BILL ANALYSIS
SB 571
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Date of Hearing: June 22, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
SB 571 (Maldonado) - As Introduced: February 27, 2009
SENATE VOTE : 35-0
SUBJECT : Geothermal resources
SUMMARY : Authorizes the State Oil and Gas Supervisor
(Supervisor) to deny proposed geothermal well operations until
an operator complies with an order, pays a civil penalty, or
remedies a violation.
EXISTING LAW :
1)Establishes the Division of Oil, Gas, and Geothermal Resources
within the Department of Conservation (Department).
2)Requires the Supervisor to oversee the drilling, operation,
maintenance and abandonment of oil, gas, and geothermal wells.
An owner or operator of any well is required to obtain
approval from the Supervisor prior to commencing the drilling
of a well.
3)Authorizes the Supervisor to deny proposed oil and gas well
drilling operations if an operator fails to comply with an
order, pay a civil penalty or other fee, or remedy a
violation.
4)Authorizes the Supervisor to order a well to be inspected,
abandoned or redrilled if the well is determined to be
hazardous or idle-deserted.
5)Imposes a civil penalty of $5,000 on any person who violates
policies or regulations governing the management of geothermal
resources
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : According to the author, the Supervisor "?does not
have authority to deny approval of geothermal well operations
proposed by an operator who has failed to comply with an order,
SB 571
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pay civil penalties or well fees, or remedy other violations.
Thus, an out-of-compliance operator may expand operations, and,
therefore, increase opportunities for noncompliance while
continuing to ignore their legal obligations associated with
current operations."
1)Background: California is the largest generator of
electricity from geothermal resources. In 2006, nearly five
percent of the state's electricity was generated from
geothermal resources. This percentage is expected to increase
given generation requirements pursuant to the renewable
portfolio standard. Between 2006 and 2008, the number of well
permits issued by the Department increased 221 percent.
Currently, there are more than 600 active, high-temperature
geothermal wells and 230 injection wells operating in the
state.
While the Department has not witnessed a significant increase
in noncompliant operators, it views this bill as a proactive
measure given the large increase in drilling operations and
the high cost to remediate and restore a well (approximately
$250,000). The author believes that this bill is necessary so
that the state is not forced to assume responsibility to
remediate wells from irresponsible operators.
2)Related legislation : This bill is conceptually similar to AB
291 (Salda?a), which this committee approved on April 13,
2009. AB 291 prohibits the California Coastal Commission from
acting on a coastal development permit application for
development on any property subject to a violation of the
Coastal Act.
3)Proposed amendments : The author has proposed the following
technical amendments:
Page 2, lines 3-6 should be amended to read:
(a) When an operator fails to comply with an order of the
supervisor issued pursuant to Section 3255 this chapter , the
supervisor may deny approval of proposed well operations until
the operator brings existing well operations into compliance
with the order.
Page 2, lines 7-14 should be amended to read:
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(b) When an operator fails to pay a civil penalty imposed
pursuant to Section 3754.5, comply with an order issued under
Section 3753 pursuant to this chapter to remedy or repair a
condition found to be in violation of the chapter, or pay a
charge assessed under Section 3724.5, the supervisor may deny
approval of the operator's proposed well operations until the
operator pays the civil penalty, remedies the violation to the
satisfaction of the supervisor, or pays the charge assessed
under Section 3724.5.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Dan Chia / NAT. RES. / (916) 319-2092