California Legislature—2013–14 Regular Session

Assembly Bill No. 7

Introduced by Assembly Member Wieckowski

December 3, 2012

An act to amend Section 3213 of, and to add Article 3 (commencing with Section 3150) to Chapter 1 of Division 3 of, the Public Resources Code, relating to oil and gas.

LEGISLATIVE COUNSEL’S DIGEST

AB 7, as introduced, Wieckowski. Oil and gas: hydraulic fracturing.

Under existing law, the Division of Oil, Gas, and Geothermal Resources (DOGGR) in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. The State Oil and Gas Supervisor supervises the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field regarding safety and environmental damage. Existing law requires an operator of a well, before commencing the work of drilling the well, to obtain approval from the State Oil and Gas Supervisor or a district deputy. Existing law requires the operator of a well to keep, or cause to be kept, a careful and accurate log, core record, and history of the drilling of the well. Within 60 days after the date of cessation of drilling, rework, or abandonment operations, the owner or operator is required to file with the district deputy certain information, including the history of work performed.

This bill would define, among other things, hydraulic fracturing and hydraulic fracturing fluid. The bill would require an operator of a well to record and include all data on hydraulic fracturing treatment, including the risk posed by potential seismicity, as a part of the history of the drilling of the well. The bill would require DOGGR, in consultation with the Department of Toxic Substances Control, the State Air Resources Board, and the State Water Resources Control Board, on or before January 1, 2014, to adopt rules and regulations specific to hydraulic fracturing, including governing the construction of wells and well casings and full disclosure of the composition and disposition of hydraulic fracturing. The bill would require an operator to file with the supervisor or a district deputy, at least 30 days prior to the commencement of a hydraulic fracturing treatment, a notice of intention to commence hydraulic fracturing treatment containing specified information. The bill would require the hydraulic fracturing to be completed within one year of the filing of the notice of intention. The bill would require DOGGR, within 10 days of the receipt of the notice of intention, to make the notice publicly available, to post it on the division’s Internet Web site, and to notify the appropriate regional water quality control board. The bill would require the supplier, as defined, of the hydraulic fracturing treatment to provide to the operator, within 30 days following the conclusion of the hydraulic fracturing, certain information regarding the hydraulic fracturing fluid. The bill would require the operator, within 60 days of the cessation of hydraulic fracturing treatment, to post or cause to have posted on an Internet Web site accessible to the public specified information on the fracturing and fluid, as specified. The bill would require a supplier claiming trade secret protection for the chemical composition of additives used in the hydraulic treatment to disclose the composition to DOGGR, but would, except as specified, prohibit those with access to the trade secret to disclose it, and a person who violates this prohibition would be guilty of a misdemeanor. Because this bill would create a new crime, it would impose a state-mandated local program.

This bill would require the supervisor, on or before January 1, 2016, and annually thereafter, to transmit to the Legislature and make available publicly a comprehensive report on hydraulic fracturing in the exploration and production of oil and gas resources in the state.

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.  

Article 3 (commencing with Section 3150) is
added to Chapter 1 of Division 3 of the Public Resources Code,
to read:

 

Article 3.  Hydraulic Fracturing

 

3150.  

“Additive” means a substance or combination of
substances added to a base fluid for purposes of preparing a
hydraulic fracturing fluid. An additive may, but is not required to,
serve additional purposes beyond the transmission of hydraulic
pressure to the geologic formation. An additive may be of any
phase and includes proppants.

3151.  

“Base fluid” means the continuous phase fluid used in
the makeup of a hydraulic fracturing fluid. The continuous phase
fluid may include, but is not limited to, water, and may be a liquid
or a gas.

3152.  

“Carrier fluid” means a base fluid into which additives
are mixed to form a hydraulic fracturing fluid.

3153.  

“Hydraulic fracturing” means a treatment used in
stimulating a well that involves the pressurized injection of
hydraulic fracturing fluid and proppants 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.

3154.  

“Hydraulic fracturing fluid” means a carrier fluid mixed
with physical and chemical additives for the purpose of hydraulic
fracturing. A hydraulic fracturing treatment may include more than
one hydraulic fracturing fluid.

3155.  

“Proppants” means materials inserted or injected into
the underground geologic formation that are intended to prevent
fractures from closing.

3156.  

“Supplier” means an entity performing hydraulic
fracturing or an entity supplying an additive or proppant directly
to the operator for use in hydraulic fracturing.

3157.  

(a) The Legislature finds and declares that hydraulic
fracturing of oil and gas wells in combination with technological
advances in oil and gas well drilling are spurring oil and gas
extraction, as well as oil and gas exploration, in California.

(b) (1) On or before January 1, 2014, the division, in
consultation with the Department of Toxic Substances Control,
the State Air Resources Board, and the State Water Resources
Control Board, shall adopt rules and regulations specific to
hydraulic fracturing. The rules and regulations shall include, but
are not limited to, revisions, as needed, to the rules and regulations
governing construction of wells and well casings to ensure integrity
of wells, well casings, and the geologic and hydrologic isolation
of the oil and gas formation during and following hydraulic
fracturing, and full disclosure of the composition and disposition
of hydraulic fracturing fluids.

(2) Full disclosure of the composition and disposition of
hydraulic fracturing fluids shall, at a minimum, include:

(A) The date of the hydraulic fracturing.

(B) A complete list of the names, Chemical Abstract Service
(CAS) numbers, and maximum concentration, in percent by mass,
of each and every chemical constituent of the hydraulic fracturing
fluids used. If a CAS number does not exist for a chemical
constituent, the well owner or operator may provide another unique
identifier, if available. Chemical information claimed as a trade
secret, pursuant to subdivision (h), shall be identified as such and
reported as described in subdivision (h).

(C) The trade name, the supplier, and a brief description of the
intended purpose of each additive contained in the hydraulic
fracturing fluid.

(D) The total volume of carrier fluid used during hydraulic
fracturing, and the identification of whether the carrier fluid is
water suitable for irrigation or domestic purposes, water not
suitable for irrigation or domestic purposes, or a fluid other than
water.

(E) The total volume of base fluid, if not reported as a carrier
fluid, used during hydraulic fracturing, and the identification of
whether the base fluid is water suitable for irrigation or domestic
purposes, water not suitable for irrigation or domestic purposes,
or a fluid other than water.

(F) The source, volume, and disposition of all water, including,
but not limited to, all water used as base and carrier fluids, used
during hydraulic fracturing and recovered from the well following
hydraulic fracturing that is not otherwise reported as produced
water pursuant to Section 3227.

(G) The disposition of all hydraulic fracturing fluids other than
water.

(H) Any radiological components or tracers injected into the
well as part of the hydraulic fracturing process, a description of
the recovery method, if any, for those components or tracers, the
amount recovered, if any, and the disposal method for recovered
components or tracers.

(I) The radioactivity of the recovered hydraulic fracturing fluids.

(J) The location of the portion of the well subject to the hydraulic
fracturing treatment and the extent of the fracturing surrounding
the well induced by the treatment using the methodology
determined by the division.

(c) (1) Notwithstanding any other law or regulation, at least 30
days prior to commencing a hydraulic fracturing treatment on a
well, the operator shall file a written notice of intention to
commence the hydraulic fracturing treatment with the supervisor
or district deputy. The notice shall contain the pertinent data the
supervisor requires on printed forms supplied by the division or
on other forms acceptable to the supervisor. The hydraulic
fracturing treatment shall be completed within one year of filing
the notice of intention. The information provided in the notice
shall include, but is not limited to, the following:

(A) The well identification number and location.

(B) The time period during which the hydraulic fracturing
treatment is planned to occur.

(2) Within 10 days of receipt of the notice of intention, the
division shall make the notice of intention publicly available, post
it on the publicly accessible portion of the division’s Internet Web
site, and notify the appropriate regional water quality control board
or boards as determined by where the well, including its subsurface
portion, is located.

(3) The operator shall provide notice to the division 72 hours
prior to the actual start of the hydraulic fracturing treatment in
order for the division to witness the treatment.

(d) If hydraulic fracturing is performed on a well, a supplier
that performs any part of hydraulic fracturing or provides additives
directly to the operator for hydraulic fracturing shall furnish the
operator with information needed for the operator to comply with
subdivision (e). If a supplier claims trade secret protection pursuant
to subdivision (h), the supplier shall notify the operator and provide
to the operator substitute information, as described in subdivision
(h), suitable for public disclosure. This information shall be
accurate and shall be provided as soon as possible but no later than
30 days following the conclusion of the hydraulic fracturing.

(e) (1) Within 60 days following cessation of hydraulic
fracturing on a well, the operator shall post or cause to have posted
to an Internet Web site designated or maintained by the division
and accessible to the public, all of the hydraulic fracturing fluid
composition and disposition information required to be collected
pursuant to rules and regulations adopted under subdivision (b),
including well identification number and location.

(2) The division may designate a publicly accessible Internet
Web site, developed by the Ground Water Protection Council and
the Interstate Oil and Gas Compact Commission for the posting
of the data pursuant to paragraph (1), if all of the following
requirements are met by January 1, 2015:

(A) The information is organized on that Internet Web site in a
format such as a spreadsheet that allows the public to easily search
and aggregate, to the extent practicable, each type of information
required to be collected pursuant to subdivision (b) using search
functions on that Internet Web site.

(B) The Internet Web site permits any person to export, copy,
or otherwise obtain in electronic format the data submitted pursuant
to subdivision (b) from that Internet Web site. Once obtained, there
shall be no restrictions on the possession or further distribution,
modification, transmission, or reproduction of any information
submitted pursuant to this section in any form and by any means
and no prior authorization shall be required.

(3) If an Internet Web site is not designated by the division
pursuant to paragraph (2), the division shall maintain a publicly
accessible Internet Web site, in compliance with subparagraphs
(A) and (B) of paragraph (2), for the posting of the data required
pursuant to paragraph (1).

(f) The operator is responsible for compliance with this section.

(g) In developing regulations for hydraulic fracturing pursuant
to subdivision (b), the supervisor shall take into consideration and
document the risk posed by potential seismicity.

(h) (1) The supplier may claim trade secret protection for the
chemical composition of additives pursuant to Section 1060 of the
Evidence Code, or the Uniform Trade Secrets Act (Title 5
(commencing with Section 3426) of Part 1 of Division 4 of the
Civil Code).

(2) If a supplier believes that information regarding a chemical
constituent of a hydraulic fracturing fluid is a trade secret, the
supplier shall nevertheless disclose the information to the division
within 30 days following cessation of hydraulic fracturing on a
well, and shall notify the division in writing of that belief.

(3) The supplier is not required to disclose trade secret
information to the operator.

(4) This subdivision does not permit a supplier to refuse to
disclose the information required pursuant to this section to the
division.

(5) To comply with the public disclosure requirements of this
section, the supplier shall indicate where trade secret information
has been withheld and the specific name of a chemical constituent
shall be replaced with the chemical family name or similar
descriptor associated with the trade secret chemical information.

(6) (A) Except as provided in subparagraph (B) of paragraph
(8), the division shall protect from disclosure any trade secret
designated as such by the supplier, if that trade secret is not a public
record.

(B) Except as provided in subparagraph (B) of paragraph (8),
information claimed as trade secret is not a public record for
purposes of Chapter 9.6 (commencing with Section 3250) of
Division 4 of Title 1 of the Government Code.

(7) The supplier shall notify the division in writing within 30
days of any changes to information provided to the division to
support a trade secret claim.

(8) Upon receipt of a request for the release of information to
the public, which includes information the supplier has notified
the division is a trade secret and is not a public record, the
following procedure applies:

(A) The division shall notify the supplier of the request in
writing by certified mail, return receipt requested.

(B) The division shall release the information to the public, but
not earlier than 60 days after the date of mailing the notice of the
request for information, unless, prior to the expiration of the 60-day
period, the supplier obtains an action in an appropriate court for a
declaratory judgment that the information is subject to protection
or for a preliminary injunction prohibiting disclosure of the
information to the public and provides notice to the division of
that action.

(9) Except as provided in subparagraph (B) of paragraph (8),
trade secret information is not a public record and shall not be
disclosed to anyone except to an officer or employee of the
division, the state, or the United States, in connection with the
official duties of that officer or employee, to a health professional,
under any law for the protection of health, or to contractors with
the division or the state and its employees if, in the opinion of the
division, disclosure is necessary and required for the satisfactory
performance of a contract, for performance of work, or to protect
health and safety.

(10) Except as provided in subparagraph (B) of paragraph (8),
an officer or employee of the division or former officer or employee
who, by virtue of that employment or official position, has
possession of, or has access to, any trade secret subject to this
section, and who, knowing that disclosure of the information to
the general public is prohibited by this section, knowingly and
willfully discloses the information in any manner to any person
not entitled to receive it, is guilty of a misdemeanor. A contractor
of the division and any employee of the contractor who has been
furnished information as authorized by this section shall be
considered an employee of the division for purposes of this section.

(11) In the event of exposure to hydraulic fracturing fluids
necessitating medical care, the person receiving the care shall have
the right to petition the division to disclose relevant trade secret
information in order to receive appropriate medical care.

(i) This section does not apply to routine tests to monitor the
integrity of wells and well casings.

(j) A well granted confidential status pursuant to Section 3234
shall not be required to comply with the public disclosure of
hydraulic fracturing fluids pursuant to subdivision (e) until the
confidential status of the well ceases.

(k) (1) Whenever it appears that any person is violating or
threatening to violate any provision of this section, the supervisor
may bring suit against the person in the superior court of any
county where the violation occurs or is threatened, to restrain the
person from continuing the violation or from carrying out the threat
of violation. Upon the filing of the suit, summons issued to the
person may be directed to the sheriff or his or her deputies. In the
suit, the court has jurisdiction to grant to the supervisor any final
prohibitory and mandatory injunctions that the facts warrant.

(2) If the supervisor fails to bring suit to enjoin a violation or
threatened violation of any provision of this section, or any rule,
regulation, or order of the supervisor within 30 days after receipt
of written request to do so by any person who is or will be
adversely affected by the violation, the person making the request
may bring suit in the person’s own behalf to restrain the violation
or threatened violation in any court in which the supervisor might
have brought suit. If in the suit, the court holds that injunctive
relief should be granted, the supervisor shall be made a party and
shall be substituted for the person who brought the suit, and the
injunction shall be issued as if the supervisor had at all times been
the plaintiff.

(3) A civil action for damages shall not lie against any person
for the violation of this section or any rule, regulation, or order of
the supervisor issued to implement or enforce this section. If the
supervisor brings a suit or action pursuant to paragraph (1), a
defendant or intervenor shall not cross-complain or otherwise bring
an action in the same proceeding against any other person for
damages or for any other purpose.

3158.  

(a) Within 60 days after the date of cessation of
hydraulic fracturing, the owner or operator shall file with the
district deputy, in a form approved by the supervisor, true copies
of the log, core record, and history of work performed, and, if
made, true and reproducible copies of all electrical, physical, or
chemical logs, tests, or surveys. Upon a showing of hardship, the
supervisor may extend the time within which to comply with this
section for a period not to exceed 60 additional days.

(b) The supervisor shall include information provided pursuant
to subdivision (e) of Section 3157 on existing publicly accessible
maps on the division’s Internet Web site, and make the information
available such that hydraulic fracturing and related information
are associated with each specific well. If data are reported on an
Internet Web site not maintained by the division pursuant to
paragraph (2) of subdivision (e) of Section 3157, the division shall
provide electronic links to that Internet Web site. The public shall
be able to search and sort the hydraulic fracturing and related
information by at least the following criteria:

(1) Geographic area.

(2) Additive.

(3) Chemical constituent.

(4) Chemical Abstract Service number.

(5) Time period.

(6) Operator.

(c) On or before January 1, 2016, and annually thereafter, the
supervisor shall prepare and transmit to the Legislature a
comprehensive report on hydraulic fracturing in the exploration
and production of oil and gas resources in California. The report
shall include aggregated data of all of the information required to
be reported pursuant to Section 3157 reported by district, county,
and operator. The report also shall include relevant additional
information, as necessary, including, but not limited to, all the
following:

(1) Aggregated data detailing the disposition of any produced
water from wells that have undergone hydraulic fracturing.

(2) Aggregated data detailing the names and locations of seismic
faults within a distance from the well bore in any direction equal
to five times the fracture zone length and the names and locations
of seismic faults whose movement is reasonably anticipated to
impact the integrity of the well, well casing, and oil and gas
formation.

(3) The number of emergency responses to a spill or release.

(4) Aggregated data detailing the number of times trade secret
information was not provided to the public, by county and by each
company, in the preceding year.

(5) Data detailing the loss of well and well casing integrity in
the preceding year for wells that have undergone hydraulic
fracturing treatment. For comparative purposes, data detailing the
loss of well and well casing integrity in the preceding year for all
wells shall also be provided. The cause of each well and well casing
failure, if known, shall also be provided.

(d) The report shall be made publicly available and an electronic
version shall be available on the division’s Internet Web site.

(e) (1) The requirement for submitting a report imposed under
subdivision (c) is inoperative on January 1, 2020, pursuant to
Section 10231.5 of the Government Code.

(2) A report to be submitted pursuant to subdivision (c) shall
be submitted in compliance with Section 9795 of the Government
Code.

SEC. 2.  

Section 3213 of the Public Resources Code is amended
to read:

3213.  

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, and the results of production and other tests during
drilling operations. begin insert All data on hydraulic fracturing treatments end insert
begin insert pursuant to Section 3157 shall be recorded in the history. end insert

SEC. 3.  

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.