BILL ANALYSIS Ó
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2013-2014 Regular Session |
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BILL NO: AB 2718 HEARING DATE: June 10, 2014
AUTHOR: Bloom URGENCY: No
VERSION: March 28, 2014 CONSULTANT: Katharine Moore
DUAL REFERRAL: Rules FISCAL: Yes
SUBJECT: Oil and gas: well stimulation treatment: notification.
BACKGROUND AND EXISTING LAW
1.The state oil and gas regulator is the Division of Oil, Gas
and Geothermal Resources (division) located in the Department
of Conservation.
2.Last year, the Legislature passed and Governor Brown signed SB
4 (Pavley/Leno, c. 313, Statutes of 2013). SB 4 provides a
comprehensive regulatory framework for well stimulation
treatments and has repeatedly been characterized as the most
comprehensive and stringent in the country.
3.As defined in SB 4, as well stimulation treatment is "any
treatment of a well designed to enhance oil and gas production
or recovery by increasing the permeability of the formation.
Well stimulation treatments include, but are not limited to,
hydraulic fracturing treatments and acid well stimulation
treatments." These are also known as "fracking" and
"acidizing" and are highly controversial.
4.SB 4 applies to all wells in California, both onshore and
offshore in state waters, and includes numerous provisions.
In particular, SB 4 requires that the neighbors, as specified,
of wells subject to well stimulation be notified at least 30
days in advance of the well stimulation job taking place. The
well owner or operator is required to contract with an
independent entity to provide the neighbor notification.
5.The neighbors must be provided a copy of the
approved-as-complete well stimulation notice or approved well
stimulation permit and information about the opportunity to
obtain baseline and post-well stimulation water quality
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testing, as specified, of their well and surface waters.
6.The independent entity that performs the notification is
required to provide specified information to the division
regarding the notification, including a list of those
notified, the method used for the notification and the date of
notification.
7.The division is authorized to review and audit the performance
of the independent entity providing the neighbor
notifications.
8.Emergency regulations implementing SB 4 were in effect as of
January 1, 2014. Permanent regulations remain under
development and are required by SB 4 to be completed by
January 1, 2015. The emergency regulations and the proposed
permanent regulations address neighbor notification.
9.Kern, Los Angeles and Ventura counties produced approximately
71%, 12% and 4% of the oil in California in 2012. Of the 448
complete well stimulation notices posted on the division's
web-site as of June 2, 2014, 445 are for wells located in Kern
County and the remaining three are in Ventura County.
10.According to the most recent US Census data, roughly 28.6% of
California's population older than 5 years old speaks Spanish,
and about 46% of these Spanish speakers (or 4,570,554 people)
speak English "less than very well." In Kern, Los Angeles and
Ventura counties, the percentage of Spanish speakers and those
Spanish speakers who speak English less than very well are
greater than the statewide values.
PROPOSED LAW
This bill would require the division to develop a standard form
to be used for the neighbor notification. The form must be in
both English and Spanish and "designed to be easily understood
by a layperson not trained in oil and gas development."
Additionally, the independent entity providing the notification
would be required to provide the division with a copy of the
notice.
ARGUMENTS IN SUPPORT
According to the author, "While [the division] has the authority
to regulate these notifications, it is unclear at this time if
they will choose to implement specific requirements on the
make-up of these notifications." AB 2718 will "clarify
formatting and content of well stimulation neighbor
notifications in order to ensure they are user-friendly while
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retaining the appropriate information."
ARGUMENTS IN OPPOSITION
None received.
COMMENTS
Clarity on copies provided to the division? The current
language of the bill needs a technical correction to clarify the
author's intent that the division receive a single copy of a
notification for a given well stimulation job [Amendment 1].
Revised regulations may obviate need for the bill. The division
provided a copy of a neighbor notification letter sent in
December 2013 by a law firm on behalf of a well owner or
operator. The language in the letter met the requirements of SB
4, but would have been best understood by someone with a working
understanding of oil and gas production and California's laws.
Public transparency is a preeminent goal of SB 4. Public
comments during the SB 4 Environmental Impact Report scoping
process workshops and to the permanent regulations noted the
need for Spanish translation and additional explanation. The
Administration has suggested to staff that there will be
substantive changes in the revised version of the permanent well
stimulation regulations that are anticipated to be released in
June/July 2014. The revision may include changes to the
neighbor notification requirements.
SUGGESTED AMENDMENTS
AMENDMENT 1
On page 2, line 10, add a comma after "property" and on
line 11, delete "and" to read:
"?a copy of the notification provided to a tenant of a
surface property , and surface property owner or authorized
agent of the owner?"
SUPPORT
California Coastal Protection Network
Clean Water Action
Coastal Environmental Rights Foundation
Earthworks
Environmental Defense Center
Environmental Working Group
Los Padres ForestWatch
Natural Resources Defense Council
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The Wildlands Conservancy
OPPOSITION
None Received
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