Amended in Assembly April 8, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 288

Introduced by Assembly Member Levine

February 11, 2013

An act to amend Sections 3106 and 3203 of, and to add Section 3203.5 to, the Public Resources Code, relating to oil and gas.

LEGISLATIVE COUNSEL’S DIGEST

AB 288, as amended, Levine. Oil and gas: begin delete hydraulic fracturing. end delete begin insert well stimulation end insert begin insert . end insert

(1) Under existing law, the Division of Oil, Gas, and Geothermal Resources begin delete (DOGGR) end delete 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 begin delete (supervisor) supervises end delete begin insert is required to supervise end insert 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 begin delete regarding 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 end delete begin insert so as to prevent, as far as possible, damage to, among other things, end insert underground and surface waters suitable for irrigation or domestic purposes by the infiltration of, or the addition of, detrimental substances. begin insert Under existing law, a person who violates any prohibition specific to the regulation of oil or gas operations is guilty of a misdemeanor. end insert

begin insert This bill also would require the supervisor to supervise the stimulation, well completion techniques, and rework of wells, and, with regard to the manner in which well activities are to be supervised to present damage to underground and surface waters by the infiltration of, or the addition of, detrimental substances, the bill would delete the limitation to waters suitable for irrigation or domestic purposes. end insert This bill would define begin delete “hydraulic fracturing” end delete begin insert “well stimulation” to include hydraulic fracturing and acid stimulation, as specified, end insert and begin insert would end insert require the operator of a well, at least 30 begin insert working end insert days prior to any begin delete hydraulic fracturing end delete begin insert well stimulation end insert operations, to file with the supervisor or the district deputy a written notice of intention, as specified, to commence begin delete hydraulic fracturing end delete begin insert well stimulation end insert . The bill would also prohibit any begin delete hydraulic fracturing end delete begin insert well stimulation end insert operations until written approval is given by the supervisor or district deputy and would require the supervisor or district deputy to notify the operator begin insert in writing end insert of the approval or denial of the notice within begin delete 10 end delete begin insert 30 end insert working days after the notice is submitted. The bill would require the supervisor, upon approval of the notice, to immediately notify the appropriate regional water quality control board. The bill would provide that if begin delete hydraulic fracturing end delete begin insert well stimulation end insert has not commenced within one year of receipt of the notice, begin delete that end delete the notice shall be deemed canceled. begin insert Because a violation of these provisions would create a new crime, this bill would impose a state-mandated local program. end insert

(2) Under existing law, the supervisor is required to supervise the drilling, operation, maintenance, and abandonment of wells so as to permit the owners or operators of these wells to utilize all methods and practices known to the oil industry for the purpose of increasing the recovery of underground hydrocarbons. Existing law provides that the grant in an oil and gas lease or contract to a lessee or operator of the right or power to explore for and remove all hydrocarbons from any lands in the state, absent a contrary provision, is deemed to allow the lessee or contractor, or the lessee’s or contractor’s successors or assigns, 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 the supervisor. Existing law begin delete also end delete provides that there is no legal duty upon the lessee or contractor, or the lessee’s or contractor’s successors or assigns, to conduct these operations.

This bill would begin delete repeal these provisions. end delete begin insert instead require the supervisor to supervise the drilling, stimulation, well completion techniques, rework, operation, maintenance, and abandonment of wells so as to permit the owners or operators of the wells to utilize all safe methods and practices, as specified, and would authorize the supervisor to allow these owners and operators to utilize all methods and practices to increase the ultimate recovery of underground hydrocarbons if the supervisor makes certain determinations. end insert

(3) Existing law requires the operator, before commencing the work of drilling an oil and gas well, to file a written notice of intention to commence drilling with the begin delete State Oil and Gas Supervisor end delete begin insert supervisor end insert or district deputy. Existing law prohibits any drilling until begin insert either end insert approval is given by the supervisor or district deputy begin delete and provides that end delete begin insert or end insert the notice is deemed approved if the supervisor or the district deputy fails to give a written response to the notice within 10 working days from the date of receipt. begin insert Existing law also provides that if operations have not commenced within one year of approval of the notice, the notice is deemed canceled. end insert

This bill would delete the provision stating that the failure begin insert by the supervisor or district deputy end insert to provide a written response to the notice within 10 working days is considered an approval of the notice, and instead begin insert would end insert require the supervisor or district deputy to notify the operator in writing of the approval or denial of the notice within begin delete 10 end delete begin insert 30 end insert working days after the notice is received begin insert and deem the notice canceled if operations have not commenced within one year of approval of the notice end insert .

(4) Existing law imposes various fees on operators of oil and gas wells.

This bill would begin delete authorize DOGGR end delete begin insert require the division end insert to establish a reasonable fee begin insert , as specified, end insert to be paid by the owner or operator for the costs incurred by the department for the regulation of hydraulic fracturing operations.

begin insert

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.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

SECTION 1.  

Section 3106 of the Public Resources Code is
amended to read:

3106.  

(a) The supervisor shall so supervise the drilling,
begin insert stimulation, well completion techniques, rework, end insert 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 pipelines not subject
to regulation pursuant to Chapter 5.5 (commencing with Section
51010) of Part 1 of Division 1 of Title 5 of the Government Code
that are within an oil and gas begin delete field, end delete begin insert field. This shall be done in a
manner end insert 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 begin delete , end delete begin insert ; end insert and damage to underground and surface
waters begin delete suitable for irrigation or domestic purposes end delete by the
infiltration of, or the addition of, detrimental substances.

begin insert

(b) The supervisor shall also supervise the drilling, stimulation,
well completion techniques, rework, operation, maintenance, and
abandonment of wells so as to permit the owners or operators of
the wells to utilize all safe methods and practices. The supervisor
may allow owners or operators of the wells to utilize all methods
and practices to increase the ultimate recovery of underground
hydrocarbons if the supervisor determines that those methods and
practices are consistent with this division and used in a safe
manner.

end insert begin delete

(b)

end delete

begin insert (c) end insert  The supervisor may require an operator to implement a
monitoring program, designed to detect releases to the soil and
water, including both groundwater and surface water, for
aboveground oil production tanks and facilities.

begin delete

(c) To best meet oil and gas needs in this state, the supervisor
shall administer this division so as to encourage the wise
development of oil and gas resources.

end delete

SEC. 2.  

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 a written notice of intention to commence drilling. Drilling
shall not commence until written approval is given by the
supervisor or the district deputy. The supervisor or district deputy
shall notify the operator of the approval or denial of the notice
within begin delete 10 end delete begin insert 30 end insert working days after the notice is received. If operations
have not commenced within one year of begin delete receipt end delete begin insert approval end insert of the
notice, the notice shall be deemed canceled. 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 supervisor may require other pertinent information
to supplement the notice.

(b) After the completion of any well, this section also applies begin insert , end insert
as far as may be, to the deepening or redrilling of the well, any
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 any well, and the number or designation
specified for any well in a notice filed as required by this section,
shall not be changed without first obtaining a written consent of
the supervisor.

(c) If an operator has failed 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 has failed 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).

SEC. 3.  

Section 3203.5 is added to the Public Resources Code,
to read:

3203.5.  

(a) For purposes of this division, begin delete “hydraulic end delete begin insert the
following definitions apply: end insert

begin insert

(1) “Acid stimulation” means a treatment that uses various
formulations of acids to stimulate the extraction of hydrocarbons
from carbonate or sandstone formations. This includes, but is not
limited to, fracture acid stimulation and matrix acid stimulation.

end insert

begin insert (2) end insert begin insert   end insert begin insert “Hydraulic end insert 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.

begin insert

(3) “Well stimulation” means any well intervention technique,
including, but not limited to, hydraulic fracturing and acid
stimulation, to improve the permeability of the near-wellbore
formation, thereby enhancing the productivity of a well.

end insert

(b) The operator of a well approved under Section 3203 begin delete , end delete shall
file with the supervisor or the district deputy a written notice of
intention to commence begin delete hydraulic fracturing end delete begin insert well stimulation
operations end insert at least 30 begin insert working end insert days prior to any begin delete hydraulic
fracturing end delete begin insert well stimulation end insert operations. 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, and
shall begin insert detail all well stimulation techniques, methods, and practices
expected to be performed on the well, and end insert include sufficient
information as to demonstrate that begin insert the end insert use of begin delete hydraulic fracturing end delete
begin insert well stimulation end insert will not present a threat to public health and safety.
The supervisor may require other pertinent information to
supplement the notice. begin delete Hydraulic fracturing end delete begin insert Well stimulation
operations end insert shall not commence until written approval is given by
the supervisor or district deputy.

(c) If begin delete hydraulic fracturing end delete begin insert well stimulation end insert has not commenced
within one year of receipt of the notice, the notice shall be deemed
canceled.

(d) The supervisor shall have begin delete 10 end delete begin insert 30 working end insert days to notify the
operator begin insert in writing end insert of approval or denial of the notice. In providing
the duties begin insert to the public end insert as required under subdivision (a) of Section
3106, the supervisor shall approve a notice under this section only
if the supervisor finds that the operator has provided sufficient
information as to demonstrate that begin insert the end insert use of begin delete hydraulic fracturing end delete
begin insert well stimulation end insert will not present a threat to public health and safety.

(e) Upon approval of a notice under this section, the supervisor
shall immediately notify the appropriate regional water quality
control board.

(f)  begin delete The department may establish, by regulation, end delete begin insert In addition to
any charges pursuant to Article 7 (commencing with Section 3400),
the department shall impose end insert a reasonable and appropriate fee begin insert for
each notice received pursuant to subdivision (b) end insert to be paid by the
owner or operator for the costs incurred by the department in
implementing this section.

begin insert

begin insert SEC. 4. end insert   

end insert begin 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.

end insert