BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                AB 591

                        Senator S. Joseph Simitian, Chairman
                              2011-2012 Regular Session
           BILL NO:    AB 591
           AUTHOR:     Wieckowski
           AMENDED:    May 27, 2011
           FISCAL:     Yes               HEARING DATE:     June 27, 2011
           URGENCY:    No                CONSULTANT:       Peter Cowan

            SUMMARY  :    
            Existing law  :

           1) Establishes the Division of Oil, Gas, and Geothermal 
              Resources (DOGGR) within California's Department of 
              Conservation and grants its Supervisor (supervisor) broad 
              authority over activities related to the recovery of oil 
              and gas (Public Resources Code §3106). 

           2) Authorizes the supervisor to publish any publications, 
              reports, maps, or other printed matter relating to oil and 
              gas, for which there may be public demand (§3109).

           3) Requires the owner or operator of any oil and gas well to 
              keep, or cause to be kept, a careful and accurate log, core 
              record, and history of the drilling of the well which must 
              periodically be reported to DOGGR (§3210 et seq.).

           4) Under the federal Safe Drinking Water Act (SDWA) requires 
              the US Environmental Protection Agency (EPA) to set minimum 
              federal requirements for all below ground injection 
              processes, but excludes natural gas storage and hydraulic 
              fracturing injections (unless they contain diesel fuels).

           5) Authorizes Regional Water Quality Control Boards (RWQCBs) 
              to regulate evaporation ponds that are near or above usable 
              groundwater (Water Code §13260 et seq.).

            This bill  : 


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           1) Requires those who carry out the hydraulic fracturing of a 
              well to provide to the well's owner or operator a complete 
              list of the chemical constituents used in the hydraulic 
              fracturing fluid and all of the associated standardized 
              Chemical Abstract Service (CAS) identification numbers.

           2) Requires that the history of drilling at the well provided 
              to DOGGR be modified to include: the source and amount of 
              water used in the exploration or production of the well, a 
              description of the use, recovery and disposal of any 
              radiological components or tracers injected into the well, 
              and if hydraulic fracturing is used, disclose the chemical 
              information data described above.

           3) Clarifies the reporting requirements of the owner or 
              operator of the well to DOGGR of the history of work 
              performed at the well including copies of all appropriate 
              logs, tests or surveys performed and the hydraulic 
              fracturing data described above.

           4) Requires DOGGR to make the hydraulic fracturing data 
              collected publicly available on its own website on a 
              well-by-well basis.

            COMMENTS  :

            1) Purpose of Bill .  According to the author AB 591 "will 
              serve to provide the public, property owners, and water 
              purveyors with important information regarding what 
              chemicals are to be injected into wells and the source and 
              amount of water used in the İhydraulic fracturing ] 
              process.  İAB 591] is intended to keep regulators ahead of 
              the increased use of hydraulic fracturing so that we don't 
              experience water quality and other problems that have 
              occurred in states including Pennsylvania, New York, Texas, 
              and Wyoming."

            2) Hydraulic fracturing  , or "fracking" is a well treatment for 
              increasing oil or gas (hydrocarbon) recovery.  As the name 
              implies the hydraulic fluid is pumped at immense pressure 
              into a well where it escapes through perforations in the 
              well lining and causes the surrounding rock to fracture.  


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              The "fracturing fluid" is comprised primarily of water with 
              a small fraction of other chemicals as well as a proppant 
              such as sand that hold fractures open after they've been 
              created.  These cracks or fractures allow oil and natural 
              gas to flow more freely into the well where they are pumped 
              to the surface.  Depending on the type of well and the 
              target rock formation being fractured, the quantity and 
              constituents chemicals and proppants will vary. According 
              to the EPA as much as two to five million gallons of water 
              are used to conduct the hydraulic fracturing treatment.  

               Typically conducted after the initial well drilling or when 
              a well is reworked, hydraulic fracturing is common practice 
              in both vertical wells where the bore goes straight down 
              into the target rock layer and in horizontal bores where 
              the well turns and runs horizontally though the target rock 
              strata for as much as several thousand feet.  Recent 
              advances in the use of hydraulic fracturing and horizontal 
              drilling have made shale gas recovery and coal bed methane 
              recovery much more economical.  As a result areas such as 
              Pennsylvania, Texas, and Wyoming have seen dramatic 
              increases in well applications and the use of hydraulic 

           3) Use in California  .  Currently DOGGR does not track 
              hydraulic fracturing activities, thus the full extent of 
              its use is unknown.  However, according to oil and gas 
              industry experts, hydraulic fracturing has been used in 
              California for several decades. Wells in Kern, Ventura, 
              Santa Barbara and Los Angeles counties, and potentially 
              other counties have been hydraulically fractured. Industry 
              reports suggest that hydraulic fracturing will most likely 
              increase statewide.  The Monterey shale formation, which 
              stretches from Northern to Southern California, is 
              receiving increasing attention. Several oil companies have 
              purchased leases covering several hundreds of thousands of 
              acres to drill the Monterey shale.  According to industry 
              experts and a 2008 Society of Petroleum Engineers (SPE) 
              article, hydraulic fracturing has potential to increase 
              output from many Northern California gas reservoirs 
              including gas sands.  If these investments produce positive 
              returns, the state could see a proliferation of hydraulic 


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              fracturing operations in the near future. However, at least 
              one drilling location in Monterey County has already 
              generated significant community concern and opposition.  

            4) Current regulation  . The below ground injection of most 
              chemicals is subject to the minimum regulations of SDWA and 
              are permitted through the underground injection control 
              program to ensure that "Injection well owners and operators 
              may not site, construct, operate, maintain, convert, plug, 
              abandon, or conduct any other injection activity that 
              endangers underground source of drinking water."
               The federal Energy Policy Act of 2005 modified SDWA to 
              exclude "the underground injection of fluids or propping 
              agents (other than diesel fuels) pursuant to hydraulic 
              fracturing operations related to oil, gas, or geothermal 
              production activities" from the definition of "underground 
              injection".  Nonetheless a congressional investigation 
              found that between 2005 and 2009 26,466 gallons of 
              hydraulic fracturing fluids containing diesel were injected 
              into California wells, yet no underground injection permits 
              had been sought or granted for this activity, in apparent 
              violation of SDWA.

              On February 16, 2011, in reply to an inquiry from Senator 
              Pavley the DOGGR supervisor acknowledged that DOGGR had no 
              reliable information on the extent of hydraulic fracturing 
              activities in California and has imposed no reporting or 
              permitting requirements on the practice despite the clear 
              regulatory authority to do so.

            5) Fracturing fluid  .  As indicated above, in many instances, 
              the fluids used in hydraulic fracturing are water-based. 
              There are some formations, however, that are not fractured 
              effectively by water-based fluids because clay or other 
              substances in the rock absorb water. For these formations, 
              complex mixtures with a multitude of chemical additives may 
              be used to thicken or thin the fluids, improve the flow of 
              the fluid, or even kill bacteria that can reduce fracturing 

              According to a congressional report, between 2005 and 2009, 


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              oil and gas companies throughout the United States used 
              hydraulic fracturing products containing 29 chemicals that 
              are: (a) known or possible human carcinogens, (b) regulated 
              under the SDWA for their risk to human health, or (c) 
              listed as hazardous air pollutants under the Clean Air Act. 
              In some cases, companies injected fluids containing 
              chemicals that they themselves could not identify as they 
              did not have access to proprietary information about 
              products purchased "off the shelf" from chemical suppliers. 
               Fracturing fluids may also contain radiological tracers 
              used to determine well integrity and the extent of the rock 

              Currently no disclosure of the quantities or constituents 
              of the fracturing fluids is required.  AB 591 requires that 
              a list of chemical constituents be supplied to DOGGR and 
              that DOGGR post that information on its webpage.  However, 
              AB 591 does not require reporting of the total amount of 
              fracturing fluid used.  While the chemical constituents 
              list provides information about the type of risks posed, it 
              does not indicate the potential magnitude of that risk.  A 
              more protective reporting requirement would at the very 
              least provide the total quantity of non-water fracturing 
              fluid and a ranked list of the fluid constituents.

            6) Risks to below ground aquifers  .  The risk to fresh water 
              aquifers is difficult to estimate without information about 
              the depth of local aquifers and the hydrocarbon bearing 
              strata.  In some cases the strata being fractured is 
              several thousand feet below fresh water aquifers, in others 
              the target strata are located closer to usable aquifers.  
              In fields that are heavily, developed if the cap rock 
              separating the hydrocarbons from the aquifer are heavily 
              perforated by wells the likelihood of fracturing fluid 
              migration to the aquifer may be increased.   

               A more likely contamination scenario is a well failure, 
              either in the well casing or due to inadequate cementing.  
              DOGGR does have a regulatory program that governs well 
              casing construction. Despite regulations, well failures 
              still occur. A 2000 SPE article regarding an oil field in 


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              Kern County explained that "the well failure rate, although 
              lower than that experienced in the 1980s, is still 
              economically significant at 2 to 6% of active wells per 
              year."  Furthermore, a recent area of review evaluated by 
              DOGGR in Southern California found that 20 of 228 wells 
              needed remediation.

            7) Water source  .  Given the large amounts of water necessary 
              to hydraulically fracture a single well and the likelihood 
              that it will become contaminated, it is important for the 
              state to track the use of fresh water.  AB 591 requires 
              annual reporting of the quantity and source water used at a 

           8) Waste water disposal  .  Following a hydraulic fracturing 
              treatment some, but not all of the fracturing fluid is 
              "flowed back" to the surface. (estimates range from 
              15-80%).  Additional fluid may be removed from the well 
              with "produced water" once the well goes into production.  
              In addition to chemicals contained in the fracturing fluid 
              initially, this water may be further contaminated with 
              naturally occurring radioactive materials, heavy metals 
              such as mercury and arsenic, or chemicals such as benzene.  
              The amounts of produced water are reported on monthly 
              basis, but it is not clear that "flowed back" water is 
              reported as the majority occurs before the well goes into 

              Water may be disposed of by injection into waste disposal 
              wells, recycled for subsequent hydraulic fracturing 
              activities or evaporated in lined ponds.  According to the 
              RWQCBs the use of evaporation ponds has become less common 
              with reinjection being favored.  Given the large volumes of 
              wastewater and the potential severity of its contamination 
              the Committee should require additional reporting of the 
              quantities and fate of water removed from wells that have 
              been hydraulically fractured.

            9) Recent budget actions  . DOGGR has been relatively 
              underfunded in recent years, given its extensive 


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              obligations, responsibilities and changing oil and gas 
              recovery technology.  To help rectify this and improve 
              DOGGR's regulatory program activities, the Legislature 
              approved 17 new positions in the 2010 - 2011 budget year.  
              According to the Legislative Analyst's Office, these 
              positions have only recently been filled and it is not yet 
              possible to evaluate how these additional staff will impact 
              DOGGR's performance. Nevertheless in the 2011 - 2012 budget 
              year, the Department of Conservation requested an 
              additional 36 positions to improve DOGGR's environmental 
              compliance, underground injection control and construction 
              site review. Eighteen positions and an additional $2.3 
              million were approved in the relevant Budget sub-committees 
              of both houses. Additional budget control language was 
              approved in the Assembly sub-committee's agenda to express 
              the intent of the Legislature that some of the funds 
              appropriated be used to collect and disseminate information 
              to the public regarding hydraulic fracturing activities in 

            10)Amendments needed  . 

              a)    As discussed in the Senate Committee on Natural 
                 Resources and Water, amendments are needed: 

                 i)         To define "Hydraulic fracturing" to mean: a 
                      technique used in preparing a well that typically 
                      involves the pressurized injection of water and a 
                      mix of chemicals, compounds and materials into an 
                      underground geologic formation in order to fracture 
                      the formation, thereby causing or enhancing, for 
                      the purposes of this division, the production of 
                      oil or gas from a well.

                 ii)        To require DOGGR to prepare an annual report 
                      on hydraulic fracturing activities beginning 
                      January 1, 2013.

                 iii)        To delete "paragraph (1) of" on Page 7, line 


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              b)    An amendment is needed to add the hydraulic 
                 fracturing of a well to the list of actions that 
                 initiate the 60 day reporting clock and to clarify that 
                 any of those activities start the reporting clock.

              c)    An amendment is needed to require reporting of the 
                 amount of waste water removed from the well, from the 
                 initiation of drilling, and how it is disposed as 
                 discussed in comment #8.

            SOURCE  :        Environmental Working Group  

           SUPPORT  :       Board of Supervisors of the County of Los 
                          Angeles, California League of Conservation 
                          Voters, Clean Energy, Clean Water Action, 
                          Environment California, Food and Water Watch, 
                          Natural Resources Defense Council, Sierra Club 
                          California, Water Replenishment District of 
                          Southern California.
           OPPOSITION  :    None on file.