or ground. These
regulations apply in California.
   (11)  The pipeline transport of carbon dioxide is a proven mature
technology. In its 2005 special report of CCS, the IPCC states that
the "p]ipeline transport of carbon dioxide] operates as a mature
market technology (in the United States], over 2,500 kilometers] of
pipelines transport more than 40 million metric tons of carbon
dioxide] per year)." Federal government data demonstrate that carbon
dioxide pipelines have been operated safely. Meanwhile, the trucking
industry has safely transported significant quantities of carbon
dioxide for decades for a variety of commercial end users, including
the carbonated beverage industry.
   (12) Carbon dioxide injection and storage is subject to extensive
federal regulations. In December 2010, the USEPA finalized its class
VI regulations (76 Fed. Reg. 56982) under the Underground Injection
Control (UIC) program, and since that time the USEPA has issued
several detailed implementation guidance documents. Those regulations
do not apply unless carbon dioxide is being injected for the primary
purpose of long-term storage into an oil and gas reservoir and there
is an increased risk to underground sources of drinking water
compared to class II operations. The UIC class VI well program
regulations apply in California and are implemented by the USEPA. The
UIC class II well program regulations apply in California and the
USEPA has delegated its implementation responsibilities to the
Division of Oil, Gas, and Geothermal Resources of the Department of
Conservation.
   (13) The goals of creating a regulatory framework that ensures the
safe deployment of CCS technology in a manner consistent with the
state's goals for GHG reduction can best be accomplished by
clarifying the ownership of the pore space and the regulatory
responsibility of permitting CCS projects.
   (b) It is the intent of the Legislature to create a clear and
comprehensive permitting regime for CCS projects in California.
   (c) In enacting this act, the Legislature does not intend to
require the deployment of CCS technology but only to provide a clear
and certain regulatory structure for CCS projects.
   (d) In enacting this act, the Legislature intends to clarify the
Division of Oil, Gas, and Geothermal Resources' authority to regulate
carbon dioxide injection for enhanced oil recovery projects, the
State Fire Marshal's authority to regulate carbon dioxide intrastate
pipelines, that free space includes pore space that can be possessed
and used for the storage of greenhouse gas, and that the remaining
provision of this measure applies to CCS projects and carbon dioxide
enhanced oil recovery projects seeking to reduce a compliance
obligation pursuant to the California Global Warming Solutions Act of
2006 (Division 25.5 (commencing with Section 38500) of the Health
and Safety Code) by demonstrating simultaneous sequestration of
injected carbon dioxide. The Legislature does not intend to limit or
supersede the division's authority as it relates to existing or
future carbon dioxide enhanced oil recovery projects that do not seek
to reduce a compliance obligation pursuant to the California Global
Warming Solutions Act of 2006.
  SEC. 3.  Section 659 of the Civil Code is amended to read:
   659.  (a) Land is the material of the earth, whatever may be the
ingredients of which it is composed, whether soil, rock, or other
substance, and includes free or occupied space for an indefinite
distance upwards as well as downwards, subject to limitations upon
the use of airspace imposed, and rights in the use of airspace
granted, by law.
   (b) (1) The free space specified in subdivision (a) includes pore
space that can be possessed and used for the storage of greenhouse
gas in the state.
   (2) This subdivision does not change or alter the law as it
relates to the rights belonging to, and the dominance of, the mineral
estate, and does not change or alter the incidents of ownership or
other rights of the owners of the mineral estate, including the right
to mine, drill, complete, or abandon a well, the right to inject
substances to facilitate production, the right to implement enhanced
recovery for the purposes of recovery of oil, gas, or other minerals,
or the dominance of the mineral estate.
  SEC. 4.  Section 51010.5 of the Government Code is amended to read:

   51010.5.  As used in this chapter, the following definitions
apply:
   (a) "Pipeline" includes every intrastate pipeline used for the
transportation of hazardous liquid substances, carbon dioxide, or
highly volatile liquid substances, including a common carrier
pipeline, and all piping containing those substances located within a
refined products bulk loading facility that is owned by a common
carrier and is served by a pipeline of that common carrier, and the
common carrier owns and serves by pipeline at least five of these
facilities in the state. "Pipeline" does not include the following:
   (1) An interstate pipeline subject to Part 195 of Title 49 of the
Code of Federal Regulations.
   (2) A pipeline for the transportation of a hazardous liquid
substance in a gaseous state.
   (3) A pipeline for the transportation of crude oil that operates
by gravity or at a stress level of 20 percent or less of the
specified minimum yield strength of the pipe.
   (4) Transportation of petroleum in onshore gathering lines located
in rural areas.
   (5) A pipeline for the transportation of a hazardous liquid
substance offshore located upstream from the outlet flange of each
facility on the Outer Continental Shelf where hydrocarbons are
produced or where produced hydrocarbons are first separated,
dehydrated, or otherwise processed, whichever facility is farther
downstream.
   (6) Transportation of a hazardous liquid by a flow line.
   (7) A pipeline for the transportation of a hazardous liquid
substance through an onshore production, refining, or manufacturing
facility, including a storage or inplant piping system associated
with that facility.
   (8) Transportation of a hazardous liquid substance by vessel,
aircraft, tank truck, tank car, or other vehicle or terminal
facilities used exclusively to transfer hazardous liquids between
those modes of transportation.
   (b) "Flow line" means a pipeline that transports hazardous liquid
substances from the wellhead to a treating facility or production
storage facility.
   (c) "Hydrostatic testing" means the application of internal
pressure above the normal or maximum operating pressure to a segment
of pipeline, under no-flow conditions for a fixed period of time,
utilizing a liquid test medium.
   (d) "Local agency" means a city, county, or fire protection
district.
   (e) "Rural area" means a location that lies outside the limits of
any incorporated or unincorporated city or city and county, or other
residential or commercial area, such as a subdivision, a business, a
shopping center, or a community development.
   (f) "Gathering line" means a pipeline eight inches or less in
nominal diameter that transports petroleum from a production
facility.
   (g) "Production facility" means piping or equipment used in the
production, extraction, recovery, lifting, stabilization, separation,
or treatment of petroleum or associated storage or measurement. (To
be a production facility under this definition, piping or equipment
must be used in the process of extracting petroleum from the ground
and transporting it by pipeline.)
   (h) "Public drinking water well" means a wellhead that provides
drinking water to a public water system as defined in Section 116275
of the Health and Safety Code, that is regulated by the State
Department of Public Health and that is subject to Section 116455 of
the Health and Safety Code.
   (i) "GIS mapping system" means a geographical information system
that will collect, store, retrieve, analyze, and display
environmental geographical data in a database that is accessible to
the public.
   (j) "Motor vehicle fuel" includes gasoline, natural gasoline,
blends of gasoline and alcohol, or gasoline and oxygenates, and any
inflammable liquid, by whatever name the liquid may be known or sold,
which is used or is usable for propelling motor vehicles operated by
the explosion type engine. It does not include kerosene, liquefied
petroleum gas, or natural gas in liquid or gaseous form.
   (k) "Oxygenate" means an organic compound containing oxygen that
has been approved by the United States Environmental Protection
Agency as a gasoline additive to meet the requirements for an
"oxygenated fuel" pursuant to Section 7545 of Title 42 of the United
States Code.
   (l) "Carbon dioxide" means a fluid consisting of more than 90
percent carbon dioxide molecules.
  SEC. 5.  Section 38572 is added to the Health and Safety Code, to
read:
   38572.  (a) On or before January 1, 2016, the state board shall
adopt a final quantification methodology for carbon capture and
storage projects seeking to demonstrate geologic sequestration.
   (b) The methodology adopted pursuant to subdivision (a) shall be
used for the quantification of emissions as part of compliance
obligations under any of the following:
   (1) The mandatory reporting requirements adopted pursuant to
Section 38530.
   (2) The demonstration of sequestration for the purposes of any
regulation implementing a market-based compliance mechanism pursuant
to this part.
   (3) The demonstration of sequestration under the greenhouse gas
 emission   emissions  performance standard
established pursuant to Chapter 3 (commencing with Section 8340) of
Division 4.1 of the Public Utilities Code.
   (c) The state board shall consult with the Public Utilities
Commission and the State Energy Resources Conservation and
Development Commission on the development of the quantification
methodology, and, to the maximum extent possible, coordinate the
incorporation of the methodology into the emissions performance
standard enforcement processes of those commissions.
   (d) The quantification methodology shall include a methodology for
carbon dioxide enhanced oil recovery projects seeking to demonstrate
simultaneous sequestration of injected carbon dioxide. The
methodology shall address multiple modes of carbon dioxide
transportation, including pipeline, rail, and road transportation.
The methodology shall do all of the following:
   (1) Ensure that greenhouse gas  emission  
emissions  reductions, achieved pursuant to the methodology, are
real, permanent, quantifiable, verifiable, and enforceable by the
state board.
   (2) Demonstrate that sites are capable of long-term containment of
carbon dioxide.
   (3) Identify and characterize potential natural and manmade
leakage pathways, and provide implementation of appropriate risk
management and corrective actions.
   (4) Provide design, construction, and operation parameters to
prevent, mitigate, and remediate the creation or activation of
leakage pathways and the migration of carbon dioxide or fluids into
any zone in a manner not authorized by the methodology.
   (5) Minimize fugitive carbon dioxide emissions from carbon dioxide
enhanced oil recovery projects seeking to demonstrate simultaneous
sequestration of injected carbon dioxide.
   (6) Provide for post injection closure and the long-term
responsibility for carbon dioxide sequestered.
   (7) Verify, monitor, account for, and report carbon dioxide
quantities sequestered, injected, recycled, leaked, vented, and in
any other categories as deemed appropriate by the state board.
   (e) The state board shall not quantify any carbon dioxide from an
enhanced oil recovery project seeking to demonstrate simultaneous
sequestration of injected carbon dioxide that is incapable of
transitioning to class VI in accordance with applicable requirements
of the federal Safe Drinking Water Act (42 U.S.C. Sec. 300f et seq.).

   (f) Utilizing existing requirements under federal and state law to
the extent possible, the methodology may include surface and
subsurface characterization, monitoring, operational, reporting,
accounting, and verification requirements and conditions to ensure
the accurate quantification of emissions.
   (g) In adopting the methodology, the state board shall, to the
maximum extent feasible, harmonize the adopted methodology with
greenhouse gas storage or sequestration quantification methodologies
used by other state, federal, or international greenhouse gas
 emission   emissions  reduction programs
if it does not compromise the ability of the methodology to verify
sequestration or accurately quantify emissions.
   (h) This section does not modify, limit, or supersede the
operation of other laws applicable to carbon dioxide capture,
transportation, or underground injection, or their application by the
State Energy Resources Conservation and Development Commission, the
Public Utilities Commission, the Division of Oil, Gas, and Geothermal
Resources, or the California Environmental Protection Agency and its
boards, offices, and departments.
   (i) In adopting the methodology, the state board shall consider
the potential for direct, indirect, and cumulative emission impacts
that may result from carbon capture and storage projects seeking to
demonstrate geologic sequestration.
  SEC. 6.  Section 3239 is added to the Public Resources Code, to
read:
   3239.  (a) Upon the final adoption of a quantification methodology
for carbon capture and storage projects seeking to demonstrate
geologic sequestration of carbon greenhouse gases by the State Air
Resources Board pursuant to Section 38572 of the Health and Safety
Code, the division shall, under its regulatory authority to permit
class II injection wells in the state pursuant to the authority
delegated to the division pursuant to Section 1425 of the federal
Safe Drinking Water Act (42 U.S.C. Sec. 300h-4), and pursuant to
Section 38572 of the Health and Safety Code, regulate the injection
of carbon dioxide at an enhanced oil recovery project seeking to
demonstrate simultaneous geologic sequestration of greenhouse gases
pursuant to the greenhouse gas  emission  
emissions  performance standard under Chapter 3 (commencing with
Section 8340) of Division 4.1 of the Public Utilities Code, under
the mandatory reporting of greenhouse gas emissions pursuant to
Article 2 (commencing with Section 95100) of Subchapter 10 of Chapter
1 of Division 3 of Title 7 of the California Code of Regulations, or
for any regulation implementing a cap-and-trade program or other
market-based compliance mechanism that may be adopted pursuant to the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code).
   (b) Pursuant to subdivision (a), the division and the State Air
Resources Board shall execute an agreement using a coordinated and
comprehensive regulatory approach, including oversight and short-term
and long-term monitoring requirements and verification, for geologic
sequestration of greenhouse gases during and following enhanced oil
recovery operations.
   (c) In developing the regulations pursuant to subdivision (a), the
division shall consider, at a minimum, both of the following:
   (1) Whether long-term successful geologic sequestration may
require adherence to standards and methods exceeding existing
enhanced oil recovery and underground injection control practices and
regulations.
   (2) Whether all hydrocarbon reservoirs, given the diversity of
California's geology, well treatment, and production practices, may
not be suitable for long-term successful geologic sequestration.
   (d) This section does not modify, limit, or supersede any other
law applicable to carbon dioxide capture, transportation, or
underground injection, or its application by the State Energy
Resources Conservation and Development Commission, the Public
Utilities Commission, the division, or the California Environmental
Protection Agency, and its boards, offices, and departments.
  SEC. 7.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to facilitate the sequestration of greenhouse gases as
quickly as possible, it is necessary that this act take effect
immediately.