Amended in Assembly June 18, 2013

Amended in Senate May 24, 2013

Amended in Senate May 7, 2013

Amended in Senate April 24, 2013

Amended in Senate March 11, 2013

Senate BillNo. 4


Introduced by Senator Pavley

begin insert

(Principal coauthor: Assembly Member Gray)

end insert

(Coauthors: Senators De León, Leno, and Monning)

(Coauthor: Assembly Member Stone)

December 3, 2012


An act to amend Sections 3213, 3215, 3236.5, and 3401 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 amended, Pavley. Oil and gas:begin delete hydraulic fracturing.end deletebegin insert well stimulation.end insert

(1) Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation, or the division, regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. The State Oil and Gas Supervisor, or 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 supervisor or 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. Under existing law, a person who violates any prohibition specific to the regulation of oil or gas operations is guilty of a misdemeanor.

This bill would define, among other things, the termsbegin insert well stimulation treatment,end insert hydraulic fracturingbegin insert,end insert and hydraulic fracturing fluid. The bill would require the Secretary of the Natural Resources Agency, on or before January 1, 2015, to cause to be conducted an independent scientific study onbegin insert well stimulation treatments, including acid well stimulation andend insert hydraulic fracturing treatments. The bill would require an operator of a well to record and include all data onbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatments, as specified. The bill would require the division, in consultation with the Department of Toxic Substances Control, the State Air Resources Board, the State Water Resources Control Board, the Department of Resources Recycling and Recovery, and any local air districts and regional water quality control boards in areas wherebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatments may occur, on or before January 1, 2015, to adopt rules and regulations specific tobegin delete hydraulic fracturingend deletebegin insert well stimulationend insert, including governing the construction of wells and well casings and full disclosure of the composition and disposition ofbegin delete hydraulic fracturingend deletebegin insert well stimulation fluidsend insert. The bill would require an operator to apply for a permit, as specified, with the supervisor or district deputy, prior to performing abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment of a well and would prohibit the operator from either conducting a newbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment or repeating abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment without a valid, approved permit. The bill would prohibit the approval of a permit that presents an unreasonable risk or is incomplete. The bill would require the division, within 5 business days of issuing a permit to commencebegin delete hydraulic fracturingend deletebegin insert a well stimulation treatmentend insert, to provide a copy to specific boards and entities and to post the permit on a publicly accessible portion of its Internet Web site. The bill would require thebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment to be completed within one year from the date that a permit is issued. The bill would require the division to perform random periodic spot check inspections duringbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatments, as specified. The bill wouldbegin delete prohibit the supervisor or district deputy, as of January 1, 2015, from issuing a permit to commence a hydraulic fracturing treatment,end deletebegin insert require the Secretary of the Natural Resources Agency to notify various legislative committees on the progress of the independent scientific study on well stimulation and related activities,end insert as specified, until the study is completed and peer reviewed by independent scientific experts. The bill would require the operator to provide a copy of the approvedbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment permit to specifiedbegin insert tenants andend insert property owners at least 30 days prior to commencing abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment. The bill would require the operator to provide notice to the division at least 72 hours prior to the actual start ofbegin delete the hydraulic fracturingend deletebegin insert a well stimulationend insert treatment in order for the division to witness thebegin delete hydraulic fracturingend delete treatment. The bill would require the supplier, as defined, of thebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment to provide to the operator, within 30 days following the conclusion of thebegin delete hydraulic fracturingend deletebegin insert treatmentend insert, certain information regarding thebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert fluid. The bill would require the operator, within 60 days of the cessation ofbegin delete hydraulic fracturingend deletebegin insert a well stimulationend insert treatment, to post or cause to have posted on an Internet Web site accessible to the public specified information on thebegin delete fracturing andend deletebegin insert well stimulationend insert fluid, as specified. The bill would provide that where the division shares jurisdiction over a well with a federal entity, the division’s rules and regulations govern thebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment of a well. The bill would require a supplier claiming trade secret protection for the chemical composition of additives used inbegin delete the hydraulicend deletebegin insert a well stimulationend insert treatment to disclose the composition to the division, in conjunction with abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment permit application, but would, except as specified, prohibit those with access to the trade secret from disclosing it. Becausebegin delete a violation ofend delete this bill would create a new crime, it would impose a state-mandated local program.

(2) Under existing law, a person who violates certain statutes or regulations relating to oil and gas well operations is subject to a civil penalty not to exceed $25,000 for each violation.

This bill would make persons who violate specified provisions relating tobegin delete hydraulic fracturingend deletebegin insert well stimulation treatmentsend insert subject to a civil penalty of not less than $10,000 and not to exceed $25,000 per day per violation.

(3) Existing law imposes an annual charge upon each person operating or owning an interest in an oil or gas well in respect to the production of the well which charge is payable to the Treasurer for deposit into the Oil, Gas, and Geothermal Administrative Fund. Existing law further requires that specific moneys from charges levied, assessed, and collected upon the properties of every person operating or owning an interest in the production of a well to be used exclusively, upon appropriation, for the support and maintenance of the department charged with the supervision of oil and gas operations.

This bill would allow the moneys described above to be used for all costs associated withbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert including scientific studies required to evaluate the treatment, inspections, and any air and water quality sampling, monitoring, and testing performed by public entities.

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 onbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert 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:

P4    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) Hydraulic fracturing of oil and gas wells in combination
4with technological advances in oil and gas well drilling are spurring
5oil and gas extraction and exploration in California.begin insert Other well
6stimulation treatments, in addition to hydraulic fracturing, are
7also critical to boosting oil and gas production.end insert

8(b) Insufficient information is available to fully assess the
9science of the practice of hydraulic fracturingbegin insert and other well
10stimulation treatment technologiesend insert
in California including
11environmental, occupational, and public health hazards and risks.

P5    1(c) Providing transparency and accountability to the public
2regardingbegin insert well stimulation treatments, including, but not limited
3to,end insert
hydraulic fracturing, associated emissions to the environment,
4and the handling, processing, and disposal ofbegin insert well stimulation and
5related wastes, including from end insert
hydraulicbegin delete fracturing and related
6wastesend delete
begin insert fracturing,end insert is of paramount concern.

begin insert

7(d) The Legislature encourages the use or reuse of treated or
8untreated water and produced water for well stimulation treatments
9and well stimulation treatment-related activities.

end insert
10

SEC. 2.  

Article 3 (commencing with Section 3150) is added
11to Chapter 1 of Division 3 of the Public Resources Code, to read:

12 

13Article 3.  begin deleteHydraulic Fracturing end deletebegin insertWell Stimulationend insert
14

 

15

3150.  

“Additive” means a substance or combination of
16substances added to a base fluid for purposes of preparingbegin insert well
17stimulation treatment fluid which includes, but is not limited to,
18an acid stimulation treatment fluid orend insert
a hydraulic fracturing fluid.
19An additive may, but is not required to, serve additional purposes
20beyond the transmission of hydraulic pressure to the geologic
21formation. An additive may be of any phase and includes
22proppants.

23

3151.  

“Base fluid” means the continuous phase fluid used in
24the makeup of abegin insert well stimulation treatment fluid, including, but
25not limited to, an acid stimulation treatment fluid or aend insert
hydraulic
26fracturing fluid. The continuous phase fluid may include, but is
27not limited to, water, and may be a liquid or a hydrocarbon or
28nonhydrocarbon gas. Abegin delete hydraulic fracturingend deletebegin insert well stimulation end insert
29 treatment may use more than one base fluid.

30

3152.  

“Hydraulic fracturing” means a well stimulation
31treatment thatbegin insert, in whole or in part,end insert includes the pressurized
32injection of hydraulic fracturing fluid or fluids into an underground
33geologic formation in order to fracturebegin insert or with the intent to fractureend insert
34 the formation, thereby causing or enhancing, for the purposes of
35this division, the production of oil or gas from a well.

36

3153.  

“Hydraulic fracturing fluid” means a base fluid mixed
37with physical and chemical additives for the purpose of hydraulic
38fracturing. A hydraulic fracturing treatment may include more than
39one hydraulic fracturing fluid.

P6    1

3154.  

“Proppants” means materials inserted or injected into
2the underground geologic formation that are intended to prevent
3fractures from closing.

4

3155.  

“Supplier” means an entity performing abegin delete hydraulic
5fracturingend delete
begin insert well stimulationend insert treatment or an entity supplying an
6additive or proppant directly to the operator for use in abegin delete hydraulic
7fracturingend delete
begin insert well stimulationend insert treatment.

8

3156.  

“Surface property owner” means the owner of real
9property as shown on the latest equalized assessment roll or, if
10more recent information than the information contained on the
11assessment roll is available, the owner of record according to the
12county assessor or tax collector.

begin delete
13

3157.  

“Cyclic steam injection” means the alternating injection
14of steam and production of oil with condensed steam from the
15same well or wells and is an enhanced oil recovery technique.
16Typical operations using this technique involve a cycle through a
17steam injection stage, followed by a steam soak stage, and then a
18production stage.

end delete
begin insert
19

begin insert3157.end insert  

“Well stimulation treatment” means a treatment applied
20to a well in order to enhance oil and gas production. Well
21stimulation treatments include, but are not limited to, hydraulic
22fracturing treatments and acid well stimulation treatments. Well
23stimulation treatments are not underground injection or disposal
24projects that are approved under Sections 1724.6 to 1724.10,
25inclusive, of Title 14 of the California Code of Regulations.

end insert
begin insert
26

begin insert3158.end insert  

“Acid well stimulation treatment” means a well
27stimulation treatment that uses, in whole or in part, the application
28of one or more acids to the well or underground geologic formation
29with the intent to cause or enhance the production of oil or gas
30from a well. The acid well stimulation treatment may be at any
31applied pressure and may be used in combination with hydraulic
32fracturing treatments or other well stimulation treatments.

end insert
33

3160.  

(a) On or before January 1, 2015, the Secretary of the
34Natural Resources Agency shall cause to be conducted an
35independent scientific study onbegin insert well stimulation treatments,
36including, but not limited to,end insert
hydraulic fracturingbegin insert and acid well
37stimulationend insert
treatments. The scientific study shall evaluate the
38hazards and risks and potential hazards and risks thatbegin delete hydraulic
39fracturingend delete
begin insert well stimulationend insert treatments pose to natural resources
P7    1and public, occupational, and environmental health and safety.
2The scientific study shall do all of the following:

3(1) Follow the well-established standard protocols of the
4scientific profession, including, but not limited to, the use of
5recognized experts, peer review, and publication.

6(2) Identify areas with existing and potential conventional and
7unconventional oil and gas reserves wherebegin delete hydraulic fracturingend delete
8begin insert well stimulation end insert treatments are likely to spur or enable oil and gas
9exploration and production.

10(3) begin insert(A)end insertbegin insertend insert Evaluate all aspects of hydraulic fracturing, including,
11but not limited to, the hydraulic fracturing treatment, additive and
12water transportation to and from the well site, mixing and handling
13of the hydraulic fracturing fluids and additives onsite,begin insert the use and
14potential for use of nontoxic additives and the use or reuse of
15treated or produced water in hydraulic fracturing fluids,end insert

16 wastewater and waste hydraulic fracturing fluid handling,
17treatment, and disposal.

begin insert

18(B) Evaluate all aspects of acid well stimulation treatments,
19including the use and potential use of large-scale acidization
20treatments and waste handling, treatment, and disposal.

end insert

21(4) Consider, at a minimum, atmospheric emissions,begin insert including
22potential greenhouse gas emissions,end insert
the potential degradation of
23air quality,begin insert potential impacts on wildlife, native plants, and habitat,end insert
24 potential water and surface contamination,begin insert potential noise
25pollution,end insert
induced seismicity, and the ultimate disposition,
26transport, transformation, and toxicology ofbegin insert well stimulation
27treatments, including acid well stimulation fluids,end insert
hydraulic
28fracturing fluids, and waste hydraulic fracturing fluidsbegin insert and acid
29well stimulationend insert
in the environment.

30(5) Include a hazard assessment and risk analysis addressing
31occupational and environmental exposures tobegin insert well stimulation
32treatments, includingend insert
hydraulic fracturingbegin delete treatments andend delete
33begin insert treatments,end insert hydraulic fracturing treatment-related processesbegin insert, acid
34well stimulation treatments, acid well stimulation treatment-related
35processes, end insert
and the corresponding impacts on public health and
36safety with the participation of the Office of Environmental Health
37Hazard Assessment.

38(6) Clearly identify where additional information is necessary
39to inform and improve the analyses.

P8    1(b) (1) On or before January 1, 2015, the division, in
2consultation with the Department of Toxic Substances Control,
3the State Air Resources Board, the State Water Resources Control
4Board, the Department of Resources Recycling and Recovery, and
5any local air districts and regional water quality control boards in
6areas wherebegin insert well stimulation treatments, including acid well
7stimulation treatments andend insert
hydraulic fracturing treatments may
8occur, shall adopt rules and regulations specific tobegin delete hydraulic
9fracturingend delete
begin insert well stimulation treatmentsend insert. The rules and regulations
10shall include, but are not limited to, revisions, as needed, to the
11rules and regulations governing construction of wells and well
12casings to ensure integrity of wells, well casings, and the geologic
13and hydrologic isolation of the oil and gas formation during and
14followingbegin delete hydraulic fracturingend deletebegin insert well stimulation treatmentsend insert, and
15full disclosure of the composition and disposition ofbegin insert well
16stimulation fluids, including, but not limited to,end insert
hydraulic fracturing
17fluidsbegin insert, acid well stimulation fluids,end insert and waste hydraulic fracturing
18begin insert and acid stimulationend insert fluids.

19(2) Full disclosure of the composition and disposition ofbegin insert well
20stimulation fluids, including, but not limited to, end insert
hydraulic
21fracturing fluidsbegin insert and acid stimulation treatment fluids,end insert shall, at a
22minimum, include:

23(A) The date of thebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert
24 treatment.

25(B) A complete list of the names, Chemical Abstract Service
26(CAS) numbers, and maximum concentration, in percent by mass,
27of each and every chemical constituent of thebegin delete hydraulic fracturingend delete
28begin insert well stimulation treatment end insert fluids used. If a CAS number does not
29exist for a chemical constituent, the well owner or operator may
30provide another unique identifier, if available. Chemical
31information claimed as a trade secret, pursuant to subdivision (j),
32shall be identified as such and reported as described in subdivision
33(j).

34(C) The trade name, the supplier, and a brief description of the
35intended purpose of each additive contained in thebegin delete hydraulic
36fracturing fluidend delete
begin insert well stimulation treatment fluidend insert.

37(D) The total volume of base fluid used during thebegin delete hydraulic
38fracturingend delete
begin insert well stimulationend insert treatment, and the identification of
39whether the base fluid is water suitable for irrigation or domestic
P9    1purposes, water not suitable for irrigation or domestic purposes,
2or a fluid other than water.

3(E) The source, volume, and specific composition and
4disposition of all water, including, but not limited to, all water
5used as base fluid during thebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert
6 treatment and recovered from the well following thebegin delete hydraulic
7fracturingend delete
begin insert well stimulation end insert treatment that is not otherwise reported
8as produced water pursuant to Section 3227.begin insert Any repeated reuse
9of treated or untreated water for well stimulation treatments and
10well stimulation treatment-related activities shall be identified.end insert

11(F) The specific composition and disposition of all begin delete hydraulic
12 fracturingend delete
begin insert well stimulation treatmentend insert fluids, including waste fluids,
13other than water.

14(G) Any radiological components or tracers injected into the
15well as part of, or in order to evaluate, thebegin delete hydraulic fracturingend delete
16begin insert well stimulation end insert treatment, a description of the recovery method,
17if any, for those components or tracers, the recovery rate, and
18specific disposal information for recovered components or tracers.

19(H) The radioactivity of the recoveredbegin delete hydraulic fracturingend deletebegin insert well
20stimulation end insert
fluids.

21(I) The location of the portion of the well subject to thebegin delete hydraulic
22fracturingend delete
begin insert well stimulationend insert treatment and the extent of the fracturing
23begin insert or other modification, if any,end insert surrounding the well induced by the
24treatment.

begin delete

25(3) (A) A hydraulic fracturing treatment that is applied to a
26well where cyclic steam injection is approved pursuant to Section
271724.8 of Title 14 of the California Code of Regulations, and that
28is distinct from the process described under Section 3157, is subject
29to this section.

30(B) A cyclic steam injection process as described in Section
313157 is not subject to this section.

end delete

32(c) (1) Through the consultation process described in paragraph
33(1) of subdivision (b), the division shallbegin delete collaboratelyend delete
34begin insert collaborativelyend insert identify and delineate the existing statutory
35authority and regulatory responsibility relating tobegin delete hydraulic
36fracturingend delete
begin insert well stimulationend insert treatments andbegin delete hydraulic fracturingend delete
37begin insert well stimulation end insert treatment-related activities of the Department of
38Toxic Substances Control, the State Air Resources Board, any
39local air districts, the State Water Resources Control Board, the
40Department of Resources Recycling and Recovery, any regional
P10   1water quality control board, and other public entities, as applicable.
2This shall include how the respective authority, responsibility, and
3notification and reporting requirements associated with begin delete hydraulic
4 fracturingend delete
begin insert well stimulationend insert treatments andbegin delete hydraulic fracturingend delete
5begin insert well stimulationend insert treatment-related activities are divided among
6each public entity.

7(2) On or before January 1, 2015, the division shall enter into
8formal agreements with the Department of Toxic Substances
9Control, the State Air Resources Board, any local air districts where
10begin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatments may occur, the
11State Water Resources Control Board, the Department of Resources
12Recycling and Recovery, and any regional water quality control
13board wherebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatments may
14occur, clearly delineating respective authority, responsibility, and
15notification and reporting requirements associated withbegin delete hydraulic
16fracturingend delete
begin insert well stimulationend insert treatments andbegin delete hydraulic fracturingend delete
17begin insert well stimulationend insert treatment-related activitiesbegin insert, including air and
18water quality monitoring,end insert
in order to promote regulatory
19transparency and accountability.

20(3) The agreements under paragraph (2) shall specify the
21appropriate public entity responsible for air and water quality
22monitoring and the safe disposal of materials in landfills, include
23trade secret handling protocols, if necessary, and provide for ready
24public access to information related tobegin delete hydraulic fracturingend deletebegin insert well
25stimulation end insert
treatments and related activities.

26(d) (1) Notwithstanding any other law or regulation, prior to
27performing abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment on a
28well, the operator shall apply for a permit to perform abegin delete hydraulic
29fracturingend delete
begin insert well stimulationend insert treatment with the supervisor or district
30deputy. The permit application shall contain the pertinent data the
31supervisor requires on printed forms supplied by the division or
32on other forms acceptable to the supervisor. The information
33provided in the permit application shall include, but is not limited
34to, the following:

35(A) The well identification number and location.

36(B) The time period during which thebegin delete hydraulic fracturingend deletebegin insert well
37stimulation end insert
treatment is planned to occur.

38(C) An estimate of the amount of water to be used in the
39treatment and its source.

P11   1(D) A complete list of the names, Chemical Abstract Service
2(CAS) numbers, and estimated concentrations, in percent by mass,
3of each and every chemical constituent of thebegin delete hydraulic fracturingend delete
4begin insert well stimulation end insert fluids planned to be used in the treatment. If a
5CAS number does not exist for a chemical constituent, the well
6owner or operator may provide another unique identifier, if
7available. Chemical information claimed as a trade secret, pursuant
8to subdivision (j), shall be identified as such and reported as
9described in subdivision (j).

10(E) The planned location of thebegin delete hydraulic fracturingend deletebegin insert well
11stimulationend insert
treatment on the well bore and the estimated length,
12height, and direction of the induced fracturesbegin insert or other planned
13modification, if anyend insert
.

begin insert

14(F) A groundwater monitoring plan. A groundwater monitoring
15plan is not required if the appropriate regional water quality
16control board confirms that the well subject to the proposed well
17stimulation treatment does not or will not penetrate or does not
18or will not influence an aquifer that is designated for a beneficial
19use. The groundwater monitoring plan shall include, at a minimum,
20all of the following information:

end insert
begin insert

21(i) The current water quality of the groundwater basin through
22which the well subject to the proposed well stimulation treatment
23is or will be drilled that is sufficient to characterize the quality of
24any aquifer through which the well is or will be drilled.

end insert
begin insert

25(ii) An estimate of the zone of influence of the well subject to
26the proposed well stimulation treatment.

end insert
begin insert

27(iii) Water quality data or a plan to obtain data regarding the
28presence and concentration of the constituents to be used in, or
29that can be influenced by, the well subject to the proposed well
30stimulation treatment.

end insert
begin insert

31(iv) A plan that specifies sites for monitoring wells designed to
32detect contamination due to operation of the well subject to the
33proposed well stimulation treatment until the well is plugged and
34abandoned. The plan shall also include provisions for emergency
35implementation in the event of well or well casing failure or other
36event with the potential to contaminate groundwater.

end insert
begin insert

37(G) A waste and wastewater disposal plan.

end insert

38(2) (A) The supervisor or district deputy shall review the
39begin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment permit application
40and may approve the permit if the application is complete.

P12   1(B) Abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment or repeat
2begin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment shall not be
3performed on any well without a valid permit that the supervisor
4or district deputy has approved.

5(C) A permit describing abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert
6 treatment that presents unreasonable risk or is incomplete shall
7not be approved.

8(3) Thebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment shall be
9completed within one year of the issuance of the permit.

10(4) Within five business days of issuing a permit to perform a
11begin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment, the division shall
12provide a copy of the permit to the appropriate regional water
13quality control board or boards and to the local planning entity
14where the well, including its subsurface portion, is located. The
15division shallbegin insert alsoend insert post the permit on the publicly accessible portion
16of its Internet Web sitebegin insert within end insertbegin insertfive business days of issuing a
17permitend insert
.

18(5) begin deleteAt least 30 calendar days prior to commencing a hydraulic
19fracturing treatment, the operator end delete
begin insert(A)end insertbegin insertend insertbegin insertThe division end insertshall provide
20a copy of the approvedbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert
21 treatment permit to everybegin insert tenant of the surface property and everyend insert
22 surface property owner or authorized agent of that owner whose
23property line location is one of the following:

begin delete

24(A)

end delete

25begin insert(i)end insert Within a 1,500 foot radius of the wellhead.

begin delete

26(B)

end delete

27begin insert(ii)end insert Within 500 feet from the horizontal projection of all
28subsurface portions of the designated well to the surface.

begin insert

29(B) A well stimulation treatment shall not commence before 30
30calendar days after the permit copies pursuant to subparagraph
31(A) are provided.

end insert

32(6) (A) A property owner notified pursuant to paragraph (5)
33may request the regional water quality control board to perform
34water quality sampling and testing on any water well suitable for
35drinking or irrigation purposes and on any surface water suitable
36for drinking or irrigation purposes as follows:

37(i) Baseline measurements prior to the commencement of the
38begin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment.

P13   1(ii) Followup measurements after thebegin delete hydraulic fracturingend deletebegin insert well
2stimulation end insert
treatment on the same schedule as the pressure testing
3of the well casing of thebegin delete hydraulically-fracturedend deletebegin insert treatedend insert well.

4(B) The regional water quality control board may contract with
5an independent third party that adheres to board-specified standards
6and protocols to perform the water sampling and testing.

7(7) begin deleteThe end deletebegin insertIf warranted, theend insertbegin insert end insertregional water quality control board
8shallbegin insert have the authority toend insert retainbegin delete and archive sufficientend deletebegin insert an
9appropriately prepared and stored baselineend insert
samplebegin insert or samplesend insert
10 collected pursuant to paragraph (6)begin delete to permit a reasonable number
11of additional analysesend delete
begin insert for end insertbegin insertas long as the planned analytical method
12or methods would provide valid resultsend insert
.

13(8) Thebegin delete operator shall provide theend delete divisionbegin delete withend deletebegin insert shall retainend insert a
14list of the entities and property owners notified pursuant to
15paragraphs (4) and (5).

16(9) The operator shall provide notice to the division at least 72
17hours prior to the actual start of thebegin delete hydraulic fracturingend deletebegin insert well
18stimulationend insert
treatment in order for the division to witness the
19treatment.

begin delete

20(e) On and after January 1, 2015, the supervisor or district
21deputy shall not issue a hydraulic fracturing treatment permit for
22any well until the independent scientific study in subdivision (a)
23is completed and peer reviewed by independent scientific experts.

end delete
begin insert

24(e) The Secretary of the Natural Resources Agency shall notify
25the Joint Legislative Budget Committee and the chairs of the
26Assembly Natural Resources, Senate Environmental Quality, and
27Senate Natural Resources and Water Committees on the progress
28of the independent scientific study on well stimulation and related
29activities. The first progress report shall be provided to the
30Legislature on or before April 1, 2014, and progress reports shall
31continue every four months thereafter until the independent study
32is completed, including a peer review of the study by independent
33scientific experts.

end insert

34(f) If abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment is
35performed on a well, a supplier that performs any part ofbegin delete hydraulic
36fracturingend delete
begin insert the stimulationend insert or provides additives directly to the
37operator for abegin delete hydraulic fracturingend deletebegin insert well stimulation end insert treatment shall
38furnish the operator with information needed for the operator to
39comply with subdivision (g). If a supplier claims trade secret
40protection pursuant to subdivision (j), the supplier shall notify the
P14   1operator and provide to the operator substitute information, as
2described in subdivision (j), suitable for public disclosure. This
3information shall be provided as soon as possible but no later than
430 days following the conclusion of thebegin delete hydraulic fracturingend deletebegin insert well
5stimulationend insert
treatment.

6(g) (1) Within 60 days following cessation of abegin delete hydraulic
7fracturingend delete
begin insert well stimulationend insert treatment on a well, the operator shall
8post or cause to have posted to an Internet Web site designated or
9maintained by the division and accessible to the public, all of the
10begin delete hydraulic fracturingend deletebegin insert well stimulationend insert fluid composition and
11disposition information required to be collected pursuant to rules
12and regulations adopted under subdivision (b), including well
13identification number and location.begin insert This shall include the collected
14water quality data, which the operator shall report electronically
15to the State Water Resources Control Board.end insert

16(2) The division’s Internet Web site shall be operationalbegin delete byend deletebegin insert on
17or before end insert
January 1, 2016, and the division may direct reporting
18to an alternative Internet Web site developed by the Ground Water
19Protection Council and the Interstate Oil and Gas Compact
20Commission in the interim. The reported information shall be
21organized on the division’s Internet Web site in a format, such as
22a spreadsheet, that allows the public to easily search and aggregate,
23to the extent practicable, each type of information required to be
24collected pursuant to subdivision (b) using search functions on
25that Internet Web site.

26(h) The operator is responsible for compliance with this section.

27(i) (1) All geologic features within a distance reflecting an
28appropriate safety factor of the fracture zonebegin insert for well stimulation
29treatments that fracture the formationend insert
andbegin delete havingend deletebegin insert that haveend insert the
30potential to either limit or facilitate the migration of fluids outside
31of the fracturebegin delete zone,end deletebegin insert zoneend insert shall be identified and added to the well
32history. Geologic features include, but are not limited to, seismic
33faults.

34(2) For the purposes of this section, the “fracture zone” is
35defined as the volume surrounding the well bore where fractures
36were created or enhanced by thebegin delete hydraulic fracturingend deletebegin insert well
37stimulationend insert
treatment. The safety factor shall be at least five and
38may vary depending upon geologic knowledge.

39(j) (1) The supplier may claim trade secret protection for the
40chemical composition of additivesbegin insert, whose use is not otherwise
P15   1prohibited by law,end insert
pursuant to Section 1060 of the Evidence Code,
2or the Uniform Trade Secrets Act (Title 5 (commencing with
3Section 3426) of Part 1 of Division 4 of the Civil Code).

4(2) If a supplier believes that information regarding a chemical
5constituent of abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert fluid is a
6trade secret, the supplier shall nevertheless disclose the information
7to the division in conjunction with abegin delete hydraulic fracturingend deletebegin insert well
8stimulationend insert
treatment permit application, if not previously
9disclosed, within 30 days following cessation ofbegin delete hydraulic
10fracturingend delete
begin insert well stimulationend insert on a well, and shall notify the division
11in writing of that belief.

begin insert

12(3) In order to substantiate the trade secret claim to the division,
13the supplier shall provide the following information to the division:

end insert
begin insert

14(A) The extent to which the information is known outside the
15business of the supplier submitting the information, and whether
16or not all individuals with that knowledge are bound by
17nondisclosure agreements.

end insert
begin insert

18(B) The extent to which the information is known by the
19supplier’s employees and others involved in the supplier’s business,
20and whether or not all those individuals are bound by
21nondisclosure agreements.

end insert
begin insert

22(C) The extent of measures taken by the supplier to restrict
23access to and guard the secrecy of the information, and whether
24or not the supplier plans to continue utilizing those measures.

end insert
begin insert

25(D) The estimated value of the information to the supplier and
26its competitors.

end insert
begin insert

27(E) The estimated amount of effort and money expended by the
28supplier in developing the information, and a description of the
29nature and extent of harm that would be caused if the information
30were made public.

end insert
begin insert

31(F) The estimated ease or difficulty with which the information
32could be properly acquired or duplicated by others, and an
33explanation of why the chemical identity is not readily discoverable
34through reverse engineering.

end insert
begin insert

35(G) Copies of, or references to, any pertinent trade secret or
36other confidentiality determinations previously made by the
37division or other public agencies, including court orders or
38decisions.

end insert
begin insert

39(4) If the division determines that the information provided in
40support of a request for trade secret protection pursuant to
P16   1paragraph (3) is incomplete, the division shall notify the supplier
2and the supplier shall have 30 days to complete the submission.
3An incomplete submission does not meet the substantive criteria
4for trade secret designation.

end insert
begin insert

5(5) If the division determines that the information provided in
6support of a request for trade secret protection does not meet the
7substantive criteria for trade secret designation, the department
8shall notify the supplier by certified mail of its determination. The
9division shall release the information to the public, but not earlier
10than 60 days after the date of mailing the determination, unless,
11prior to the expiration of the 60-day period, the supplier obtains
12an action in an appropriate court for a declaratory judgment that
13the information is subject to protection or for a preliminary
14injunction prohibiting disclosure of the information to the public
15and provides notice to the division of the court order. If no order
16or declaratory judgment is obtained, the division shall release the
17information to the public by revising the information provided
18pursuant to subdivision (g).

end insert
begin delete

19(3)

end delete

20begin insert(6)end insert The supplier is not required to disclose trade secret
21information to the operator.

begin delete

22(4)

end delete

23begin insert(7)end insert This subdivision does not permit a supplier to refuse to
24disclose the information required pursuant to this section to the
25division.

begin delete

26(5)

end delete

27begin insert(8)end insert To comply with the public disclosure requirements of this
28section, the supplier shall indicate where trade secret information
29has been withheld andbegin delete the specific name of a chemical constituent
30shall be replaced with the chemical family name or similar
31descriptor associated with the trade secret chemical informationend delete

32begin insert provide substitute information for public disclosure. The substitute
33information shall be a list, in any order, of the chemical
34constituents of the additive, including CAS identification numbers,
35whose specific composition is a trade secret. Information on the
36relative amounts or concentration of the constituents of additives
37whose specific composition is a trade secret shall not be publicly
38disclosed. The division shall review and approve the supplied
39substitute informationend insert
.

begin delete

40(6)

end delete

P17   1begin insert(9)end insert Except as provided in subparagraph (B) of paragraphbegin delete (8)end delete
2begin insert (11)end insert, the division shall protect from disclosure any trade secret
3begin delete designated as suchend deletebegin insert claimedend insert by the supplier, if that trade secret is
4not a public record.

begin delete

5(7)

end delete

6begin insert(10)end insert The supplier shall notify the division in writing within 30
7days of any changes to information provided to the division to
8support a trade secret claimbegin insert, including if the information is no
9longer a trade secretend insert
.

begin delete

10(8)

end delete

11begin insert(11)end insert Upon receipt of a request for the release of information to
12the public, which includes information the supplier has notified
13the division is a trade secret and is not a public record, the
14following procedure applies:

15(A) The division shall notify the supplier of the request in
16writing by certified mail, return receipt requested.

17(B) The division shall release the information to the public, but
18not earlier than 60 days after the date of mailing the notice of the
19request for information, unless, prior to the expiration of the 60-day
20period, the supplier obtains an action in an appropriate court for a
21declaratory judgment that the information is subject to protection
22or for a preliminary injunction prohibiting disclosure of the
23information to the public and provides notice to the division of
24that action.

begin delete

25(9)

end delete

26begin insert(12)end insert (A) Except as provided in subparagraph (B) of paragraph
27begin delete (8)end deletebegin insert (11)end insert, trade secret information is not a public record and shall
28not be disclosed to anyone except to an officer or employee of the
29division, the state,begin insert local governments, including, but not limited
30to,end insert
local air districts, or the United States, in connection with the
31official duties of that officer or employee, to a health professional
32begin insert if the requirements of subparagraph (B) are metend insert, under any law
33for the protection of health, or to contractors with the division or
34begin delete the stateend deletebegin insert other government entitiesend insert andbegin delete itsend deletebegin insert theirend insert employees if, in
35the opinion of the division, disclosure is necessary and required
36for the satisfactory performance of a contract, for performance of
37work, or to protect health and safety.

begin insert

38(B) In order to receive trade secret information, a health
39professional shall have a reasonable basis to suspect all of the
40following:

end insert
begin insert

P18   1(i) The information is needed for purposes of diagnosis or
2treatment of a patient.

end insert
begin insert

3(ii) The patient being diagnosed or treated has been exposed
4to one or more chemicals subject to trade secret nondisclosure.

end insert
begin insert

5(iii) Knowledge of the specific chemical identity of the chemical
6or chemicals will assist in diagnosis or treatment of the patient.

end insert
begin delete

7(B)

end delete

8begin insert(C)end insert A health professional may share trade secret information
9with other persons as may be professionally necessary,begin insert in order
10to diagnose or treat a patient,end insert
including, but not limited to, the
11patient and other healthbegin delete professionals. Confidentiality of the trade
12secret information shall be maintained. The holder of the trade
13secret may request a confidentiality agreement consistent with the
14requirements of this subdivision to whom this information is
15disclosed as soon as circumstances permit. If necessary, a procedure
16for timely disclosure by the division in the event of an emergency
17shall be identified.end delete
begin insert professionals, subject to state and federal laws
18restricting disclosure of medical records including, but not limited
19to, Chapter 2 (commencing with Section 56.10) of Part 2.6 of
20Division 1 of the Civil Code.end insert

begin insert

21(D) The division shall develop a procedure for the timely
22disclosure of trade secret information in the event of an emergency
23or to diagnose or treat a patient pursuant to this subdivision.

end insert
begin insert

24(E) Confidentiality of trade secret information from public
25disclosure shall be maintained by those who receive trade secret
26information pursuant to the provisions of this subdivision, subject
27to the enforcement provisions of this division, and any additional
28 applicable state and federal law.

end insert
begin insert

29(F) For purposes of this paragraph, “health professional”
30means any person licensed or certified pursuant to Division 2
31(commencing with Section 500) of the Business and Professions
32Code, the Osteopathic Initiative Act, the Chiropractic Initiative
33Act, or the Emergency Medical Services System and the Prehospital
34Emergency Medical Care Personnel Act (Division 2.5 (commencing
35with Section 1797) of the Health and Safety Code).

end insert
begin insert

36(13) (A) The supplier may provide trade secret information in
37order to protect public health to any health professional,
38toxicologist, or epidemiologist who is employed in the field of
39public health and who provides a written statement of need and
40confidentiality agreement. The written statement of need shall
P19   1include the public health purposes and shall explain the reason
2the disclosure of the specific chemical and its concentration is
3required in lieu of information describing the properties and effects
4of the chemical.

end insert
begin insert

5(B) Confidentiality of trade secret information from public
6disclosure shall be maintained by those who receive trade secret
7information pursuant to the provisions of this paragraph subject
8to the enforcement provisions of this division and any additional
9applicable state and federal law.

end insert

10(k) This section does not apply to routine pressure tests to
11monitor the integrity of wells and well casings.

12(l) A well granted confidential status pursuant to Section 3234
13shall comply with this section, with the exception of the disclosure
14ofbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert fluids pursuant to
15subdivision (g) which shall not be required until the confidential
16status of the well ceases.

17(m) The division shall perform random periodic spot check
18inspections to ensure that the information provided onbegin delete hydraulic
19fracturingend delete
begin insert well stimulationend insert treatments is accurately reported,
20including that the estimates provided prior to the commencement
21of thebegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment are reasonably
22consistent with the well history.

23(n) Where the division shares jurisdiction over a well or the
24begin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment on a well with a
25federal entity, the division’s rules and regulations shall govern the
26begin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment of the well.

27

SEC. 3.  

Section 3213 of the Public Resources Code is amended
28to read:

29

3213.  

The history shall show the location and amount of
30sidetracked casings, tools, or other material, the depth and quantity
31of cement in cement plugs, the shots of dynamite or other
32explosives, and the results of production and other tests during
33drilling operations. All data onbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert
34 treatments pursuant to Section 3160 shall be recorded in the history.

35

SEC. 4.  

Section 3215 of the Public Resources Code is amended
36to read:

37

3215.  

(a) Within 60 days after the date of cessation of drilling,
38rework,begin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment, or
39abandonment operations, or the date of suspension of operations,
40the operator shall file with the district deputy, in a form approved
P20   1by the supervisor, true copies of the log, core record, and history
2of work performed, and, if made, true and reproducible copies of
3all electrical, physical, or chemical logs, tests, or surveys. Upon a
4showing of hardship, the supervisor may extend the time within
5which to comply with this section for a period not to exceed 60
6additional days.

7(b) The supervisor shall include information or electronic links
8to information provided pursuant to subdivision (g) of Section
93160 on existing publicly accessible maps on the division’s Internet
10Web site, and make the information available such thatbegin delete hydraulic
11fracturingend delete
begin insert well stimulationend insert treatment and related information are
12associated with each specific well. If data is reported on an Internet
13Web site not maintained by the division pursuant to paragraph (2)
14of subdivision (g) of Section 3160, the division shall provide
15electronic links to that Internet Web site. The public shall be able
16to search and sort the hydraulicbegin delete fracturing treatmentend deletebegin insert well
17stimulationend insert
and related information by at least the following
18criteria:

19(1) Geographic area.

20(2) Additive.

21(3) Chemical constituent.

22(4) Chemical Abstract Service number.

23(5) Time period.

24(6) Operator.

25(c) Notwithstanding Section 10231.5 of the Government Code,
26on or before January 1, 2016, and annually thereafter, the
27supervisor shall, in compliance with Section 9795 of the
28Government Code, prepare and transmit to the Legislature a
29comprehensive report onbegin delete hydraulic fracturingend deletebegin insert well stimulation
30treatmentsend insert
in the exploration and production of oil and gas
31resources in California. The report shall include aggregated data
32of all of the information required to be reported pursuant to Section
333160 reported by the district, county, and operator. The report also
34shall include relevant additional information, as necessary,
35including, but not limited to, all the following:

36(1) Aggregated data detailing the disposition of any produced
37water from wells that have undergonebegin delete hydraulic fracturingend deletebegin insert well
38stimulation end insert
treatments.

P21   1(2) Aggregated data describing the formations where wells have
2receivedbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatments including
3the range of safety factors used and fracture zone lengths.

4(3) The number of emergency responses to a spill or release
5associated with abegin delete hydraulic fracturingend deletebegin insert well stimulationend insert treatment.

6(4) Aggregated data detailing the number of times trade secret
7information was not provided to the public, by county and by each
8company, in the preceding year.

9(5) Data detailing the loss of well and well casing integrity in
10the preceding year for wells that have undergonebegin delete hydraulic
11fracturingend delete
begin insert well stimulationend insert treatment. For comparative purposes,
12data detailing the loss of well and well casing integrity in the
13preceding year for all wells shall also be provided. The cause of
14each well and well casing failure, if known, shall also be provided.

15(6) The number of spot check inspections conducted pursuant
16to subdivision (m) of Section 3160, including the number of
17inspections where the composition ofbegin delete hydraulic fracturingend deletebegin insert well
18stimulationend insert
fluids were verified and the results of those inspections.

19(7) The number ofbegin delete hydraulic fracturingend deletebegin insert well stimulationend insert
20 treatments witnessed by the division.

21(8) The number of enforcement actions associated withbegin delete hydraulic
22fracturingend delete
begin insert well stimulationend insert treatments, including, but not limited
23to, notices of deficiency, notices of violation, civil or criminal
24enforcement actions, and any penalties assessed.

25(d) The report shall be made publicly available and an electronic
26version shall be available on the division’s Internet Web site.

27

SEC. 5.  

Section 3236.5 of the Public Resources Code is
28amended to read:

29

3236.5.  

(a) A person who violates this chapter or a regulation
30implementing this chapter is subject to a civil penalty not to exceed
31twenty-five thousand dollars ($25,000) for each violation. A person
32who commits a violation of Article 3 (commencing with Section
333150) is subject to a civil penalty of not less than ten thousand
34dollars ($10,000) and not to exceed twenty-five thousand dollars
35($25,000) per day per violation. An act of God and an act of
36vandalism beyond the reasonable control of the operator shall not
37be considered a violation. The civil penalty shall be imposed by
38an order of the supervisor pursuant to Section 3225 upon a
39determination that a violation has been committed by the person
40charged. The imposition of a civil penalty under this section shall
P22   1be in addition to any other penalty provided by law for the
2violation. When establishing the amount of the civil penalty
3pursuant to this section, the supervisor shall consider, in addition
4to other relevant circumstances, all of the following:

5(1) The extent of harm caused by the violation.

6(2) The persistence of the violation.

7(3) The pervasiveness of the violation.

8(4) The number of prior violations by the same violator.

9(b) An order of the supervisor imposing a civil penalty shall be
10reviewable pursuant to Article 6 (commencing with Section 3350).
11When the order of the supervisor has become final and the penalty
12has not been paid, the supervisor may apply to the appropriate
13superior court for an order directing payment of the civil penalty.
14The supervisor may also seek from the court an order directing
15that production from the well or use of the production facility that
16is the subject of the civil penalty order be discontinued until the
17violation has been remedied to the satisfaction of the supervisor
18and the civil penalty has been paid.

19(c) Any amount collected under this section shall be deposited
20in the Oil, Gas, and Geothermal Administrative Fund.

21

SEC. 6.  

Section 3401 of the Public Resources Code is amended
22to read:

23

3401.  

(a) The proceeds of charges levied, assessed, and
24collected pursuant to this article upon the properties of every person
25operating or owning an interest in the production of a well shall
26be used exclusively for the support and maintenance of the
27department charged with the supervision of oil and gas operations.

28(b) Notwithstanding subdivision (a), the proceeds of charges
29levied, assessed, and collected pursuant to this article upon the
30properties of every person operating or owning an interest in the
31production of a well undergoing abegin delete hydraulic fracturingend deletebegin insert well
32stimulationend insert
treatment, may be used by public entities, subject to
33appropriation by the Legislature, for all costs associated with
34begin delete hydraulic fracturingend deletebegin insert well stimulation end insert treatments including scientific
35studies required to evaluate the treatment, inspections, and any air
36and water quality sampling, monitoring, and testing performed by
37public entities.

38

SEC. 7.  

No reimbursement is required by this act pursuant to
39Section 6 of Article XIII B of the California Constitution because
40the only costs that may be incurred by a local agency or school
P23   1district will be incurred because this act creates a new crime or
2infraction, eliminates a crime or infraction, or changes the penalty
3for a crime or infraction, within the meaning of Section 17556 of
4the Government Code, or changes the definition of a crime within
5the meaning of Section 6 of Article XIII B of the California
6Constitution.


CORRECTIONS:

Heading--Lines 2 and 4.

Text--Pages 7 and 11.




O

Corrected 6-19-13—See last page.     94