Amended in Assembly June 25, 2013

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

(Principal coauthor: Assembly Member Gray)

(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: well stimulation.

(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 terms well stimulation treatment, hydraulic fracturing, 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 on well stimulation treatments, including acid well stimulation and hydraulic fracturing treatments. The bill would require an operator of a well to record and include all data on well stimulation 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 where well stimulation treatments may occur, on or before January 1, 2015, to adopt rules and regulations specific to well stimulation, including governing the construction of wells and well casings and full disclosure of the composition and disposition of well stimulation fluids. The bill would require an operator to apply for a permit, as specified, with the supervisor or district deputy, prior to performing a well stimulation treatment of a well and would prohibit the operator from either conducting a new well stimulation treatment or repeating a well stimulation 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 commence a well stimulation treatment, 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 the well stimulation 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 during well stimulation treatments, as specified. The bill would 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, 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 approved well stimulation treatment permit to specified tenants and property owners at least 30 days prior to commencing a well stimulation treatment. The bill would require the operator to provide notice to the division at least 72 hours prior to the actual start of a well stimulation treatment in order for the division to witness the treatment. The bill would require the supplier, as defined, of the well stimulation treatment to provide to the operator, within 30 days following the conclusion of the treatment, certain information regarding the well stimulation fluid. The bill would require the operator, within 60 days of the cessation of a well stimulation treatment, to post or cause to have posted on an Internet Web site accessible to the public specified information on the well stimulation 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 regulationsbegin delete govern the well stimulation treatment of a well.end deletebegin insert apply in addition to all applicable federal law and regulations.end insert The bill would require a supplier claiming trade secret protection for the chemical composition of additives used in a well stimulation treatment to disclose the composition to the division, in conjunction with a well stimulation treatment permit application, but would, except as specified, prohibit those with access to the trade secret from disclosing it. Because 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 to well stimulation treatments 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 with well stimulation 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 on well stimulation 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. Other well
6stimulation treatments, in addition to hydraulic fracturing, are also
7critical to boosting oil and gas production.

8(b) Insufficient information is available to fully assess the
9science of the practice of hydraulic fracturing and other well
10stimulation treatment technologies inbegin delete Californiaend deletebegin insert California,end insert
11 including environmental, occupational, and public health hazards
12and risks.

13(c) Providing transparency and accountability to the public
14regarding well stimulation treatments, including, but not limited
15to, hydraulic fracturing, associated emissions to the environment,
16and the handling, processing, and disposal of well stimulation and
17related wastes, including from hydraulic fracturing, is of paramount
18concern.

P5    1(d) The Legislature encourages the use or reuse of treated or
2untreated water and produced water for well stimulation treatments
3and well stimulation treatment-related activities.

4

SEC. 2.  

Article 3 (commencing with Section 3150) is added
5to Chapter 1 of Division 3 of the Public Resources Code, to read:

6 

7Article 3.  Well Stimulation
8

 

9

3150.  

“Additive” means a substance or combination of
10substances added to a base fluid for purposes of preparing well
11stimulation treatment fluid which includes, but is not limited to,
12an acid stimulation treatment fluid or a hydraulic fracturing fluid.
13An additive may, but is not required to, serve additional purposes
14beyond the transmission of hydraulic pressure to the geologic
15formation. An additive may be of any phase and includes
16proppants.

17

3151.  

“Base fluid” means the continuous phase fluid used in
18the makeup of a well stimulation treatment fluid, including, but
19not limited to, an acid stimulation treatment fluid or a hydraulic
20fracturing fluid. The continuous phase fluid may include, but is
21not limited to, water, and may be a liquid or a hydrocarbon or
22nonhydrocarbon gas. A well stimulation treatment may use more
23than one base fluid.

24

3152.  

“Hydraulic fracturing” means a well stimulation
25treatment that, in whole or in part, includes the pressurized injection
26of hydraulic fracturing fluid or fluids into an underground geologic
27formation in order to fracture or with the intent to fracture the
28formation, thereby causing or enhancing, for the purposes of this
29division, the production of oil or gas from a well.

30

3153.  

“Hydraulic fracturing fluid” means a base fluid mixed
31with physical and chemical additives for the purpose of hydraulic
32fracturing. A hydraulic fracturing treatment may include more than
33one hydraulic fracturing fluid.

34

3154.  

“Proppants” means materials inserted or injected into
35the underground geologic formation that are intended to prevent
36fractures from closing.

37

3155.  

“Supplier” means an entity performing a well stimulation
38treatment or an entity supplying an additive or proppant directly
39to the operator for use in a well stimulation treatment.

P6    1

3156.  

“Surface property owner” means the owner of real
2property as shown on the latest equalized assessment roll or, if
3more recent information than the information contained on the
4assessment roll is available, the owner of record according to the
5county assessor or tax collector.

6

3157.  

begin delete“Well end deletebegin insertFor purposes of this article, “well end insertstimulation
7treatment” meansbegin delete aend deletebegin insert anyend insert treatmentbegin delete applied toend deletebegin insert ofend insert a wellbegin delete in orderend delete
8begin insert designedend insert to enhance oil and gas productionbegin insert or recovery, including,
9but not limited to, hydraulic fracturing and acid well stimulationend insert
.
10Well stimulation treatments include, but are not limited to,
11hydraulic fracturing treatments and acid well stimulation
12treatments. Well stimulation treatmentsbegin delete are not underground
13injection or disposal projects that are approved under Sections
141724.6 to 1724.10, inclusive, of Title 14 of the California Code of
15Regulations.end delete
begin insert do not include steam flooding, water flooding, or
16cyclic stend insert
begin inserteaming.end insert

17

3158.  

“Acid well stimulation treatment” means a well
18stimulation treatment that uses, in whole or in part, the application
19of one or more acids to the well or underground geologic formation
20with the intent to cause or enhance the production of oil or gas
21from a well. The acid well stimulation treatment may be at any
22applied pressure and may be used in combination with hydraulic
23fracturing treatments or other well stimulation treatments.

24

3160.  

(a) On or before January 1, 2015, the Secretary of the
25Natural Resources Agency shall cause to be conducted an
26independent scientific study on well stimulation treatments,
27including, but not limited to, hydraulic fracturing and acid well
28stimulation treatments. The scientific study shall evaluate the
29hazards and risks and potential hazards and risks that well
30stimulation treatments pose to natural resources and public,
31occupational, and environmental health and safety. The scientific
32study shall do all of the following:

33(1) Follow the well-established standard protocols of the
34scientific profession, including, but not limited to, the use of
35recognized experts, peer review, and publication.

36(2) Identify areas with existing and potential conventional and
37unconventional oil and gas reserves where well stimulation
38treatments are likely to spur or enable oil and gas exploration and
39production.

P7    1(3) (A) Evaluate all aspects of hydraulic fracturing, including,
2but not limited to, the hydraulic fracturing treatment, additive and
3water transportation to and from the well site, mixing and handling
4of the hydraulic fracturing fluids and additives onsite, the use and
5potential for use of nontoxic additives and the use or reuse of
6treated or produced water in hydraulic fracturing fluids, wastewater
7and waste hydraulic fracturing fluid handling, treatment, and
8disposal.

9(B) Evaluate all aspects of acid well stimulation treatments,
10including the use and potential use of large-scale acidization
11treatments and waste handling, treatment, and disposal.

12(4) Consider, at a minimum, atmospheric emissions, including
13potential greenhouse gas emissions, the potential degradation of
14air quality, potential impacts on wildlife, native plants, and habitat,
15potential water and surface contamination, potential noise pollution,
16induced seismicity, and the ultimate disposition, transport,
17transformation, and toxicology of well stimulation treatments,
18including acid well stimulation fluids, hydraulic fracturing fluids,
19and waste hydraulic fracturing fluids and acid well stimulation in
20the environment.

21(5) Include a hazard assessment and risk analysis addressing
22occupational and environmental exposures to well stimulation
23treatments, including hydraulic fracturing treatments, hydraulic
24fracturing treatment-related processes, acid well stimulation
25treatments, acid well stimulation treatment-related processes, and
26the corresponding impacts on public health and safety with the
27participation of the Office of Environmental Health Hazard
28Assessment.

29(6) Clearly identify where additional information is necessary
30to inform and improve the analyses.

31(b) (1) On or before January 1, 2015, the division, in
32consultation with the Department of Toxic Substances Control,
33the State Air Resources Board, the State Water Resources Control
34Board, the Department of Resources Recycling and Recovery, and
35any local air districts and regional water quality control boards in
36areas where well stimulation treatments, including acid well
37stimulation treatments and hydraulic fracturing treatments may
38occur, shall adopt rules and regulations specific to well stimulation
39treatments. The rules and regulations shall include, but are not
40limited to, revisions, as needed, to the rules and regulations
P8    1governing construction of wells and well casings to ensure integrity
2of wells, well casings, and the geologic and hydrologic isolation
3of the oil and gas formation during and following well stimulation
4treatments, and full disclosure of the composition and disposition
5of well stimulation fluids, including, but not limited to, hydraulic
6fracturing fluids, acid well stimulation fluids, and waste hydraulic
7fracturing and acid stimulation fluids.

8(2) Full disclosure of the composition and disposition of well
9stimulation fluids, including, but not limited to, hydraulic fracturing
10fluids and acid stimulation treatment fluids, shall, at a minimum,
11include:

12(A) The date of the well stimulation treatment.

13(B) A complete list of the names, Chemical Abstract Service
14(CAS) numbers, and maximum concentration, in percent by mass,
15of each and every chemical constituent of the well stimulation
16treatment fluids used. If a CAS number does not exist for a
17chemical constituent, the well owner or operator may provide
18another unique identifier, if available. Chemical information
19claimed as a trade secret, pursuant to subdivision (j), shall be
20identified as such and reported as described in subdivision (j).

21(C) The trade name, the supplier, and a brief description of the
22intended purpose of each additive contained in the well stimulation
23treatment fluid.

24(D) The total volume of base fluid used during the well
25stimulation treatment, and the identification of whether the base
26fluid is water suitable for irrigation or domestic purposes, water
27not suitable for irrigation or domestic purposes, or a fluid other
28than water.

29(E) The source, volume, and specific composition and
30disposition of all water, including, but not limited to, all water
31used as base fluid during the well stimulation treatment and
32recovered from the well following the well stimulation treatment
33that is not otherwise reported as produced water pursuant to Section
343227. Any repeated reuse of treated or untreated water for well
35stimulation treatments and well stimulation treatment-related
36activities shall be identified.

37(F) The specific composition and disposition of all well
38stimulation treatment fluids, including waste fluids, other than
39water.

P9    1(G) Any radiological components or tracers injected into the
2well as part of, or in order to evaluate, the well stimulation
3treatment, a description of the recovery method, if any, for those
4components or tracers, the recovery rate, and specific disposal
5information for recovered components or tracers.

6(H) The radioactivity of the recovered well stimulation fluids.

7(I) The location of the portion of the well subject to the well
8stimulation treatment and the extent of the fracturing or other
9modification, if any, surrounding the well induced by the treatment.

10(c) (1) Through the consultation process described in paragraph
11(1) of subdivision (b), the division shall collaboratively identify
12and delineate the existing statutory authority and regulatory
13responsibility relating to well stimulation treatments and well
14stimulation treatment-related activities of the Department of Toxic
15Substances Control, the State Air Resources Board, any local air
16districts, the State Water Resources Control Board, the Department
17of Resources Recycling and Recovery, any regional water quality
18control board, and other public entities, as applicable. This shall
19include how the respective authority, responsibility, and
20notification and reporting requirements associated with well
21stimulation treatments and well stimulation treatment-related
22activities are divided among each public entity.

23(2) On or before January 1, 2015, the division shall enter into
24formal agreements with the Department of Toxic Substances
25Control, the State Air Resources Board, any local air districts where
26well stimulation treatments may occur, the State Water Resources
27Control Board, the Department of Resources Recycling and
28Recovery, and any regional water quality control board where well
29stimulation treatments may occur, clearly delineating respective
30authority, responsibility, and notification and reporting
31requirements associated with well stimulation treatments and well
32stimulation treatment-related activities, including air and water
33quality monitoring, in order to promote regulatory transparency
34and accountability.

35(3) The agreements under paragraph (2) shall specify the
36appropriate public entity responsible for air and water quality
37monitoring and the safe disposal of materials in landfills, include
38trade secret handling protocols, if necessary, and provide for ready
39public access to information related to well stimulation treatments
40and related activities.

P10   1(d) (1) Notwithstanding any other law or regulation, prior to
2performing a well stimulation treatment on a well, the operator
3shall apply for a permit to perform a well stimulation treatment
4with the supervisor or district deputy. The permit application shall
5contain the pertinent data the supervisor requires on printed forms
6supplied by the division or on other forms acceptable to the
7supervisor. The information provided in the permit application
8shall include, but is not limited to, the following:

9(A) The well identification number and location.

10(B) The time period during which the well stimulation treatment
11is planned to occur.

12(C) An estimate of the amount of water to be used in the
13treatment and its source.

14(D) A complete list of the names, Chemical Abstract Service
15(CAS) numbers, and estimated concentrations, in percent by mass,
16of each and every chemical constituent of the well stimulation
17fluids planned to be used in the treatment. If a CAS number does
18not exist for a chemical constituent, the well owner or operator
19may provide another unique identifier, if available. Chemical
20information claimed as a trade secret, pursuant to subdivision (j),
21shall be identified as such and reported as described in subdivision
22(j).

23(E) The planned location of the well stimulation treatment on
24the well borebegin delete andend deletebegin insert,end insert the estimated length, height, and direction of
25the induced fractures or other planned modification, if anybegin insert, and
26the location of existing wells, including plugged and abandoned
27wells, that may be impacted by these fractures and modificationsend insert
.

28(F) A groundwater monitoring plan. A groundwater monitoring
29plan is not required if the appropriate regional water quality control
30board confirms that the well subject to the proposed well
31stimulation treatment does not or will not penetrate or does not or
32will not influence an aquifer that is designated for a beneficial use.
33The groundwater monitoring plan shall include, at a minimum, all
34of the following information:

35(i) The current water quality of the groundwater basin through
36which the well subject to the proposed well stimulation treatment
37is or will be drilled that is sufficient to characterize the quality of
38any aquifer through which the well is or will be drilled.

39(ii) An estimate of the zone of influence of the well subject to
40the proposed well stimulation treatment.

P11   1(iii) Water quality data or a plan to obtain data regarding the
2presence and concentration of the constituents to be used in, or
3that can be influenced by, the well subject to the proposed well
4stimulation treatment.

5(iv) A plan that specifies sites for monitoring wells designed to
6detect contamination due to operation of the well subject to the
7proposed well stimulation treatment until the well is plugged and
8abandoned. The plan shall also include provisions for emergency
9implementation in the event of well or well casing failure or other
10event with the potential to contaminate groundwater.

11(G) A waste and wastewater disposal plan.

12(2) (A) The supervisor or district deputy shall review the well
13stimulation treatment permit application and may approve the
14permit if the application is complete.

15(B) A well stimulation treatment or repeat well stimulation
16treatment shall not be performed on any well without a valid permit
17that the supervisor or district deputy has approved.

18(C) A permit describing a well stimulation treatment that
19presents unreasonable risk or is incomplete shall not be approved.

20(3) The well stimulation treatment shall be completed within
21one year of the issuance of the permit.

22(4) Within five business days of issuing a permit to perform a
23well stimulation treatment, the division shall provide a copy of the
24permit to the appropriate regional water quality control board or
25boards and to the local planning entity where the well, including
26its subsurface portion, is located. The division shall also post the
27permit on the publicly accessible portion of its Internet Web site
28within five business days of issuing a permit.

29(5) (A) The division shall provide a copy of the approved well
30stimulation treatment permitbegin insert and information on the water sampling
31and testing available through the regional water quality control
32boardend insert
to every tenant of the surface property and every surface
33property owner or authorized agent of that owner whose property
34line location is one of the following:

35(i) Within a 1,500 foot radius of the wellhead.

36(ii) Within 500 feet from the horizontal projection of all
37subsurface portions of the designated well to the surface.

38(B) A well stimulation treatment shall not commence before 30
39calendar days after the permit copies pursuant to subparagraph (A)
40are provided.

P12   1(6) (A) A property owner notified pursuant to paragraph (5)
2may request the regional water quality control board to performbegin insert,
3and the regional water quality control board or its contractors
4shall perform, end insert
water quality sampling and testing on any water
5well suitable for drinking or irrigation purposes and on any surface
6water suitable for drinking or irrigation purposes as follows:

7(i) Baseline measurements prior to the commencement of the
8 well stimulation treatment.

9(ii) Followup measurements after the well stimulation treatment
10on the same schedule as the pressure testing of the well casing of
11the treated well.

12(B) The regional water quality control board may contract with
13an independent third party that adheres to board-specified standards
14and protocols to perform the water sampling and testing.

begin insert

15(C) A tenant notified pursuant to paragraph (5) shall receive
16information on the results of the water testing to the extent
17authorized by his or her lease and, where the tenant has lawful
18use of the ground or surface water identified in subparagraph (A),
19the tenant may independently contract for similar groundwater or
20surface water testing.

end insert

21(7) If warranted, the regional water quality control board shall
22have the authority to retain an appropriately prepared and stored
23baseline sample or samples collected pursuant to paragraph (6) for
24as long as the planned analytical method or methods would provide
25valid results.

26(8) The division shall retain a list of the entities and property
27owners notified pursuant to paragraphs (4) and (5).

28(9) The operator shall provide notice to the division at least 72
29hours prior to the actual start of the well stimulation treatment in
30order for the division to witness the treatment.

31(e) The Secretary of the Natural Resources Agency shall notify
32the Joint Legislative Budget Committee and the chairs of the
33Assembly Natural Resources, Senate Environmental Quality, and
34Senate Natural Resources and Water Committees on the progress
35of the independent scientific study on well stimulation and related
36activities. The first progress report shall be provided to the
37Legislature on or before April 1, 2014, and progress reports shall
38continue every four months thereafter until the independent study
39is completed, including a peer review of the study by independent
40scientific experts.

P13   1(f) If a well stimulation treatment is performed on a well, a
2supplier that performs any part of the stimulation or provides
3additives directly to the operator for a well stimulation treatment
4shall furnish the operator with information needed for the operator
5to comply with subdivision (g). If a supplier claims trade secret
6protection pursuant to subdivision (j), the supplier shall notify the
7operator and provide to the operator substitute information, as
8described in subdivision (j), suitable for public disclosure. This
9information shall be provided as soon as possible but no later than
1030 days following the conclusion of the well stimulation treatment.

11(g) (1) Within 60 days following cessation of a well stimulation
12treatment on a well, the operator shall post or cause to have posted
13to an Internet Web site designated or maintained by the division
14and accessible to the public, all of the well stimulation fluid
15composition and disposition information required to be collected
16pursuant to rules and regulations adopted under subdivision (b),
17including well identification number and location. This shall
18include the collected water quality data, which the operator shall
19report electronically to the State Water Resources Control Board.

20(2) The division’s Internet Web site shall be operational on or
21before January 1, 2016, and the division may direct reporting to
22an alternative Internet Web site developed by the Ground Water
23Protection Council and the Interstate Oil and Gas Compact
24Commission in the interim. The reported information shall be
25organized on the division’s Internet Web site in a format, such as
26a spreadsheet, that allows the public to easily search and aggregate,
27to the extent practicable, each type of information required to be
28collected pursuant to subdivision (b) using search functions on
29that Internet Web site.

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

31(i) (1) All geologic features within a distance reflecting an
32appropriate safety factor of the fracture zone for well stimulation
33treatments that fracture the formation and that have the potential
34to either limit or facilitate the migration of fluids outside of the
35fracture zone shall be identified and added to the well history.
36Geologic features include, but are not limited to, seismic faults.

37(2) For the purposes of this section, the “fracture zone” is
38defined as the volume surrounding the well bore where fractures
39were created or enhanced by the well stimulation treatment. The
P14   1safety factor shall be at least five and may vary depending upon
2geologic knowledge.

3(j) (1) The supplier may claim trade secret protection for the
4chemical composition of additives, whose use is not otherwise
5prohibited by law, pursuant to Section 1060 of the Evidence Code,
6or the Uniform Trade Secrets Act (Title 5 (commencing with
7Section 3426) of Part 1 of Division 4 of the Civil Code).

8(2) If a supplier believes that information regarding a chemical
9constituent of a well stimulation fluid is a trade secret, the supplier
10shall nevertheless disclose the information to the division in
11conjunction with a well stimulation treatment permit application,
12if not previously disclosed, within 30 days following cessation of
13well stimulation on a well, and shall notify the division in writing
14of that belief.

15(3) In order to substantiate the trade secret claim to the division,
16the supplier shall provide the following information to the division:

17(A) The extent to which the information is known outside the
18business of the supplier submitting the information, and whether
19or not all individuals with that knowledge are bound by
20nondisclosure agreements.

21(B) The extent to which the information is known by the
22supplier’s employees and others involved in the supplier’s business,
23and whether or not all those individuals are bound by nondisclosure
24agreements.

25(C) The extent of measures taken by the supplier to restrict
26access to and guard the secrecy of the information, and whether
27or not the supplier plans to continue utilizing those measures.

28(D) The estimated value of the information to the supplier and
29its competitors.

30(E) The estimated amount of effort and money expended by the
31supplier in developing the information, and a description of the
32nature and extent of harm that would be caused if the information
33were made public.

34(F) The estimated ease or difficulty with which the information
35could be properly acquired or duplicated by others, and an
36explanation of why the chemical identity is not readily discoverable
37through reverse engineering.

38(G) Copies of, or references to, any pertinent trade secret or
39other confidentiality determinations previously made by the
P15   1division or other public agencies, including court orders or
2decisions.

3(4) If the division determines that the information provided in
4support of a request for trade secret protection pursuant to
5paragraph (3) is incomplete, the division shall notify the supplier
6and the supplier shall have 30 days to complete the submission.
7An incomplete submission does not meet the substantive criteria
8for trade secret designation.

9(5) If the division determines that the information provided in
10support of a request for trade secret protection does not meet the
11substantive criteria for trade secret designation, the department
12shall notify the supplier by certified mail of its determination. The
13division shall release the information to the public, but not earlier
14than 60 days after the date of mailing the determination, unless,
15prior to the expiration of the 60-day period, the supplier obtains
16an action in an appropriate court for a declaratory judgment that
17the information is subject to protection or for a preliminary
18injunction prohibiting disclosure of the information to the public
19and provides notice to the division of the court order. If no order
20or declaratory judgment is obtained, the division shall release the
21information to the public by revising the information provided
22pursuant to subdivision (g).

23(6) The supplier is not required to disclose trade secret
24information to the operator.

25(7) This subdivision does not permit a supplier to refuse to
26disclose the information required pursuant to this section to the
27division.

28(8) To comply with the public disclosure requirements of this
29section, the supplier shall indicate where trade secret information
30has been withheld and provide substitute information for public
31disclosure. The substitute information shall be a list, in any order,
32of the chemical constituents of the additive, including CAS
33identification numbers, whose specific composition is a trade
34secret. Information on the relative amounts or concentration of the
35constituents of additives whose specific composition is a trade
36secret shall not be publicly disclosed. The division shall review
37and approve the supplied substitute information.

38(9) Except as provided in subparagraph (B) of paragraph (11),
39the division shall protect from disclosure any trade secret claimed
40by the supplier, if that trade secret is not a public record.

P16   1(10) The supplier shall notify the division in writing within 30
2days of any changes to information provided to the division to
3support a trade secret claim, including if the information is no
4longer a trade secret.

5(11) Upon receipt of a request for the release of information to
6the public, which includes information the supplier has notified
7the division is a trade secret and is not a public record, the
8following procedure applies:

9(A) The division shall notify the supplier of the request in
10writing by certified mail, return receipt requested.

11(B) The division shall release the information to the public, but
12not earlier than 60 days after the date of mailing the notice of the
13request for information, unless, prior to the expiration of the 60-day
14period, the supplier obtains an action in an appropriate court for a
15declaratory judgment that the information is subject to protection
16or for a preliminary injunction prohibiting disclosure of the
17information to the public and provides notice to the division of
18that action.

19(12) (A) Except as provided in subparagraph (B) of paragraph
20 (11), trade secret information is not a public record and shall not
21be disclosed to anyone except to an officer or employee of the
22division, the state, local governments, including, but not limited
23to, local air districts, or the United States, in connection with the
24official duties of that officer or employee, to a health professional
25if the requirements of subparagraph (B) are met, under any law
26for the protection of health, or to contractors with the division or
27other government entities and their employees if, in the opinion
28of the division, disclosure is necessary and required for the
29satisfactory performance of a contract, for performance of work,
30or to protect health and safety.

31(B) In order to receive trade secret information, a health
32professional shall have a reasonable basis to suspect all of the
33following:

34(i) The information is needed for purposes of diagnosis or
35treatment of a patient.

36(ii) The patient being diagnosed or treated has been exposed to
37one or more chemicals subject to trade secret nondisclosure.

38(iii) Knowledge of the specific chemical identity of the chemical
39or chemicals will assist in diagnosis or treatment of the patient.

P17   1(C) A health professional may share trade secret information
2with other persons as may be professionally necessary, in order to
3diagnose or treat a patient, including, but not limited to, the patient
4and other health professionals, subject to state and federal laws
5restricting disclosure of medical records including, but not limited
6to, Chapter 2 (commencing with Section 56.10) of Part 2.6 of
7Division 1 of the Civil Code.

8(D) The division shall develop a procedure for the timely
9disclosure of trade secret information in the event of an emergency
10or to diagnose or treat a patient pursuant to this subdivision.

11(E) Confidentiality of trade secret information from public
12disclosure shall be maintained by those who receive trade secret
13information pursuant to the provisions of this subdivision, subject
14to the enforcement provisions of this division, and any additional
15 applicable state and federal law.

16(F) For purposes of this paragraph, “health professional” means
17any person licensed or certified pursuant to Division 2
18(commencing with Section 500) of the Business and Professions
19Code, the Osteopathic Initiative Act, the Chiropractic Initiative
20Act, or the Emergency Medical Services System and the
21Prehospital Emergency Medical Care Personnel Act (Division 2.5
22(commencing with Section 1797) of the Health and Safety Code).

23(13) (A) The supplierbegin delete mayend deletebegin insert shallend insert provide trade secret information
24in order to protect public health to any health professional,
25toxicologist, or epidemiologist who is employed in the field of
26public health and who provides a written statement of need and
27confidentiality agreement. The written statement of need shall
28include the public health purposes and shall explain the reason the
29disclosure of the specific chemical and its concentration is required
30in lieu of information describing the properties and effects of the
31chemical.

32(B) Confidentiality of trade secret information from public
33disclosure shall be maintained by those who receive trade secret
34information pursuant to the provisions of this paragraph subject
35to the enforcement provisions of this division and any additional
36applicable state and federal law.

37(k) This section does not apply to routine pressure tests to
38monitor the integrity of wells and well casings.

39(l) A well granted confidential status pursuant to Section 3234
40shall comply with this section, with the exception of the disclosure
P18   1of well stimulation fluids pursuant to subdivision (g) which shall
2not be required until the confidential status of the well ceases.

3(m) The division shall perform random periodic spot check
4inspections to ensure that the information provided on well
5stimulation treatments is accurately reported, including that the
6estimates provided prior to the commencement of the well
7stimulation treatment are reasonably consistent with the well
8history.

9(n) Where the division shares jurisdiction over a well or the
10 well stimulation treatment on a well with a federal entity, the
11division’s rules and regulations shallbegin delete govern the well stimulation
12treatment of the well.end delete
begin insert apply in addition to all applicable federal
13law and regulations.end insert

begin insert

14(o) This article does not relieve the division or any other agency
15from complying with any other provision of existing law.

end insert
16

SEC. 3.  

Section 3213 of the Public Resources Code is amended
17to read:

18

3213.  

The history shall show the location and amount of
19sidetracked casings, tools, or other material, the depth and quantity
20of cement in cement plugs, the shots of dynamite or other
21explosives, and the results of production and other tests during
22drilling operations. All data on well stimulation treatments pursuant
23to Section 3160 shall be recorded in the history.

24

SEC. 4.  

Section 3215 of the Public Resources Code is amended
25to read:

26

3215.  

(a) Within 60 days after the date of cessation of drilling,
27rework, well stimulation treatment, or abandonment operations,
28or the date of suspension of operations, the operator shall file with
29the district deputy, in a form approved by the supervisor, true
30copies of the log, core record, and history of work performed, and,
31if made, true and reproducible copies of all electrical, physical, or
32chemical logs, tests, or surveys. Upon a showing of hardship, the
33supervisor may extend the time within which to comply with this
34section for a period not to exceed 60 additional days.

35(b) The supervisor shall include information or electronic links
36to information provided pursuant to subdivision (g) of Section
373160 on existing publicly accessible maps on the division’s Internet
38Web site, and make the information available such that well
39stimulation treatment and related information are associated with
40each specific well. If data is reported on an Internet Web site not
P19   1maintained by the division pursuant to paragraph (2) of subdivision
2(g) of Section 3160, the division shall provide electronic links to
3that Internet Web site. The public shall be able to search and sort
4the hydraulic well stimulation and related information by at least
5the following criteria:

6(1) Geographic area.

7(2) Additive.

8(3) Chemical constituent.

9(4) Chemical Abstract Service number.

10(5) Time period.

11(6) Operator.

12(c) Notwithstanding Section 10231.5 of the Government Code,
13on or before January 1, 2016, and annually thereafter, the
14supervisor shall, in compliance with Section 9795 of the
15Government Code, prepare and transmit to the Legislature a
16comprehensive report on well stimulation treatments in the
17exploration and production of oil and gas resources in California.
18The report shall include aggregated data of all of the information
19required to be reported pursuant to Section 3160 reported by the
20district, county, and operator. The report also shall include relevant
21additional information, as necessary, including, but not limited to,
22all the following:

23(1) Aggregated data detailing the disposition of any produced
24water from wells that have undergone well stimulation treatments.

25(2) Aggregated data describing the formations where wells have
26received well stimulation treatments including the range of safety
27factors used and fracture zone lengths.

28(3) The number of emergency responses to a spill or release
29associated with a well stimulation treatment.

30(4) Aggregated data detailing the number of times trade secret
31information was not provided to the public, by county and by each
32company, in the preceding year.

33(5) Data detailing the loss of well and well casing integrity in
34the preceding year for wells that have undergone well stimulation
35treatment. For comparative purposes, data detailing the loss of
36well and well casing integrity in the preceding year for all wells
37shall also be provided. The cause of each well and well casing
38failure, if known, shall also be provided.

39(6) The number of spot check inspections conducted pursuant
40to subdivision (m) of Section 3160, including the number of
P20   1inspections where the composition of well stimulation fluids were
2verified and the results of those inspections.

3(7) The number of well stimulation treatments witnessed by the
4division.

5(8) The number of enforcement actions associated with well
6stimulation treatments, including, but not limited to, notices of
7deficiency, notices of violation, civil or criminal enforcement
8actions, and any penalties assessed.

9(d) The report shall be made publicly available and an electronic
10version shall be available on the division’s Internet Web site.

11

SEC. 5.  

Section 3236.5 of the Public Resources Code is
12amended to read:

13

3236.5.  

(a) A person who violates this chapter or a regulation
14implementing this chapter is subject to a civil penalty not to exceed
15twenty-five thousand dollars ($25,000) for each violation. A person
16who commits a violation of Article 3 (commencing with Section
173150) is subject to a civil penalty of not less than ten thousand
18dollars ($10,000) and not to exceed twenty-five thousand dollars
19($25,000) per day per violation. An act of God and an act of
20vandalism beyond the reasonable control of the operator shall not
21be considered a violation. The civil penalty shall be imposed by
22an order of the supervisor pursuant to Section 3225 upon a
23determination that a violation has been committed by the person
24charged. The imposition of a civil penalty under this section shall
25be in addition to any other penalty provided by law for the
26violation. When establishing the amount of the civil penalty
27pursuant to this section, the supervisor shall consider, in addition
28to other relevant circumstances, all of the following:

29(1) The extent of harm caused by the violation.

30(2) The persistence of the violation.

31(3) The pervasiveness of the violation.

32(4) The number of prior violations by the same violator.

33(b) An order of the supervisor imposing a civil penalty shall be
34reviewable pursuant to Article 6 (commencing with Section 3350).
35When the order of the supervisor has become final and the penalty
36has not been paid, the supervisor may apply to the appropriate
37superior court for an order directing payment of the civil penalty.
38The supervisor may also seek from the court an order directing
39that production from the well or use of the production facility that
40is the subject of the civil penalty order be discontinued until the
P21   1violation has been remedied to the satisfaction of the supervisor
2and the civil penalty has been paid.

3(c) Any amount collected under this section shall be deposited
4in the Oil, Gas, and Geothermal Administrative Fund.

5

SEC. 6.  

Section 3401 of the Public Resources Code is amended
6to read:

7

3401.  

(a) The proceeds of charges levied, assessed, and
8collected pursuant to this article upon the properties of every person
9operating or owning an interest in the production of a well shall
10be used exclusively for the support and maintenance of the
11department charged with the supervision of oil and gas operations.

12(b) Notwithstanding subdivision (a), the proceeds of charges
13levied, assessed, and collected pursuant to this article upon the
14properties of every person operating or owning an interest in the
15production of a well undergoing a well stimulation treatment, may
16be used by public entities, subject to appropriation by the
17Legislature, for all costs associated with well stimulation treatments
18including scientific studies required to evaluate the treatment,
19inspections, and any air and water quality sampling, monitoring,
20and testing performed by public entities.

21

SEC. 7.  

No reimbursement is required by this act pursuant to
22Section 6 of Article XIII B of the California Constitution because
23the only costs that may be incurred by a local agency or school
24district will be incurred because this act creates a new crime or
25infraction, eliminates a crime or infraction, or changes the penalty
26for a crime or infraction, within the meaning of Section 17556 of
27the Government Code, or changes the definition of a crime within
28the meaning of Section 6 of Article XIII B of the California
29Constitution.



O

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