Amended in Assembly April 1, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 669

Introduced by Assembly Member Stone

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(Coauthor: Assembly Member Williams)

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February 21, 2013

An act to amend begin delete Section 3202 end delete begin insert Sections 3108, 3203, and 3227 end insert of the Public Resources Code, relating to oil and gas.

LEGISLATIVE COUNSEL’S DIGEST

AB 669, as amended, Stone. Oil and gas: drilling.

Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. The State Oil and Gas Supervisor supervises the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field regarding safety and environmental damage. Existing law further requires a person who acquires the right to operate a well or production facility, whether by purchase, transfer, assignment, conveyance, exchange, or other disposition, to meet specific requirements before drilling operations.

This bill would additionally require the operator prior to drilling begin insert , redrilling, or deepening end insert operations to submit proof to the supervisor that the applicable regional water quality control board has approved the begin insert disposal end insert method and location of wastewater disposal for the well.

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Existing law requires the supervisor, on or before the first day of October of each year, to make public a report on specified information. Existing law requires an operator of a well, on or before the end of each month, to file with the supervisor a statement for the last preceding calendar month detailing specified information.

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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. The bill would additionally require the operator of a well to include in the statement information on the origin and total amount of freshwater used in each well and the disposal of wastewater.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

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begin insert SECTION 1. end insert   

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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:

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(a)

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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)

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

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(c)

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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.

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(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.

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(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.

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The

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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.

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begin insert SEC. 2. end insert   

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

3203.  

(a) The operator of begin delete any end delete begin insert a end insert 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 approval is given by the supervisor or
the district deputy. If the supervisor or the district deputy 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 and the notice, for the purposes and
intents of this chapter, shall be deemed a written report of the
supervisor. If operations have not commenced within one year of
receipt 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
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).

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(d) 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 the applicable regional water quality
control board has approved the disposal method and location of
disposal of the wastewater, including, but not limited to, produced
water and flowback, for the well.

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begin insert SEC. 3. end insert   

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begin insert Section 3227 of the end insert begin insert Public Resources Code end insert begin insert is amended
to read: end insert

3227.  

begin insert (a) end insert begin insert   end insert The owner of begin delete any end delete begin insert a end insert well shall file with the
supervisor, on or before the last day of each month, for the last
preceding calendar month, a statement, in the form designated by
the supervisor, showing all of the following:

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(a)

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begin insert (1) end insert  The amount of oil and gas produced from each well during
the period indicated, together with the gravity of the oil, the amount
of water produced from each well, estimated in accordance with
methods approved by the supervisor, and the number of days during
which fluid was produced from each well.

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(b)

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begin insert (2) end insert  The number of wells drilling, producing, injecting, or idle,
that are owned or operated by the person.

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(c)

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begin insert (3) end insert  What disposition was made of the gas produced from each
field, including the names of persons, if any, to whom the gas was
delivered, and any other information regarding the gas and its
disposition that the supervisor may require.

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(d)

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begin insert (4) end insert  What disposition was made of the water produced from each
field, and the amount of fluid or gas injected into each well used
for enhanced recovery, underground storage of hydrocarbons, or
waste water disposal and any other information regarding those
wells that the supervisor may require.

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(5) The total amount of wastewater, including, but not limited
to, produced water and flowback, generated per well, the amount
of wastewater disposed per disposition type, and the location of
each disposition site.

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(6) The origin and total amount of freshwater used in each well.

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Any

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begin insert (b) end insert begin insert   end insert begin insert An end insert operator that produces oil by the application of mining
or other unconventional techniques shall file a report with the
supervisor, on or before March 1 of each year, showing the amount
of oil produced by those techniques in the preceding calendar year.

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Upon

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begin insert (c) end insert begin insert   end insert begin insert Upon end insert request and making a satisfactory showing therefor,
a longer filing period may be established by the supervisor for any
particular owner or operator.

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SECTION 1.  

Section 3202 of the Public Resources Code is
amended to read:

3202.  

(a) A person who acquires the right to operate a well or
production facility, whether by purchase, transfer, assignment,
conveyance, exchange, or other disposition, shall, as soon as it is
reasonably possible, but not later than the date when the acquisition
of the well or production facility becomes final, notify the
supervisor or the district deputy, in writing, of the person’s
operation. The acquisition of a well or production facility shall not
be recognized as complete by the supervisor or the district deputy
until the new operator provides all of the following material:

(1) The name and address of the person from whom the well or
production facility was acquired.

(2) The name and location of the well or production facility,
and a description of the land upon which the well or production
facility is situated.

(3) The date when the acquisition becomes final.

(4) The date when possession was or will be acquired.

(5) An indemnity bond for each idle well. The bond shall be in
an amount as provided in Section 3204 or 3205. The conditions
of the bond shall be the same as the conditions stated in Section
3204. An operator that has provided an individual bond required
by this subdivision in an amount as provided in Section 3204 shall
not be required additionally to comply with the requirements of
Section 3206. An operator who has provided a blanket indemnity
bond in the minimum amount required in subdivision (a) or (b) of
Section 3205 shall additionally comply with Section 3206 for any
idle wells not covered by a bond provided under Section 3204.

(b) Prior to the approval of the commencement of any drilling
or redrilling of a well, the operator shall submit proof to the
supervisor that the applicable regional water quality control board
has approved the method and location of wastewater disposal for
the well.

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