BILL ANALYSIS �
AB 669
Page 1
Date of Hearing: April 15, 2013
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 669 (Stone) - As Amended: April 1, 2013
SUBJECT : Oil and gas: drilling
SUMMARY : (1) Prior to the approval of the commencement of any
oil and gas drilling, redrilling, or deepening of a well,
requires the operator of the well to submit written proof to the
Division of Oil, Gas, and Geothermal Resources (DOGGR) that the
applicable regional water quality control board has approved the
disposal method and location of disposal of the wastewater for
the well; and (2) requires specific information from DOGGR and
the owner of an oil and gas, including information related to
wastewater.
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; and
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.
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3)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.
4)Requires DOGGR, on or before the first day of October of each
year, to make a public written report showing:
a) The total amounts of oil and gas produced in each county
in the state during the previous calendar year;
b) The total cost of the DOGGR for the previous fiscal
year;
c) The total amount delinquent and uncollected from any
assessments or charges levied by DOGGR; and
d) Other information as the supervisor deems advisable.
5)Requires the owner of a well to file with DOGGR monthly
statements showing all of the following:
a) 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, and the number
of days during which fluid was produced from each well;
b) The number of wells drilling, producing, injecting, or
idle, that are owned or operated by the person;
c) 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 DOGGR may require; and
d) 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 DOGGR may require.
6)Establishes, under California law, the Porter-Cologne Water
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Quality Control Act, which designates beneficial uses of
water. These beneficial uses include municipal and industrial
uses, irrigation, hydroelectric generation, livestock
watering, recreational uses, fish and wildlife protection, and
aesthetic enjoyment.
7)Enforces California's water quality standards through Water
Quality Control Plans adopted by the State Water Board and the
nine Regional Water Boards. Requires Water Quality Control
Plans to include implementation programs to achieve and
maintain compliance with water quality objectives.
THIS BILL :
1)For the public written report that is due on or before the
first day of October of each year, requires DOGGR to include
the following additional information:
a) The origin and total amount of freshwater used in each
county for oil and gas production during the previous
calendar year;
b) The surface and underground destinations and total
amount of disposed wastewater from oil and gas production
in each county during the previous calendar year; and
c) 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.
2)Requires that prior to the approval of the commencement of any
drilling, redrilling, or deepening of a well, the operator
shall submit written proof to DOGGR 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.
3)For the monthly statements that an owner of a well files with
DOGGR, requires the owner to include the following additional
information:
a) The total amount of wastewater, including, but not
limited to, produced water and flowback, generated per
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well, the amount of wastewater disposed per disposition
type, and the location of each disposition site; and
b) The origin and total amount of freshwater used in each
well.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the Bill. According to the author, "the problem
this bill is attempting to solve is the lack of transparency
and certainty in regards to wastewater produced from oil and
gas production in California. Possible groundwater
contamination from oil and gas production wastewater could not
only endanger California's water and food supply, but also our
public health. For example, in 2009 a jury found that
wastewater from oil production that was stored in unlined pits
contaminated groundwater in Kern County. The contaminated
water co-mingled with irrigation water obtained from
groundwater and killed nearby almond and cotton fields; the
jury awarded $8.5 million to the grower and the punitive
damages portion of the case is still pending."
Oil and gas production produces wastewater contaminated with
salts, hydrocarbons, and heavy metals, which all exist
naturally underground. In addition, well stimulation
techniques, including hydraulic fracturing and acid matrix
stimulation, introduce other chemicals into the wastewater.
The chemicals used in fracking fluids, which also become part
of the wastewater, include radioactive tracers, carcinogens,
and other toxic chemicals. 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.
Currently, the wastewater is handled in several ways: reused
for other drilling operations, sent to treatment plants, or
disposed of into underground injection wells or in open
surface pits, known as sumps.
In DOGGR's last annual report (2009), it reported that 2.7
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billion barrels of produced water were generated in California
from oil and gas production wells. This bill will require
DOGGR to publish more specific information (organized by
county) regarding the origin and amount of freshwater used in
oil and gas production; the destination and amount of disposed
wastewater; and information related to well casing failures.
To assist DOGGR in obtaining this information, the bill
requires the monthly statements that an owner of a well files
with DOGGR to include specific information related to
wastewater.
This bill will also require the applicable regional water
quality control board to approve the disposal method and
location of wastewater produced from oil and gas operations.
This approval will be required before DOGGR can approve any
drilling, redrilling, or deepening of a well.
There is a 1988 Memorandum of Agreement (MOA) between DOGGR
and the State Water Resources Control Board for the permitting
of wastewater disposal associated with oil and gas operations.
With regard to disposal of wastewater through underground
injection, the MOA allows for a permit, even if the regional
water quality control board provides no comment on the
application. This bill will require the regional water
quality control board to take affirmative action on an
application for wastewater disposal.
2)Breaking News! On April 9, 2013, the Central Valley Water
Quality Control Board issued the following media release on an
enforcement action for "alleged unpermitted discharge of
hydraulic fracking waste:"
The Central Valley Regional Water Quality Control
Board (Central Valley Water Board) has issued an
investigative enforcement order to Vintage Production
California, an oil company conducting hydraulic
fracking in a recently drilled oil well near the City
of Shafter and the North Shafter Oil Field in Kern
County. The operation allegedly discharged hydraulic
fracking wastewater into an unlined retention pond
without the proper permits, posing a risk to surface
and ground water quality.
Central Valley Water Board Executive Officer Pamela
Creedon issued the investigative order on April 4
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under California Water Code Section 13267 giving
Vintage Production California LLC until May 6 to
report back to the Board with specific details about
the operation of the well, which is located in an area
where hydraulic fracking stimulation is used to
enhance oil and gas production. The order requires the
company to provide a technical report characterizing
the discharge water, identifying impacts to surface
and groundwater quality and to provide the Board with
a plan on how it will come into compliance with
environmental regulations. The Central Valley Water
Board's concern is that the existing operation could
threaten area waters with wastewater discharge from
fracking activity.
"When any unpermitted water discharge activities are
brought to our attention, especially one that may
involve hazardous materials, we will move swiftly to
ensure our regional surface and ground waters are not
compromised," Creedon said. "Following our
investigation we will take the appropriate steps,
which could result in the issuance of one or more
enforcement orders that may include a cease and desist
order, a cleanup and abatement order, and may also
include civil liabilities."
The Board took swift action, after a YouTube video at
http://www.youtube.com/watch?v=mxb671gbmkY was brought
to its attention. The video shows what appears to be
hydraulic fracking activities by Vintage Production
California and the unpermitted discharge of
significant quantities of hydraulic fracking
wastewater being dumped into an unlined pond in
violation of California Water Code and applicable
water quality regulations. Proper fracking operations
in the region use portable tanks that capture
hydraulic fracking wastewater and contain it for
proper disposal, or obtain the required environmental
permits to discharge the material into systems
designed to protect surface and ground water quality.
The Central Valley Water Board Code Enforcement Order
is available at:
http://www.waterboards.ca.gov/centralvalley/board_decis
ions/adopted_orders/kern/directive13267_vintage.pdf
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3)Suggested Amendments. The committee and author may wish to
consider the following technical, clean-up amendments:
Amendment 1
On page 4, in line 5, strike out "disposal of"
Amendment 2
On page 4, in lines 5 and 6, strike out "wastewater,
including, but not limited to, proposed water and flowback, "
and insert: "wastewater"
Amendment 3
On page 4, in lines 28 and 29, strike out, "What disposition
was made of the water produced from each field, and the" and
insert: The
Amendment 4
On page 4, in lines 30 and 31, strike out "or waste water
disposal"
Amendment 5
On page 4, in lines 33 and 34, strike out "wastewater,
including, but not limited to, proposed water and flowback, "
and insert: "wastewater"
Amendment 6
On page 4, in line 37, after "well" insert: or in each oil
field if the operator has multiple wells within the oil field
4)Related Legislation.
AB 7 (Wieckowski), which deals with hydraulic
fracturing disclosure.
AB 288 (Levine), which deals with permitting well
stimulation.
AB 649 (Nasarian), which deals with a hydraulic
fracturing moratorium.
AB 982 (Williams), which deals with groundwater
monitoring.
AB 1301 (Bloom), which deals with a hydraulic
fracturing moratorium.
AB 1323 (Mitchell), which deals with a hydraulic
fracturing moratorium.
SB 4 (Pavley), which deals with hydraulic fracturing
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regulations and disclosure.
SB 395 (Jackson), which deals with wastewater
disposal wells.
REGISTERED SUPPORT / OPPOSITION :
Support
California Coastkeeper Alliance
Natural Resources Defense Council
Sierra Club California
Opposition
Western States Petroleum Association
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092