BILL ANALYSIS Ó
AB 2718
Page 1
ASSEMBLY THIRD READING
AB 2718 (Bloom)
As Amended March 28, 2014
Majority vote
NATURAL RESOURCES 8-0 APPROPRIATIONS 17-0
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|Ayes:|Chesbro, Dahle, Bigelow, |Ayes:|Gatto, Bigelow, |
| |Garcia, Muratsuchi, | |Bocanegra, Bradford, Ian |
| |Patterson, Stone, | |Calderon, Campos, |
| |Williams | |Donnelly, Eggman, Gomez, |
| | | |Holden, Jones, Linder, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires the Division of Oil, Gas, and Geothermal
Resources (DOGGR) to develop a form that a third party notifier
must use when providing well stimulation treatment notices to
the surrounding community. Requires the form to be prepared in
English and Spanish and designed to be easily understood by a
layperson not trained in oil and gas development.
EXISTING LAW :
1)Establishes, pursuant to SB 4 (Pavley), Chapter 313, Statutes
of 2013, a comprehensive, multi-agency regulatory program for
oil and gas well stimulation treatments (e.g., hydraulic
fracturing, acid matrix stimulation). Makes DOGGR the lead
agency for the multi-agency regulatory program, which
includes, among other things, the following with regard to
well stimulation: a statewide environmental impact report, an
independent scientific study, a permitting process,
groundwater monitoring requirements, and public notification
and disclosure.
2)Before a well stimulation treatment may commence, requires
that a notice be provided to every tenant and property owner
whose property line location is 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. Requires
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the well stimulation treatment notice to contain a copy of the
approved well stimulation treatment permit and information on
how to request water sampling and testing prior and subsequent
to well stimulation treatment. Requires the oil and gas
operator to contract with an independent entity (third party
notifier) to provide the well stimulation treatment notice.
Authorizes DOGGR to review and audit the performance of the
third party notifier. Allows well stimulation treatment to
commence 30 days after the notice is provided to the
appropriate surface property tenants and owners.
3)Allows a property owner who receives a well stimulation
treatment notice to request water quality sampling and testing
from a qualified contractor designated by the regional water
quality control board. Requires the well owner or operator to
pay for this sampling and testing.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor, absorbable costs to the Oil, Gas, and
Geothermal Administrative Fund.
COMMENTS :
Background. In 2013, nine bills were introduced that would have
regulated, limited, or banned fracking in California. Of these
bills, only one, SB 4 (Pavley), Chapter 313, Statutes of 2013,
passed the Legislature and was signed into law by the Governor.
SB 4 provides for the comprehensive regulation of well
stimulation treatments, including both hydraulic fracturing and
acidization. SB 4 requires that DOGGR promulgate emergency
interim and permanent regulations for well stimulation
treatments. Among other additional provisions, SB 4 requires an
oil and gas operator who plans to perform well stimulation
treatments to contract with a third party notifier to give
pre-treatment notice to tenants and property owners of the
surrounding area.
Well Stimulation Treatment Notices. The well stimulation
treatment notices are a significant part of SB 4's attempt to
protect the public's health, safety, and welfare. Well
stimulation has been thrust to the forefront of the public's
consciousness in large part due to the 2011 Academy Award
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nominated documentary Gasland, which scrutinized hydraulic
fracturing practices in other areas of the country. There have
also been several lawsuits, news reports, and governmental
reports regarding the risks of hydraulic fracturing. In
California, several communities where unaware until recently
that hydraulic fracturing was occurring in or near their
neighborhoods. There was significant pressure and demand that
oil and gas well operators provide more notification and
disclosure of well stimulation treatments so the public could
respond and protect itself from any possible health and
environmental harm.
SB 4's notification requirements are one of the state's
mechanisms to ensure that the public is no longer kept in the
dark on well stimulation treatments occurring in their
community. SB 4 protects the integrity of these notices by
involving a third party notifier. SB 4 also gives the public
the ability to request water sampling (at no cost) to determine
if the well stimulation operations have had any effect on
drinking water and the surrounding environment.
Several of these well stimulation treatment notices have been
given to landowners and tenants since the passage of SB 4. One
notice obtained by the author seems to be thorough and concise;
however, the notice's cover form (i.e., the form that is
required to accompany the permit and provide information on how
to obtain water sampling) illustrates some potential problems
that easily can be fixed by legislative guidance. This bill
proposes to make these fixes.
First, there is no uniform template that a third party notifier
can use to ensure that the notice cover form is adequate. This
bill would require DOGGR to develop such a template.
Second, there is no requirement that the well stimulation
treatment cover form be in any other language besides English.
According to the census, in Los Angeles (where well stimulation
occurs in areas such as Baldwin Hills), there are 2,118,000
residents who speak a language other than English at home, with
1,541,000 who speak Spanish, and 1,083,000 who "speak English
less than 'very well.'" Thus, it seems appropriate that the
well stimulation notice be provided in Spanish as well as
English, which this bill will require.
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Third, "well stimulation" is an industry term of art. The
public is well aware of the term "hydraulic fracturing" or
"fracking," but may not necessarily know that the term "well
stimulation" includes hydraulic fracturing. Moreover, other
well stimulation treatment techniques that may be checked off on
the permit, such as acid matrix stimulation, are similar to
hydraulic fracturing; however, the public may not understand
this without a deeper understanding of oil and gas production
terminology. This bill requires the cover form to be designed
so the notice can be easily understood by a layperson not
trained in oil and gas development.
Fourth, there is no requirement that the third party notifier
send a copy of a notice to DOGGR so the agency can monitor
whether the notice is adequate. SB 4 does allow DOGGR to review
and audit the performance of the third party notifiers, but it
would also seem appropriate to have DOGGR keep an ongoing record
of notices to better monitor the process.
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092
FN: 0003497