BILL ANALYSIS                                                                                                                                                                                                    �



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          Date of Hearing:  April 15, 2013

                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES
                                Wesley Chesbro, Chair
                    AB 7 (Wieckowski) - As Amended:  April 8, 2013
           
          SUBJECT  :  Oil and gas:  hydraulic fracturing.

           SUMMARY  :  (1) Requires the owner or operator of well for which  
          hydraulic fracturing is utilized to provide the Division of Oil,  
          Gas, and Geothermal Resources (DOGGR) information related to the  
          hydraulic fracturing; and (2) requires DOGGR, to the extent that  
          the information is not a trade secret, to make the information  
          available to the public.

          EXISTING LAW  :

          1)Creates DOGGR within the Department of Conservation.

          2)Requires DOGGR to do all of the following:

             a)   Supervise the drilling, operation, maintenance, and  
               abandonment of wells and the operation, maintenance, and  
               removal or abandonment of tanks and facilities attendant to  
               oil and gas production, including certain pipelines that  
               are within an oil and gas field, so as to prevent, as far  
               as possible, damage to life, health, property, and natural  
               resources; damage to underground oil and gas deposits from  
               infiltrating water and other causes; loss of oil, gas, or  
               reservoir energy, and damage to underground and surface  
               waters suitable for irrigation or domestic purposes by the  
               infiltration of, or the addition of, detrimental  
               substances.

             b)   Supervise the drilling, operation, maintenance, and  
               abandonment of wells so as to permit the owners or  
               operators of the wells to utilize all methods and practices  
               known to the oil industry for the purpose of increasing the  
               ultimate recovery of underground hydrocarbons and which, in  
               the opinion of DOGGR, are suitable for this purpose in each  
               proposed case. 

          3)Declares as a policy of the state that to further the  
            elimination of waste by increasing the recovery of underground  
            hydrocarbons, a lease or contract for the exploration and  








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            extraction of hydrocarbons is deemed to allow, unless  
            otherwise stated,  the lessee or contractor to do what a  
            prudent operator using reasonable diligence would do, having  
            in mind the best interests of the lessor, lessee, and the  
            state in producing and removing hydrocarbons, including, but  
            not limited to, the injection of air, gas, water, or other  
            fluids into the productive strata, the application of pressure  
            heat or other means for the reduction of viscosity of the  
            hydrocarbons, the supplying of additional motive force, or the  
            creating of enlarged or new channels for the underground  
            movement of hydrocarbons into production wells, when these  
            methods or processes employed have been approved by DOGGR.

          4)To best meet oil and gas needs in this state, requires DOGGR  
            to administer its authority so as to encourage the wise  
            development of oil and gas resources.  

          5)Requires the operator of any well, before commencing the work  
            of drilling the well, to file with DOGGR a written notice of  
            intention to commence drilling.  Drilling shall not commence  
            until approval is given by DOGGR. If DOGGR fails to give the  
            operator written response to the notice within 10 working days  
            from the date of receipt, that failure shall be considered as  
            an approval of the notice.

           THIS BILL  :

          1)Defines "Chemical Abstracts Service" as the division of the  
            American Chemical Society that is the globally recognized  
            authority for information on chemical substances. 

          2)Defines "Chemical Abstracts Service (CAS) number" as the  
            unique identification number assigned to a chemical by the  
            Chemical Abstracts Service. 

          3)Defines "hydraulic fracturing" as 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.

          4)Explains that "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  








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            purposes beyond the transmission of hydraulic pressure to the  
            geologic formation.  Additives may be of any phase and may  
            include proppants.

          5)Defines "proppants" as materials inserted or injected into the  
            formation that are intended to prevent newly created or  
            enhanced fractures from closing.

          6)Defines "supplier" as an entity performing hydraulic  
            fracturing or a person supplying an additive or proppant  
            directly to the operator for use in hydraulic fracturing a  
            well.

          7)If hydraulic fracturing is performed on a well, requires the  
            owner or operator of the well to provide to DOGGR, or to  
            arrange with the supplier to provide to DOGGR, and to include  
            in the well history, all of the following information, except  
            for information claimed as a trade secret (as described  
            below):

             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 number.   
               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  








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               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; and

             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.

          8)Authorizes the owner or operator of a well to request in  
            writing that the hydraulic fracturing information required by  
            this bill be considered confidential information pursuant to  
            the laws that allow exploratory well records to be  
            confidential.

          9)Until January 1, 2017, authorizes the owner or operator of a  
            well to request in writing that the hydraulic fracturing  
            information required by this bill be considered confidential  
            for nonexploratory wells where hydraulic fracturing is used to  
            complete or rework a well.

          10)Authorizes the owner, operator, or supplier who provides  
            information to DOGGR in accordance with this bill may, at the  
            time of submission, submit to DOGGR a claim in writing that  
            some or all of the information is protected trade secret  
            information as defined in the Uniform Trade Secrets Act (Title  
            5 (commencing with Section 3426) of Part 1 of Division 4 of  
            the Civil Code).

          11)Requires the written trade secret claim submitted to DOGGR  
            state the reasons for the trade secret information and provide  
            specific supporting documentation.

          12)Requires the owner, operator, or supplier who provides  
            information to DOGGR and who claims trade secret protection to  
            submit two versions of the information required by the bill.   
            The first version shall be labeled "Confidential Information -  
            Do Not Disclose" and shall include all the information  
            required pursuant to the bill.  The second version shall be  
            labeled "Public Information - This Information shall be  
            Disclosed to the Public," provide an explanation of the basis  








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            for the claim of trade secrecy, and include all of the  
            information required under the bill, except that the specific  
            name of any constituent that is claimed as trade secret  
            information shall be replaced with the chemical family  
            associated with the trade secret constituent, the  
            corresponding CAS number shall be replaced with the phrase  
            "Trade Secret Information," and all other trade secret  
            information shall be redacted.

          13)Requires the information contained in the "Public  
            Information" version of the hydraulic fracturing information  
            to be made available to the public on fracfocus.org or upon  
            request by a member of the public.

          14)Requires DOGGR to keep the "Confidential Information" version  
            of the hydraulic fracturing information confidential until the  
            person claiming trade secret protection waives its claim or  
            the claim of trade secret protection is determined to be  
            invalid by a court of competent jurisdiction.

          15)If the person claiming trade secret protection is a supplier,  
            requires the supplier to only provide the well owner or  
            operator with the Confidential Information" version of the  
            hydraulic information so the owner or operator may include the  
            information required in the history of the drilling of the  
            well.

          16)Authorizes DOGGR upon its own initiative, to determine  
            whether any or all of the information claimed as a trade  
            secret pursuant has been properly claimed as trade secret  
            information.  If DOGGR determines that the information is not  
            trade secret, DOGGR shall provide written notification of the  
            determination to the person who furnished the information  
            within 45 days. The written notification shall be sent by  
            certified mail. 

          17)Upon receipt of a request for public information, requires  
            DOGGR to determine whether any or all of the information  
            claimed as a trade secret has been properly claimed as trade  
            secret information.  If DOGGR determines that the information  
            is not trade secret, the DOGGR shall provide written  
            notification of the determination to the person who furnished  
            the information within 45 days. The written notification shall  
            be sent by certified mail.









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          18)Requires the person who provided the trade secret information  
            to have 30 days from the date of receipt of a written  
            notification of the determination by DOGGR that the  
            information is not trade secret to provide additional written  
            justification of the grounds on which trade secret protection  
            is claimed.  The additional written justification shall be  
            submitted by certified mail.  The additional written  
            justification is not a public record, and shall be disclosed  
            by DOGGR only to state employees with a clear need to know the  
            information to reassess the trade secrecy determination.

          19)Requires DOGGR to make a final determination on whether the  
            additional written justification satisfies a claim for trade  
            secret protection within 45 days of the date of receipt of the  
            additional written justification.  If DOGGR makes a final  
            determination that the information is not protected as a trade  
            secret, DOGGR, within 45 days, shall send a copy of the final  
            determination to the person who provided the additional  
            written justification, specifying a date, not sooner than 30  
            days from the date of the mailing of the final determination,  
            when the information claimed to be trade secret information  
            shall be made available to the public. The notice of the final  
            determination shall be sent by certified mail.

          20)If DOGGR makes a final determination that the information is  
            protected as a trade secret, requires DOGGR, within 45 days,  
            to send a copy of the final determination, including  
            information stating that the determination may be challenged  
            in court, to the person who provided the additional written  
            justification and to any person who requested the information.  
            The notice of the final determination shall be sent by  
            certified mail.

          21)Requires a person claiming trade secret protection to be  
            deemed to have waived his or her claim for trade secret  
            protection if, on the date when the final notice states that  
            the information shall be made available to the public, he or  
            she has not filed an action in a court of competent  
            jurisdiction for a declaratory judgment or injunction  
            prohibiting disclosure of the information by DOGGR after a  
            final determination.

          22)Authorizes a person claiming trade secret protection to, at  
            any time, waive a claim of trade secret protection by  
            submitting a voluntary waiver of the claim to DOGGR in  








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            writing.

          23)Authorizes DOGGR to disclose information claimed as trade  
            secret information to an officer or employee of the county,  
            city, state, or federal government who has a clear need for  
            the trade secret information for an enforcement action or  
            emergency response.  The information provided shall be clearly  
            labeled as "Confidential trade secret information."  An  
            officer or employee who receives the information shall  
            maintain the confidentiality of the information and shall  
            destroy all copies received once the need for the information  
            has ended.

          24)States that nothing in this bill is intended to change or  
            supersede the disclosure of information pursuant to the  
            California Occupational Safety and Health Act of 1973 (Part 1  
            (commencing with Section 6300), Division 5, Labor Code), the  
            requirements of Article 1 (commencing with Section 25500) of  
            Chapter 6.95 concerning hazardous material release response  
            plans and inventories, the Porter-Cologne Water Quality  
            Control Act (Division 7 (commencing with Section 13000), Water  
            Code), or any other state or federal act allowing the  
            disclosure of chemical information.

          25)Within 60 days after the date of cessation of hydraulic  
            fracturing, requires the owner or operator to file with DOGGR  
            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. Upon a showing  
            of hardship, DOGGR may extend the time within which to comply  
            with this reporting requirement for a period not to exceed 60  
            additional days.

          26)Requires DOGGR to post the hydraulic information provided  
            pursuant to this bill and that is not claimed as a trade  
            secret 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.

          27)For purposes of complying with the posting requirements in  
            this bill, authorizes DOGGR to use an existing public Internet  
            Web site administered by the Ground Water Protection Council  
            or the Interstate Oil and Gas Compact Commission (i.e.  








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            fracfocus.org) if both of the following are met: (1)the  
            information is transmitted and posted to the public Internet  
            Web site in a form and manner approved by DOGGR and includes  
            the information required by this bill, except for trade secret  
            information; and (2) there is an electronic link from the  
            wells represented on DOGGRs existing internet maps that allows  
            members of the public to view the information about specific  
            wells based on their location.

          28)On or before January 1, 2014, and annually thereafter,  
            requires DOGGR to 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 this bill. Where the  
            information involves trade secret protection, DOGGR shall only  
            use information that is not confidential to complete the  
            report. The report shall additionally include, but is not  
            limited to, the following relevant information: (1) the  
            disposition of water used in the treatments; and (2)  
            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.  The  
            requirement for submitting this report is inoperative seven  
            years after the date the first report is due.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

           1)Background on Hydraulic Fracturing.   According to the Western  
            States Petroleum Association (WSPA), hydraulic fracturing  
            (a.k.a. fracking) is one energy production technique used to  
            obtain oil and natural gas in areas where those energy  
            supplies are trapped in rock (i.e. shale) or sand formations.   
            Once an oil or natural gas well is drilled and properly lined  
            with steel casing, fluids are pumped down to an isolated  
            portion of the well at pressures high enough to cause cracks  
            in shale formations below the earth's surface.  These cracks  
            or fractures allow oil and natural gas to flow more freely.   
            Often, a propping agent such as sand is pumped into the well  
            to keep fractures open.

            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  








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            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 performance.

            In 2005, Congress enacted what is colloquially referred to as  
            the "Halliburton Loophole," which exempts hydraulic fracturing  
            (except when involving the injection of diesel fuels) from the  
            federal Safe Drinking Water Act.  As a result of this action,  
            the US Environmental Protection Agency (US EPA) lacks the  
            authority to regulate hydraulic fracturing activities that do  
            not use diesel fuel as an additive.

            Around the same time that Congress exempted hydraulic  
            fracturing from the Safe Drinking Water Act, the country  
            experienced a boom in the production of shale oil and gas.   
            From 2007 to 2011, shale oil production increased more than  
            fivefold, from about 39 million barrels to about 217 million  
            barrels, and shale gas production increased approximately  
            fourfold, from 1.6 trillion cubic feet to 7.2 trillion cubic  
            feet.  This increase in production was driven primarily by  
            technological advances in horizontal drilling and hydraulic  
            fracturing that made more shale oil and gas development  
            economically viable.

            But with this boom comes various issues with regard to  
            environmental health and safety, which has caused enormous  
            public anxiety.  Cases of environmental contamination  
            attributed to hydraulic fracturing have been reported in  
            Wyoming, Texas, Colorado, West Virginia, and Pennsylvania.   
            Consequently, governments at all levels across the country are  
            looking to regulate the practice and address these concerns.  

           2)What are the environmental risks associated with hydraulic  
            fracturing?   According to a recent report from the US  
            Government Accountability Office (GAO), which is a  
            independent, nonpartisan agency that works for Congress,  
            "[d]eveloping oil and gas resources?poses inherent  
            environmental and public health risks, but the extent of risks  
            associated with shale oil and gas development is unknown, in  
            part, because the studies we reviewed do not generally take  
            into account potential long-term, cumulative effects."  The  
            GAO's report categorizes the environmental risks into the  
            following categories: air quality, water quantity, water  








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            quality, and land and wildlife.

            With regard to air quality, the risks are "generally the  
            result of engine exhaust from increased truck traffic,  
            emissions from diesel-powered pumps used to power equipment,  
            intentional flaring or venting of gas for operational reasons,  
            and unintentional emissions of pollutants from faulty  
            equipment."  The GAO report also explains how silica sand, a  
            proppant commonly used in hydraulic fracturing, and storing  
            fracturing fluids and produced waters in impoundments can  
            cause air quality issues.  Silica sand, if not properly  
            handled, can become airborne, lodge into a person's lungs, and  
            cause silicosis, which is an incurable lung disease.   
            Impoundments (i.e. ponds) containing fracturing fluids and  
            produced waters (i.e. the water produced when oil and gas are  
            extracted from the ground) pose a risk because the evaporation  
            of the fluids has the potential to release contaminants into  
            the atmosphere.

            With regard to water quantity, water is used for well drilling  
            operations to make drilling mud as well as to cool and  
            lubricate the drill bits.  Water is also the primary component  
            of hydraulic fracturing fluids.  According to the GAO, "the  
            amount of water used for shale gas development is small in  
                                                                                 comparison to other water uses, such as agriculture and other  
            industrial purposes.  However, the cumulative effects of using  
            surface water or ground water at multiple oil and gas  
            development sites can be significant at the local level,  
            particularly in areas experiencing drought conditions."  It  
            should be noted that the oil and gas industry and DOGGR both  
            assert that the amount of water used for hydraulic fracturing  
            in California is a fraction of what is used in other states.   
            This assertion is based on information voluntarily provided by  
            oil and gas operators.  It is not clear whether this  
            information is representative of all hydraulic fracturing in  
            the state.  Additionally, with the potential for a hydraulic  
            fracturing boom in the Monterey Shale (which is explained in  
            more detail below), it would be too speculative to determine  
            the type and amount of hydraulic fracturing that will take  
            place in the future and how much water will be needed.  

            With regard to water quality, the GAO explains that shale oil  
            and gas development pose risks from contamination of surface  
            water and ground water as a result of spills and releases of  
            hydraulic fracturing chemicals, produced water, and drill  








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            cuttings.  Spills and releases of these materials can occur as  
            a result of tank ruptures, blowouts, equipment or impoundment  
            failures, overfills, vandalism, accidents, ground fires, or  
            operational errors.  

            The potential for the spill and release of chemicals involved  
            in hydraulic fracturing has received a great amount of public  
            attention.  According to a recent congressional report,  
            between 2005 and 2009, oil and gas companies throughout the  
            United States used hydraulic fracturing products containing 29  
            chemicals that are (1) known or possible human carcinogens,  
            (2) regulated under the Safe Drinking Water Act for their risk  
            to human health, or (3) listed as hazardous air pollutants  
            under the Clean Air Act.  As for produced water, it can carry  
            a range of contaminants, including hydraulic fracturing  
            chemicals, salts, metals, oil, grease, dissolved organics, and  
            naturally occurring radioactive materials.  Drill cuttings  
            (i.e. the broken bits of solid material removed from drilling)  
            may contain naturally occurring radioactive materials.  

            The potential for underground migration is also a potential  
            risk to water quality.  The GAO explains that "[u]nderground  
            migration can occur as a result of improper casing and  
            cementing of the wellbore as well as the intersection of  
            induced fractures with natural fractures, faults, or  
            improperly plugged dry or abandoned wells.  Moreover, there  
            are concerns that induced fractures can grow over time and  
            intersect with drinking water aquifers."  It should be noted  
            that the oil and gas industry has provided information  
            claiming that hydraulic fracturing typically occurs thousands  
            of feet below the earth's surface and that the well casing for  
            these wells extends below an impervious layer of rock "that  
            would prevent any migration of fluids up into the drinking  
            water supply."  Assuming that the industry is correct, there  
            is still the problem with well casing failures.  A 2000  
            Society of Petroleum Engineers article regarding an oil field  
            in 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."  
             In Pennsylvania, poor cementing around a well casing allowed  
            methane to contaminate the water wells of 19 families.   
            Morever, little data exists on (1) fracture growth in shale  
            formations following multistage hydraulic fracturing over an  
            extended time period, (2) the frequency with which  
            refracturing of horizontal wells may occur, (3) the effect of  








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            refracturing on fracture growth over time, and (4) the  
            likelihood of adverse effects on drinking water aquifers from  
            a large number of hydraulically fractured wells in close  
            proximity to each other.

            With regard to land and wildlife, the GAO explains that  
            "clearing land of vegetation and leveling the site to allow  
            access to the resource, as well as construction of roads,  
            pipelines, storage tanks, and other infrastructure needed to  
            extract and transport the resource can fragment  
            habitats?[which] increases disturbances?, provides pathways  
            for predators, and helps spread nonnative plant species."   
            Noise, the presence of new infrastructure, and spills of oil,  
            gas, or other toxic chemicals are other risks that can  
            negatively affect wildlife and habitat.  

            There is also the issue of earthquakes and hydraulic  
            fracturing.  According to the GAO report, well injections,  
            especially the injection of produced water, have been  
            connected to seismicity.  

            Ideally, the environmental risks referenced above would be  
            analyzed by the lead agency under the California Environmental  
            Quality Act (CEQA).  However, according to the complaint in a  
            recent lawsuit filed against DOGGR by a number of  
            environmental groups, the agency has been "approving permits  
            for oil and gas wells after exempting such projects from  
            environmental review or? issuing boilerplate negative  
            declarations finding no significant impacts from these  
            activities."  

           3)Hydraulic Fracturing in California.   According to the oil and  
            gas industry, hydraulic fracturing has been used in California  
            for decades.  The industry claims that over 90% of hydraulic  
            fracturing occurs in Kern County, in areas with no potable  
            water, no surrounding population, and no other significant  
            business interests.  However, reports from various sources  
            suggest that hydraulic fracturing in California will likely  
            increase significantly in the upcoming years, spreading to  
            areas throughout the state.  
             
             A recent report from the University of Southern California  
            (USC) explains that "California boasts perhaps the largest  
            deep-shale reserves in the world.  Those reserves exist within  
            the Monterey Shale Formation, a 1,750 square mile swath of  








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            mostly underground shale rock that runs lengthwise through the  
            center of the state, with the major portion in the San Joaquin  
            Basin."  The US Energy Department estimates that the Monterey  
            Shale contains more than 15 billion barrels of oil, accounting  
            for approximately two-thirds of the shale-oil reserve in the  
            United States.  Additionally, according to a 2008 paper  
            published by the Society of Petroleum Engineers, "it is  
            believed that hydraulic fracturing has a significant potential  
            in many Northern California gas reservoirs."

            DOGGR, although having statutory authority to regulate  
            hydraulic fracturing, has not yet developed regulations to  
            address the activity.  As explained below, the agency is  
            currently focused on developing regulations that require oil  
            and gas operators to take certain protective measure and  
            provide information about hydraulic fracturing operations.   
            Additionally, as referenced above, DOGGR may not be conducting  
            adequate environmental review through the CEQA process to  
            determine if there are significant impacts of hydraulic  
            fracturing.

           4)DOGGR's Draft Regulations.   On December 28, 2012, DOGGR  
            released a pre-rulemaking discussion draft of regulations on  
            hydraulic fracturing. The proposed regulations attempt to  
            impose requirements on operators aimed to improve transparency  
            and safety.  Specifically, the proposed regulations would  
            require an operator to: (1) submit information to DOGGR at  
            least 10 days prior to beginning hydraulic fracturing  
            operations and notify DOGGR at least 24 hours prior to  
            commencing hydraulic fracturing operations (advance disclosure  
            of hydraulic fracturing chemicals is not required); (2) prior  
            to operations, test the structural integrity of wells and  
            casings to prevent fluid migration; (3) store and handle  
            hydraulic fracturing fluids in a specified manner; (4) monitor  
            a specified set of parameters during hydraulic fracturing  
            operations and, in case a breach occurs, terminate operations  
            and immediately notify DOGGR about the breach; (5) after the  
            conclusion of operations, monitor wells for up to 30 days and  
            maintain data for a period of 5 years; and (6) disclose data  
            to a Chemical Disclosure Registry (such as FracFocus.org) that  
            is not a trade secret, unless a health professional submits a  
            written statement of need stating that the trade secret  
            information will be used for diagnosis or treatment of an  
            individual exposed to hazardous hydraulic fracturing chemicals  
            and the health professional also executes a confidentiality  








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            agreement. 

            These proposed regulations will be vetted through a year-long  
            formal rulemaking process beginning the summer or fall of  
            2013. In the meantime, DOGGR has conducted a public workshop  
            in Los Angeles and Sacramento about the proposed regulations,  
            with more planned in California cities like Bakersfield and  
            Santa Maria through July 2013.

           5)Should the state require advance notice?   This bill does not  
            require disclosure prior to the actual hydraulic fracturing  
            operations.  As such, DOGGR will not know what chemicals are  
            injected into the ground until the chemicals (or at least some  
            of the chemical) are irretrievably released into the  
            environment.  Some states, such as Arkansas, Wyoming, West  
            Virginia, Indiana, and Montana, require some form of advance  
            disclosure of chemicals.  At least some of these states  
            provide that if there are any changes to the hydraulic  
            fracturing plan after notice is given, the operator is  
            required to immediately notify the regulatory agency.  

            When the author's previous bill on this issue (AB 591) was  
            heard by this committee, it contained language that would have  
            required this advance disclosure.  Specifically, AB 591  
            required "[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."  Additionally, the bill  
            stated that "[i]f any of the information required pursuant to  
            paragraph (1) changes over the course of the exploration and  
            production process, the operator shall immediately notify  
            [DOGGR]."   The author and committee may wish to consider  
            amendments that incorporate the advanced notice provisions  
            contained in AB 591.     

           6)What do we expect DOGGR to do with the information?   Should  
            the Legislature be content with DOGGR collecting hydraulic  
            fracturing information pursuant to this bill and reporting to  
            the Legislature once a year?  Or should DOGGR be more  
            proactive and actually use the information to assess whether  
            certain hydraulic fracturing practices threaten the public and  
            environment?  To best protect the public and environment,  the  
            author and committee may wish to consider amendments that  
            require DOGGR to develop regulations by January 1, 2015 that  
            better regulate hydraulic fracturing operations.   Such  








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            regulations should require, among other things, a process to  
            review the chemicals proposed for use; a list restricting or  
            prohibiting the use of certain toxic chemicals; and  
            restrictions or prohibitions on hydraulic fracturing in areas  
            that are extremely vulnerable to the potential harms of  
            hydraulic fracturing.  

           7)Should DOGGR provide public disclosure on its own website?    
            This bill allows DOGGR to post the hydraulic fracturing  
            information it receives from a well owner or operator to  
            fracfocus.org, which is a public website administered by the  
            Ground Water Protection Council and the Interstate Oil and Gas  
            Compact Commission.  Several states utilize this website for  
            their public disclosure requirements.  One major problem with  
            fracfocus.org is that the disclosure information is in  
            individual PDF files, which makes it difficult to search and  
            aggregate data into spreadsheets.  Another major problem is  
            with fracfocus.org's "terms and conditions of use" create  
            unreasonable restrictions for the collection and use of the  
            information posted on the website.  Most noteworthy is the  
            restriction that states the following: "[e]xcept for a single  
            copy made for personal use only, you may not copy, reproduce,  
            modify, republish, upload, post, transmit, or distribute any  
            documents or information from this site in any form or by any  
            means without prior written permission from us or the specific  
            content provider, and you are solely responsible for obtaining  
            permission before reusing any copyrighted material that is  
            available on this site. Any unauthorized use of the materials  
            appearing on this site may violate copyright, trademark, and  
            other applicable laws and could result in criminal or civil  
            penalties."  
             
            The author and committee may wish to consider amendments that  
            require DOGGR  to develop its own website by July 1, 2015 that  
            allows the public to search and aggregate hydraulic fracturing  
            data, as well as transfer the data to a commonly used  
            spreadsheet program.  Additionally, the website should allow  
            the public to use the information freely, without any use  
            restrictions.   
             
           8)Report to the Legislature.   This bill requires DOGGR to  
            provide a comprehensive annual report to the Legislature on  
            hydraulic fracturing using the data it collects as a result of  
            this bill.  These reports will include other relevant  
            information, including information on the disposition of water  








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                                                                  Page 16

            used and aggregated data detailing the volumes of each  
            chemical used.   The author and committee may wish to consider  
            amendments that require the report to include other important  
            items of information, such as data on well failures and  
            spills.  

           





          REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          None on file

           Opposition 
           
          None on file
           

          Analysis Prepared by  :  Mario DeBernardo / NAT. RES. / (916)  
          319-2092