Amended in Assembly May 31, 2013

Amended in Assembly May 28, 2013

Amended in Assembly April 30, 2013

Amended in Assembly April 8, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 7

Introduced by Assembly Member Wieckowski

December 3, 2012

An act to amend Sections begin insert 3108, end insert 3203, 3213, and 3215 of, to add begin delete Section end delete begin insert Sections 3017, 3203.1, 3203.2, end insert begin insert and end insert 3215.5 to, 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 amended, Wieckowski. Oil and gas: hydraulic fracturing.

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Under

end delete

begin insert (1) end insert begin insert   end insert begin insert Under end insert existing law, the Division of Oil, Gas, and Geothermal Resources, or the division, 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 begin delete Supervisor, or the supervisor, end delete begin insert Supervisor end insert 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 file with the supervisor or the district deputy a written notice of intention to commence drilling, and prohibits the commencement of drilling until approval is given by the supervisor or the 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 revise that procedure to instead require the operator to file an application before commencing drilling and would prohibit drilling until approval or denial of the application is given by the supervisor or district deputy within 30 working days. The bill would require, on and after January 1, 2014, additional information to be included in the application, including information regarding the chemicals, if any, to be injected into a well. begin insert This bill would additionally require the operator prior to drilling, redrilling, or deepening operations to submit proof to the supervisor that the applicable regional water quality control board has approved the disposal method and location of wastewater disposal for the well. end insert

This bill would define, among other things, hydraulic fracturing and hydraulic fracturing fluid. The bill would require the owner or operator of a well to provide to the supervisor, or to arrange with the supplier to provide to the supervisor, specific information relating to hydraulic fracturing as a part of the history of the drilling of the well. The bill would, on or before January 1, 2015, require the division, in consultation with the Office of Environmental Health Hazard Assessment and the Department of Toxic Substances Control, to establish a process through which all chemicals used in hydraulic fracturing treatments may be studied or reviewed. The bill would provide that a supplier who provides information to the supervisor relating to hydraulic fracturing may, at the time of submission, submit to the supervisor a claim in writing that some or all of the information is protected trade secret information, 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 the division, in conjunction with a hydraulic fracturing treatment notice, but would, except as specified, prohibit those with access to the trade secret from disclosing it. 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, 2014, and annually thereafter, to transmit to the Legislature a comprehensive report on hydraulic fracturing in the exploration and production of oil and gas resources in the state, as specified.

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(2) Existing law requires the supervisor, on or before the first day of October of each year, to make public a report on specified information.

end insert begin insert

This bill would additionally require the supervisor to include information on the origin and total amount of freshwater used in each county for the production of oil and gas production, the disposal of wastewater from oil and gas production in each county, and the well casing failures in each county.

end insert begin insert

This bill would require the operator of a well, at least 30 days prior to commencing a hydraulic fracturing treatment, as defined, to provide a copy of the approved hydraulic fracturing treatment permit to every surface property owner. The bill would authorize those property owners to request the applicable regional water quality control board to perform water quality sampling and testing on any water well suitable for drinking or irrigation purposes, as specified. The bill would require a notice of intent to drill, rework, or deepen a well where hydraulic fracturing will occur to include specified information. Because a violation of these requirements is a crime, this bill would impose a state-mandated local program.

end insert begin delete

The

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begin insert (3) end insert begin insert   end insert begin insert The end insert 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) Hydraulic fracturing has been used in California for several
decades to extract oil and gas and is likely to be used more
extensively as the industry seeks to develop additional oil-bearing
and gas-bearing formations.

(b) The Division of Oil, Gas, and Geothermal Resources in the
Department of Conservation, which has the obligation to protect
public health and the natural resources of the state, including
groundwater resources, has the authority to regulate all oil and
natural gas drilling in the state, but currently does not require the
disclosure of pertinent information regarding hydraulic fracturing
or ascertain all specific types of production and exploration taking
place at permitted wells.

(c) Given California’s geologic, seismic complexity, and its
finite and significantly compromised water resources, it is
important to collect basic information about natural resource
production processes. The state and the public should know when
and where hydraulic fracturing is occurring and what chemicals
are being used in the process.

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begin insert SEC. 2. end insert   

end insert

begin insert Section 3017 is added to the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

begin insert

begin insert 3017. end insert   

“Hydraulic fracturing” means a well stimulation
treatment that may include the application of hydraulic fracturing
fluids into an underground geologic formation in order to create
fractures in the formation, thereby causing or improving the
production of oil or gas from a well.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 3108 of the end insert begin insert Public Resources Code end insert begin insert is amended
to read: end insert

3108.  

begin insert (a) end insert begin insert   end insert 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 showing:

begin delete

(a)

end delete

begin insert ( end insert begin insert 1) end insert  The total amounts of oil and gas produced in each county
in the state during the previous calendar year.

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(b)

end delete

begin insert (2) end insert  The total cost of the division for the previous fiscal year.

begin delete

(c)

end delete

begin insert (3) end insert  The total amount delinquent and uncollected from any
assessments or charges levied pursuant to this chapter.

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(4) The origin and total amount of freshwater used in each
county for oil and gas production during the previous calendar
year.

end insert begin insert

(5) The surface and underground destinations and total amount
of disposed wastewater from oil and gas production in each county
during the previous calendar year.

end insert begin insert

(6) The total number of well casing failures in each county, the
exact location of these wells, the reason for the failures, and at
what point the failures occurred, such as during well completion,
well stimulation, or well production, during the previous calendar
year.

end insert begin delete

The

end delete

begin insert (b) end insert begin insert   end insert begin insert The end insert report shall also include begin delete such end delete other information as the
supervisor deems advisable.

begin delete SEC. 2. end delete
begin insert SEC. 4. end insert   

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.  

“Chemical Abstracts Service” means the division of the
American Chemical Society that is the globally recognized
authority for information on chemical substances.

3151.  

“Chemical Abstracts Service (CAS) number” means the
unique identification number assigned to a chemical by the
Chemical Abstracts Service.

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3152.  

“Hydraulic fracturing” is a well stimulation treatment
that may include the application of hydraulic fracturing fluids into
an underground geologic formation in order to create fractures in
the formation, thereby causing or improving the production of oil
or gas from a well.

end delete

3153.  

“Hydraulic fracturing fluid” includes water or other
carrier fluids that may be mixed with physical and chemical
additives for the purpose of hydraulic fracturing. The additives
may, but are not required to, serve additional purposes beyond the
transmission of hydraulic pressure to the geologic formation.
Additives may be of any phase and may include proppants.

3154.  

 “Proppants” are materials inserted or injected into the
formation that are intended to prevent newly created or enhanced
fractures from closing.

3155.  

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

3156.  

If hydraulic fracturing is performed on a well, the owner
or operator of the well shall provide to the supervisor, or shall
arrange with the supplier to provide to the supervisor, and shall
include in the well history maintained pursuant to Section 3213,
all of the following information, except for information claimed
as a trade secret pursuant to subdivision (c) of Section 3203:

(a) A complete list of the chemical constituents formulated for
use in the hydraulic fracturing fluid that is injected into the well
and each chemical’s associated CAS numbers. Where the CAS
number does not exist, the operator or supplier may provide another
unique identifier where available.

(b) The purpose of each additive contained in the hydraulic
fracturing fluid.

(c) The estimated total amount of the additives in the hydraulic
fracturing fluid.

(d) The estimated maximum concentration of each chemical
constituent in the additive as disclosed on a material safety data
sheet in the hydraulic fracturing fluid expressed as a percentage
by mass.

(e) The estimated maximum concentration of each chemical
constituent disclosed on a material safety data sheet in the hydraulic
fracturing fluid, expressed as a percentage by mass.

(f) The amount and source of any water suitable for irrigation
or domestic purposes used to conduct the hydraulic fracturing
treatment of the well.

(g) The amount and disposition of water and hydraulic fracturing
fluid recovered from each well where hydraulic fracturing occurred
prior to the reporting of the water produced pursuant to Section
3227.

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

3157.  

On or before January 1, 2015, the division, in
consultation with the Office of Environmental Health Hazard
Assessment and the Department of Toxic Substances Control, shall
establish a process through which all chemicals used in hydraulic
fracturing treatments may be studied or reviewed, a list containing
any restricted or prohibited toxic chemicals, and a list containing
any restricted or prohibited locations deemed extremely vulnerable
to a spill or release of chemicals.

begin delete SEC. 3. end delete
begin insert SEC. 5. end insert   

Section 3203 of the Public Resources Code is amended
to read:

3203.  

(a) The operator of any well, before commencing the
work of drilling the well, shall file with the supervisor or the district
deputy an application to commence drilling. Drilling shall not
commence until approval or denial of the application is given by
the supervisor or the district deputy within 30 working days. If
operations have not commenced within one year of receipt of the
application, the application shall be deemed canceled. The
application shall contain the pertinent data the supervisor requires
on printed forms supplied by the division or on other forms
acceptable to the supervisor. The supervisor may require other
pertinent information to supplement the application.

(b) (1) On and after January 1, 2014, in addition to the
information required in the application under subdivision (a), the
application shall additionally include all of the following
information:

(A) The type of exploration and production techniques that the
operator will use at the well or wells.

(B) A complete list of the chemicals, if any, that will be injected
into the well for hydraulic fracturing or other production
enhancement methods in the exploration or production process or
processes. This list of chemicals shall include all of the following
information:

(i) The name of the chemical.

(ii) The purpose of the chemical in the production or exploration
process.

(iii) The Chemical Abstract Service numbers for the chemical.

(iv) The estimated total amount of the chemical used.

(2) If any of the information required pursuant to paragraph (1)
changes over the course of the exploration and production process,
the operator shall immediately notify the supervisor.

(c) (1) A 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
in conjunction with a hydraulic fracturing treatment notice, if not
previously disclosed, 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) 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.

(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 commences 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) (A) 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, local air districts, 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.

(B) A health professional may share trade secret information
with other persons as may be professionally necessary, including,
but not limited to, the patient and other health professionals.
Confidentiality of the trade secret information shall be maintained.
The holder of the trade secret may request a confidentiality
agreement consistent with the requirements of this subdivision to
whom this information is disclosed as soon as circumstances
permit. If necessary, a procedure for timely disclosure by the
division in the event of an emergency shall be identified.

(10) For the purposes of this subdivision, the definitions
provided in Article 3 (commencing with Section 3150) shall apply
when appropriate.

(d) After the completion of any well, this section also applies,
as far as it may be applied, to the deepening or redrilling of the
well, an operation involving the plugging of the well, or any
operations permanently altering in any manner the casing of the
well. The number or designation of a well, and the number or
designation specified for a well in an application filed as required
by this section, shall not be changed without first obtaining a
written consent of the supervisor.

(e) If an operator fails to comply with an order of the supervisor,
the supervisor may deny approval of proposed well operations
until the operator brings its existing well operations into
compliance with the order. If an operator fails to pay a civil penalty,
remedy a violation that it is required to remedy to the satisfaction
of the supervisor pursuant to an order issued under Section 3236.5,
or to pay any charges assessed under Article 7 (commencing with
Section 3400), the supervisor may deny approval to 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 charges assessed under Article 7 (commencing with Section
3400).

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

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(g) Prior to the approval of the commencement of any drilling,
redrilling, or deepening of a well, the operator shall submit written
proof to the supervisor that a waste discharge report has been
filed with the applicable regional water quality control board
pursuant to Section 13260 of the Water Code for the disposal of
the wastewater for the well.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 3203.1 is added to the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

begin insert

begin insert 3203.1. end insert   

(a) At least 30 days prior to commencing a hydraulic
fracturing treatment, the operator shall provide a copy of the
approved hydraulic fracturing treatment permit to every surface
property owner.

(b) (1) A property owner notified pursuant to subdivision (a)
may request the applicable regional water quality control board
to perform water quality sampling and testing on any water well
suitable for drinking or irrigation purposes and on any surface
water suitable for drinking or irrigation purposes as follows:

(A) Baseline measurements prior to the commencement of the
hydraulic fracturing treatment.

(B) Followup measurements after the hydraulic fracturing
treatment on the same schedule as the pressure testing of the well
casing of the hydraulically fractured well.

(2) The regional water quality control board may contract with
an independent third party that adheres to board-specified
standards and protocols to perform the water sampling and testing.

(3) The regional water quality control board shall retain and
archive sufficient samples collected pursuant to this subdivision
to permit a reasonable number of additional analyses.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 3203.2 is added to the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

begin insert

begin insert 3203.2. end insert   

A notice of intent to drill, rework, or deepen a well
where hydraulic fracturing will occur shall include all of the
following information:

(a) A description of the estimated quantity of water planned to
be used in the hydraulic fracturing process.

(b) The source or sources of water to be used.

end insert

begin delete SEC. 4. end delete
begin insert SEC. 8. end insert   

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, the results of production and other tests during drilling
operations, and the information required pursuant to Section 3156.

begin delete SEC. 5. end delete
begin insert SEC. 9. end insert   

Section 3215 of the Public Resources Code is amended
to read:

3215.  

(a) Within 60 days after the date of cessation of drilling,
rework, hydraulic fracturing, or abandonment operations, or the
date of suspension of operations, 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 and tests. 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) (1) The supervisor shall post the information provided
pursuant to Section 3156 and that is not claimed as a trade secret
pursuant to subdivision (c) of Section 3203 to existing Internet
maps on the division’s Internet Web site, and shall make that
information available to the public in a way that the information
is associated with each specific well where chemicals are injected
for purposes of hydraulic fracturing.

(2) For purposes of complying with the posting requirements
of paragraph (1), the supervisor may use an existing public Internet
Web site administered by the Ground Water Protection Council
or the Interstate Oil and Gas Compact Commission if all of the
following are met:

(A) The information is transmitted and posted to the public
Internet Web site in a form and manner approved by the supervisor
and includes the information provided to the supervisor pursuant
to Section 3156, except for trade secret information pursuant to
subdivision (c) of Section 3203.

(B) There is an electronic link from the wells represented on
the division’s existing internet maps that allows members of the
public to view the information about specific wells based on their
location.

(C) On and after January 1, 2014, the Chemical Disclosure
Registry allows for the division staff and the public to aggregate
data and search and sort the registry for information by geographic
area, ingredient, Chemical Abstract Service number, time period,
and operator.

(D) Members of the public are permitted to copy, reproduce,
modify, republish, upload, post, transmit, or distribute the
information without restriction.

begin delete SEC. 6. end delete
begin insert SEC. 10. end insert   

Section 3215.5 is added to the Public Resources Code,
to read:

3215.5.  

(a) Notwithstanding Section 10231.5, on or before
January 1, 2014, and annually thereafter, the supervisor shall
prepare and transmit to the Legislature a comprehensive report
regarding hydraulic fracturing in oil and gas exploration and
production in California, using the information provided pursuant
to Section 3156. Where the information involves trade secret
protection, the supervisor shall only use information provided
pursuant to paragraph (5) of subdivision (c) of Section 3203 to
complete the report. The report shall additionally include, but is
not limited to, the following relevant information:

(1) Aggregated data detailing the volumes of hydraulic fracturing
fluid used during hydraulic fracturing, identifying whether it is
water suitable for irrigation or domestic purposes, water not
suitable for irrigation or domestic purposes, or something other
than water.

(2) Aggregated data detailing the disposition of hydraulic
fracturing fluid used to conduct hydraulic fracturing.

(3) Aggregated data detailing the volumes of each chemical
used in hydraulic fracturing treatments in the state, in each county,
and by each company, during the preceding year.

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

(5) The number of well failures.

(6) Based on a representative sampling of information submitted
to the division pursuant to Section 3156 and subdivision (c) of
Section 3203, the percentage of chemical information withheld
within the representative sample as trade secret information.

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

begin delete SEC. 7. end delete
begin insert SEC. 11. end insert   

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.