BILL ANALYSIS �
AB 1301
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Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1301 (Bloom) - As Amended: March 21, 2013
Policy Committee: Natural
ResourcesVote:5-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill prohibits hydraulic fracturing until the Legislature
enacts subsequent legislation to determine when and under what
conditions hydraulic fracturing may be conducted while
protecting the public health and safety and the natural
resources of the state.
FISCAL EFFECT
1)Potential delay in state revenues of up to $9 million due to
the inability to use hydraulic fracturing on tidelands oil
wells owned by the state while the regulations are being
developed.
2)Estimated special fund costs to DOGGR and other state agencies
to implement this bill are over $800,000 one-time and $700,000
on-going costs for increased regulation and enforcement
duties.
COMMENTS
1)Purpose. This bill is intended to impose a moratorium on
hydraulic fracturing operations until laws and regulations are
developed to protect the public health, safety and natural
resources of the state.
2)Background. 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.
AB 1301
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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.
3)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 US 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.
4)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; 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
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.
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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
5)DOGGRs 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 CEQA process to fully
determine significant environmental effects.
6)Related Legislation. The following bills will be heard today
in the Appropriations Committee:
a) AB 7 (Wieckowski) regarding fracking disclosure;
b) AB 288 (Levine) regarding well stimulation permits;
c) AB 649 (Nazarian) provides a specific fracking
moratorium;
d) AB 669 (Stone) regarding wastewater disposal
operations;
e) AB 982 (Williams) deals with groundwater monitoring;
f) AB 1323 (Mitchell) provides a specific fracking
moratorium.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081