BILL NUMBER: SB 4	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Pavley

                        DECEMBER 3, 2012

   An act to amend Section 3213 of, and to add Article 3 (commencing
with Section 3150) to Chapter 1 of Division 3 of, the Public
Resources Code, relating to oil and gas.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 4, as introduced, Pavley.  Oil and gas: hydraulic fracturing.
   Under existing law, the Division of Oil, Gas, and Geothermal
Resources (DOGGR) 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
requires an operator of a well, before commencing the work of
drilling the well, to obtain approval from the State Oil and Gas
Supervisor or a district deputy. Existing law requires the operator
of a well to keep, or cause to be kept, a careful and accurate log,
core record, and history of the drilling of the well. Within 60 days
after the date of cessation of drilling, rework, or abandonment
operations, the owner or operator is required to file with the
district deputy certain information, including the history of work
performed.
   This bill would define, among other things, hydraulic fracturing
and hydraulic fracturing fluid. The bill requires an operator of a
well to record and include all data on hydraulic fracturing
treatment, including names and locations of all known seismic faults,
as a part of the history of the drilling of the well. The bill would
require DOGGR, in consultation with the Department of Toxic
Substances Control, the State Air Resources Board, and the State
Water Resources Control Board, on or before January 1, 2015, to adopt
rules and regulations specific to hydraulic fracturing, including
governing the construction of wells and well casings and full
disclosure of the composition and disposition of hydraulic
fracturing. The bill would require an operator to file with the
supervisor or a district deputy, at least 30 days prior to the
commencement of a hydraulic fracturing treatment, a notice of
intention to commence hydraulic fracturing treatment containing
specified information. The bill would require the hydraulic
fracturing to be completed within one year of the filing of the
notice of intention. The bill would require DOGGR, within 10 days of
the receipt of the notice of intention, to make the notice publicly
available, to post it on the division's Internet Web site, and to
notify the appropriate regional water quality control board. The bill
would require the supplier, as defined, of the hydraulic fracturing
treatment to provide to the operator, within 30 days following the
conclusion of the hydraulic fracturing, certain information regarding
the hydraulic fracturing fluid. The bill would require the operator,
within 60 days of the cessation of hydraulic fracturing treatment,
to post or cause to have posted on an Internet Web site accessible to
the public specified information on the fracturing and fluid, as
specified. The bill would require a supplier claiming trade secret
protection for the chemical composition of additives used in the
hydraulic treatment to disclose the composition to DOGGR, but would,
except as specified, prohibit those with access to the trade secret
to disclose it, and a person who violates this prohibition would be
guilty of a misdemeanor. Because this bill would create a new crime,
it would impose a state-mandated local program.
   This bill would require the supervisor, on or before January 1,
2016, and annually thereafter, to transmit to the Legislature and
make available publicly a comprehensive report on hydraulic
fracturing in the exploration and production of oil and gas resources
in the state.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Article 3 (commencing with Section 3150) is added to
Chapter 1 of Division 3 of the Public Resources Code, to read:

      Article 3.  Hydraulic Fracturing


   3150.  "Additive" means a substance or combination of substances
added to a base fluid for purposes of preparing a hydraulic
fracturing fluid. An additive may, but is not required to, serve
additional purposes beyond the transmission of hydraulic pressure to
the geologic formation. An additive may be of any phase and includes
proppants.
   3151.  "Base fluid" means the continuous phase fluid used in the
makeup of a hydraulic fracturing fluid. The continuous phase fluid
may include, but is not limited to, water, and may be a liquid or a
gas.
   3152.  "Carrier fluid" means a base fluid into which additives are
mixed to form a hydraulic fracturing fluid.
   3153.  "Hydraulic fracturing" means a treatment used in
stimulating a well that involves the pressurized injection of
hydraulic fracturing fluid and proppant into an underground geologic
formation in order to fracture the formation, thereby causing or
enhancing, for the purposes of this division, the production of oil
or gas from a well.
   3154.  "Hydraulic fracturing fluid" means a carrier fluid mixed
with physical and chemical additives for the purpose of hydraulic
fracturing. A hydraulic fracturing treatment may include more than
one hydraulic fracturing fluid.
   3155.  "Proppants" means materials inserted or injected into the
underground geologic formation that are intended to prevent fractures
from closing.
   3156.  "Supplier" means an entity performing hydraulic fracturing
or an entity supplying an additive or proppant directly to the
operator for use in hydraulic fracturing.
   3157.  (a) The Legislature finds and declares that hydraulic
fracturing of oil and gas wells in combination with technological
advances in oil and gas well drilling are spurring oil and gas
extraction, as well as oil and gas exploration, in California.
   (b) (1) On or before January 1, 2015, the division, in
consultation with the Department of Toxic Substances Control, the
State Air Resources Board, and the State Water Resources Control
Board, shall adopt rules and regulations specific to hydraulic
fracturing. The rules and regulations shall include, but are not
limited to, revisions, as needed, to the rules and regulations
governing construction of wells and well casings to ensure integrity
of wells, well casings, and the geologic and hydrologic isolation of
the oil and gas formation during and following hydraulic fracturing,
and full disclosure of the composition and disposition of hydraulic
fracturing fluids.
   (2) Full disclosure of the composition and disposition of
hydraulic fracturing fluids shall, at a minimum, include:
   (A) The date of the hydraulic fracturing.
   (B) A complete list of the names, Chemical Abstract Service (CAS)
numbers, and maximum concentration, in percent by mass, of each and
every chemical constituent of the hydraulic fracturing fluids used.
If a CAS number does not exist for a chemical constituent, the well
owner or operator may provide another unique identifier, if
available. Chemical information claimed as a trade secret, pursuant
to subdivision (h), shall be identified as such and reported as
described in subdivision (h).
   (C) The trade name, the supplier, and a brief description of the
intended purpose of each additive contained in the hydraulic
fracturing fluid.
   (D) The total volume of carrier fluid used during hydraulic
fracturing, and the identification of whether the carrier fluid is
water suitable for irrigation or domestic purposes, water not
suitable for irrigation or domestic purposes, or a fluid other than
water.
   (E) The total volume of base fluid, if not reported as a carrier
fluid, used during hydraulic fracturing, and the identification of
whether the base fluid is water suitable for irrigation or domestic
purposes, water not suitable for irrigation or domestic purposes, or
a fluid other than water.
   (F) The source, volume, and disposition of all water, including,
but not limited to, all water used as base and carrier fluids, used
during hydraulic fracturing and recovered from the well following
hydraulic fracturing that is not otherwise reported as produced water
pursuant to Section 3227.
   (G) The disposition of all hydraulic fracturing fluids other than
water.
   (H) Any radiological components or tracers injected into the well
as part of the hydraulic fracturing process, a description of the
recovery method, if any, for those components or tracers, the
recovery rate, and the disposal method for recovered components or
tracers.
   (I) The radioactivity of the recovered hydraulic fracturing
fluids.
   (J) The location of the portion of the well subject to the
hydraulic fracturing treatment and the extent of the fracturing
surrounding the well induced by the treatment.
   (c) (1) Notwithstanding any other law or regulation, at least 30
days prior to commencing a hydraulic fracturing treatment on a well,
the operator shall file a written notice of intention to commence the
hydraulic fracturing treatment with the supervisor or district
deputy. 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 hydraulic fracturing treatment
shall be completed within one year of filing the notice of intention.
The information provided in the notice shall include, but is not
limited to, the following:
   (A) The well identification number and location.
   (B) The time period during which the hydraulic fracturing
treatment is planned to occur.
   (2) Within 10 days of receipt of the notice of intention, the
division shall make the notice of intention publicly available, post
it on the publicly accessible portion of the division's Internet Web
site, and notify the appropriate regional water quality control board
or boards as determined by where the well, including its subsurface
portion, is located.
   (3) The operator shall provide notice to the division 72 hours
prior to the actual start of the hydraulic fracturing treatment in
order for the division to witness the treatment.
   (d) If hydraulic fracturing is performed on a well, a supplier
that performs any part of hydraulic fracturing or provides additives
directly to the operator for hydraulic fracturing shall furnish the
operator with information needed for the operator to comply with
subdivision (e). If a supplier claims trade secret protection
pursuant to subdivision (h), the supplier shall notify the operator
and provide to the operator substitute information, as described in
subdivision (h), suitable for public disclosure. This information
shall be provided as soon as possible but no later than 30 days
following the conclusion of the hydraulic fracturing.
   (e) (1) Within 60 days following cessation of hydraulic fracturing
on a well, the operator shall post or cause to have posted to an
Internet Web site designated or maintained by the division and
accessible to the public, all of the hydraulic fracturing fluid
composition and disposition information required to be collected
pursuant to rules and regulations adopted under subdivision (b),
including well identification number and location.
   (2) The division may designate a publicly accessible Internet Web
site, developed by the Ground Water Protection Council and the
Interstate Oil and Gas Compact Commission for the posting of the data
pursuant to paragraph (1), if all of the following requirements are
met:
   (A) The information is organized on that Internet Web site in a
format such as a spreadsheet that allows the public to easily search
and aggregate, to the extent practicable, each type of information
required to be collected pursuant to subdivision (b) using search
functions on that Internet Web site.
   (B) The Internet Web site permits any person to export, copy, or
otherwise obtain in electronic format the data submitted pursuant to
subdivision (b) from that Internet Web site. Once obtained, there
shall be no restrictions on the possession or further distribution,
modification, transmission, or reproduction of any information
submitted pursuant to this section in any form and by any means and
no prior authorization shall be required.
   (3) If an Internet Web site is not designated by the division
pursuant to paragraph (2), the division shall maintain a publicly
accessible Internet Web site, in compliance with subparagraphs (A)
and (B) of paragraph (2), for the posting of the data required
pursuant to paragraph (1).
   (f) The operator is responsible for compliance with this section.
   (g) The names and locations of all known seismic faults within a
distance from the well bore in any direction equal to five times the
fracture zone length and the names and locations of seismic faults
whose movement is reasonably anticipated to impact the integrity of
the well, well casing, and oil and gas formation shall be added to
the well history. The fracture zone length is defined as the distance
from the well bore to the maximum extent of any induced fracture.
   (h) (1) The supplier may claim trade secret protection for the
chemical composition of additives pursuant to Section 1060 of the
Evidence Code, or the Uniform Trade Secrets Act (Title 5 (commencing
with Section 3426) of Part 1 of Division 4 of the Civil Code).
   (2) If a supplier believes that information regarding a chemical
constituent of a hydraulic fracturing fluid is a trade secret, the
supplier shall nevertheless disclose the information to the division
within 30 days following cessation of hydraulic fracturing on a well,
and shall notify the division in writing of that belief.
   (3) The supplier is not required to disclose trade secret
information to the operator.
   (4) This subdivision does not permit a supplier to refuse to
disclose the information required pursuant to this section to the
division.
   (5) To comply with the public disclosure requirements of this
section, the supplier shall indicate where trade secret information
has been withheld and the specific name of a chemical constituent
shall be replaced with the chemical family name or similar descriptor
associated with the trade secret chemical information.
   (6) Except as provided in subparagraph (B) of paragraph (8), the
division shall protect from disclosure any trade secret designated as
such by the supplier, if that trade secret is not a public record.
   (7) The supplier shall notify the division in writing within 30
days of any changes to information provided to the division to
support a trade secret claim.
   (8) Upon receipt of a request for the release of information to
the public, which includes information the supplier has notified the
division is a trade secret and is not a public record, the following
procedure applies:
   (A) The division shall notify the supplier of the request in
writing by certified mail, return receipt requested.
   (B) The division shall release the information to the public, but
not earlier than 60 days after the date of mailing the notice of the
request for information, unless, prior to the expiration of the
60-day period, the supplier obtains an action in an appropriate court
for a declaratory judgment that the information is subject to
protection or for a preliminary injunction prohibiting disclosure of
the information to the public and provides notice to the division of
that action.
   (9) Except as provided in subparagraph (B) of paragraph (8), trade
secret information is not a public record and shall not be disclosed
to anyone except to an officer or employee of the division, the
state, or the United States, in connection with the official duties
of that officer or employee, to a health professional, under any law
for the protection of health, or to contractors with the division or
the state and its employees if, in the opinion of the division,
disclosure is necessary and required for the satisfactory performance
of a contract, for performance of work, or to protect health and
safety.
   (10) Except as provided in subparagraph (B) of paragraph (8), an
officer or employee of the division or former officer or employee
who, by virtue of that employment or official position, has
possession of, or has access to, any trade secret subject to this
section, and who, knowing that disclosure of the information to the
general public is prohibited by this section, knowingly and willfully
discloses the information in any manner to any person not entitled
to receive it, is guilty of a misdemeanor. A contractor of the
division and any employee of the contractor who has been furnished
information as authorized by this section shall be considered an
employee of the division for purposes of this section.
   (11) In the event of exposure to hydraulic fracturing fluids
necessitating medical care, the person receiving the care shall have
the right to petition the division to disclose relevant trade secret
information in order to receive appropriate medical care.
   (i) This section does not apply to routine tests to monitor the
integrity of wells and well casings.
   (j) A well granted confidential status pursuant to Section 3234
shall comply with this section, with the exception of the disclosure
of hydraulic fracturing fluids pursuant to subdivision (e) which
shall not be required until the confidential status of the well
ceases.
   3158.  (a) Within 60 days after the date of cessation of hydraulic
fracturing, the operator shall file with the district deputy, in a
form approved by the supervisor, true copies of the log, core record,
and history of work performed, and, if made, true and reproducible
copies of all electrical, physical, or chemical logs, tests, or
surveys. Upon a showing of hardship, the supervisor may extend the
time within which to comply with this section for a period not to
exceed 60 additional days.
   (b) The supervisor shall include information provided pursuant to
subdivision (e) of Section 3157 on existing publicly accessible maps
on the division's Internet Web site, and make the information
available such that hydraulic fracturing and related information are
associated with each specific well. If data are reported on an
Internet Web site not maintained by the division pursuant to
paragraph (2) of subdivision (e) of Section 3157, the division shall
provide electronic links to that Internet Web site. The public shall
be able to search and sort the hydraulic fracturing and related
information by at least the following criteria:
   (1) Geographic area.
   (2) Additive.
   (3) Chemical constituent.
   (4) Chemical Abstract Service number.
   (5) Time period.
   (6) Operator.
   (c) Notwithstanding Section 10231.5 of the Government Code, on or
before January 1, 2016, and annually thereafter, the supervisor
shall, in compliance with Section 9795 of the Government Code,
prepare and transmit to the Legislature a comprehensive report on
hydraulic fracturing in the exploration and production of oil and gas
resources in California. The report shall include aggregated data of
all of the information required to be reported pursuant to Section
3157 reported by district, county, and operator. The report also
shall include relevant additional information, as necessary,
including, but not limited to, all the following:
   (1) Aggregated data detailing the disposition of any produced
water from wells that have undergone hydraulic fracturing.
   (2) Aggregated data detailing the names and locations of seismic
faults within a distance from the well bore in any direction equal to
five times the fracture zone length and the names and locations of
seismic faults whose movement is reasonably anticipated to impact the
integrity of the well, well casing, and oil and gas formation.
   (3) The number of emergency responses to a spill or release.
   (4) Aggregated data detailing the number of times trade secret
information was not provided to the public, by county and by each
company, in the preceding year.
   (5) Data detailing the loss of well and well casing integrity in
the preceding year for wells that have undergone hydraulic fracturing
treatment. For comparative purposes, data detailing the loss of well
and well casing integrity in the preceding year for all wells shall
also be provided. The cause of each well and well casing failure, if
known, shall also be provided.
   (d) The report shall be made publicly available and an electronic
version shall be available on the division's Internet Web site.
  SEC. 2.  Section 3213 of the Public Resources Code is amended to
read:
   3213.  The history shall show the location and amount of
sidetracked casings, tools, or other material, the depth and quantity
of cement in cement plugs, the shots of dynamite or other
explosives, and the results of production and other tests during
drilling operations.  All data on hydraulic fracturing treatments
pursuant to Section 3157 shall be recorded in the history. 
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.