BILL ANALYSIS �
AB 7
Page 1
ASSEMBLY THIRD READING
AB 7 (Wieckowski)
As Amended June 10, 2013
Majority vote
NATURAL RESOURCES 5-2
-----------------------------------------------------------------
|Ayes:|Chesbro, Garcia, | | |
| |Muratsuchi, Stone, | | |
| |Williams | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Grove, Patterson | | |
| | | | |
-----------------------------------------------------------------
SUMMARY : Requires the owner or operator of an oil and gas well in
which hydraulic fracturing is utilized to provide the Division of
Oil, Gas, and Geothermal Resources (DOGGR) and the public with
specific information related to the hydraulic fracturing treatment.
Specifically, this bill :
1)Requires an operator of an oil and gas well to file with DOGGR an
application to commence drilling (as opposed to a written notice
of intention to commence drilling). Requires DOGGR to approve or
deny an application to commence drilling within 30 days (as
opposed to 10 days). Repeals the provision that deems an oil and
gas permit approved if DOGGR fails to respond to the permit
request.
2)Requires an operator of an oil and gas well to include the
following additional information as part of the application to
commence drilling:
a) The type of exploration and production techniques that the
operator will use at the well;
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 must include the name of the
chemical; the purpose of the chemical in the production or
exploration process; the Chemical Abstract Service (CAS)
numbers for the chemical; and the estimated total amount of the
AB 7
Page 2
chemical used; and,
c) If hydraulic fracturing will occur, a description of the
estimated quantity of water planned to be used in the process;
the sources of water to be used; and a groundwater monitoring
plan as specified.
3)Requires, prior to the approval of the commencement of drilling,
the operator of an oil and gas well to submit written proof to
DOGGR that a waste discharge report for the disposal of wastewater
has been filed with the applicable regional water quality control
board.
4)Requires, at least 30 days prior to commencing a hydraulic
fracturing treatment, the operator of an oil and gas well to
provide a copy of the approved hydraulic fracturing treatment
permit to every surface property owner whose property line
location is either within a 1,500 foot radius of the wellhead or
within 500 feet from the horizontal projection of all subsurface
portions of the designated well to the surface. Allows a property
owner who receives notice to request the applicable regional water
quality control board to perform surface and well water quality
sampling and testing to obtain baseline measurements prior to the
commencement of the hydraulic fracturing treatment and follow-up
measurements after the hydraulic fracturing treatment.
5)Requires the operator of a hydraulic fracturing well to provide
DOGGR (either directly or through an arrangement with the
supplier), and include in the well history, all of the following
information:
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;
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
AB 7
Page 3
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; 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.
6)Requires, within 60 days after the cessation of hydraulic
fracturing, the operator of the oil and gas well to file with
DOGGR information related to the history of work performed on the
well. Requires DOGGR to post the well's hydraulic fracturing
information to maps on DOGGR's Web site and make the information
available to the public. Authorizes DOGGR to use an existing
public Web site, such as fracfocus.org, if certain criteria are
met.
7)Allows a supplier of hydraulic fracturing chemicals to claim trade
secret protections for the chemical composition of additives;
however, the supplier must still provide the trade secret
information to DOGGR. If DOGGR receives a request for release of
the trade secret information to the public, requires DOGGR to
notify the supplier of the request and give the supplier 60 days
to commence a court action to prohibit the release of information.
Authorizes disclosure of trade secret information to certain
parties, including health professionals.
8)Requires DOGGR, on or before January 1, 2015, 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, a list containing
AB 7
Page 4
restricted or prohibited toxic chemicals, and a list containing
restricted or prohibited locations deemed extremely vulnerable to
a spill or release of chemicals.
9)Requires annual public reports from DOGGR regarding fresh water
used for oil and gas production, wastewater produced from oil and
gas production, well casing failures, chemicals used in hydraulic
fracturing, emergency responses to spills and releases, and trade
secret claims.
EXISTING LAW :
1)Requires DOGGR to 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.
2)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.
FISCAL EFFECT : According to the Assembly Appropriations Committee's
May 15, 2013 analysis, estimated one-time special costs in the range
of $1 million and ongoing costs of a similar amount to fulfill new
duties at DOGGR relating to evaluating trade secrets and processing
public requests, and reporting to the Legislature.
The bill was subsequently amended to include additional requirements
related to disclosure, groundwater monitoring, wastewater disposal,
and notice to neighbors. The cost of these additional requirements
is unknown.
COMMENTS :
AB 7
Page 5
Purpose . This bill is primarily intended to provide the public
disclosure of information relating to hydraulic fracturing.
Background . Hydraulic fracturing (also known as 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 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.
Federal Exemption Followed by Fracking Increase . In 2005, Congress
exempted hydraulic fracturing (except when involving the injection
of diesel fuels) from the federal Safe Drinking Water Act. As a
result of this action, the United States Environmental Protection
Agency (US EPA) lacks the authority to regulate hydraulic fracturing
activities that do not use diesel fuel as an additive. Since 2007,
shale oil production has increased from about 39 barrels to 217
million barrels and shale gas production increased from 1.6 trillion
cubic feet to 7.2 trillion cubic feet.
Potential Environmental Risks . The United States Government
Accountability Office (GAO) categorizes the potential environmental
risks of fracking into the following categories: a) air quality; b)
water quality and quantity; and c) land and wildlife.
Air quality risks are generally a result of engine exhaust from
increased traffic and equipment emissions with a risk of
unintentional emissions of pollutants from faulty equipment.
Water quality risks result from spills or releases of fracking
AB 7
Page 6
fluids from tank ruptures, or operational errors or underground
migration. Fracturing chemicals may contaminate surface or
groundwater under these conditions. Water is the primary component
of fracking fluids. The cumulative effects of using surface water or
groundwater should be regulated to prevent significant local
effects.
With regard to land and wildlife, the GAO raises concerns about
vegetation clearing, road construction, pipelines and storage tanks,
unintentional oil or toxic chemical spills and the resulting impact
on wildlife and habitat.
DOGGR's Fracking Regulations . DOGGR has the statutory responsibility
to regulate fracking, but to date has not done so. In December
2012, DOGGR released a pre-rulemaking discussion draft of fracking
regulations to help inform the next regulatory draft.
Once released, the proposed regulations will be vetted through a
year-long formal rulemaking process. In the meantime, DOGGR is
conducting workshops throughout the state. Numerous groups are
concerned that fracking activity is continuing absent formally
adopted safeguards and regulations.
Others are concerned that DOGGR may not be conducting adequate
environmental review through the California Environmental Quality
Act (CEQA) process to fully determine significant environmental
effects.
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092
FN:
0001341