BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 395 (Jackson) - Hazardous waste: wells.
Amended: May 7, 2013 Policy Vote: EQ 6-3
Urgency: No Mandate: Yes
Hearing Date: May 23, 2013 Consultant: Marie Liu
SUSPENSE FILE.
Bill Summary: SB 395 would require wells regulated by the
Division of Oil, Gas and Geothermal Resources (DOGGR) to be
subject to the Toxic Well Injection Control Act (TWICA) and
authorizes the Department of Toxic Substances Control (DTSC) to
regulate fluids injected into Class II wells.
Fiscal Impact: Unknown costs from the Hazardous Waste Control
Account (special fund) for increased workload to DTSC to oversee
hazardous waste associated with oil and gas wells. This
increased workload would be offset by fees from the regulated
party.
Background: The Toxic Well Injection Control Act of 1985 (TWICA)
(HSC �25159.10 et seq.) prohibits a person from discharging
hazardous waste into an injection well unless certain conditions
are meet. Existing law exempts oil and gas wells that are
regulated by DOGGR from TWICA.
Existing law creates DOGGR within the Department of Conservation
and authorizes DOGGR to regulate activities associated with the
production and removal of hydrocarbons from the ground to
protect damage to life, health, property, natural resources, and
to underground surface water suitable for irrigation or domestic
purposes (PRC �3106). Under a Primacy Agreement with the US EPA,
DOGGR has oversight over Class II underground injection in
California. Class II wells are those that inject fluids brought
to the surface in connection with conventional oil or natural
gas production, known as produced water; are used for enhanced
recovery of oil or natural gas; or used for storage of
hydrocarbons.
Proposed Law: This bill would delete the exemption that oil and
gas wells have under TWICA, thereby requiring DTSC to regulate
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the fluids injected into those wells, and prohibiting the
injection of hazardous waste into Class II wells.
Staff Comments: In 2002, under the Oil Exploration and
Production (E&P) Wastes Initiative, DTSC conducted a field
research project to characterize E&P wastes. Eighty-two samples
of produced water, drilling waste, oil sludge, and foam
treatment waste were analyzed. DTSC found that, "Overall, the
wastestreams sampled were not found to be hazardous based on the
data obtained and the statistical interpretation of that data;
however, isolated cases are discussed where the E&P wastes
displayed California hazardous waste characteristics." The study
results suggest that there would be a limited increase in
workload for DTSC under this bill because most E&P wastes are
likely not to be hazardous. However, staff notes that oil and
drilling practices, including well stimulation practices, may
have changed substantially over the past ten years and thus it
is unclear whether the study results are still valid.
Staff notes that there is a lack of clarity on how this bill is
to be implemented. Oil and gas wells can operate as a "closed
loop" where liquids that are pumped out of a well (i.e.
produced water) is injected back into the well, sometimes with
additional constituents, for various reasons, including
disposal, further well stimulation, or subsidence control.
Produced water is a combination of water that was injected and
formation water (water that originated from the oil and gas
formation). DTSC's regulations take force at the point produced
water becomes a waste. However, because produced water can be
cycled in and out of the formation, it is unclear at what point
the produced water would be defined as "waste" and therefore
subject to testing on whether it is hazardous. If the produced
water is a waste as soon as it is pumped up and the oil is
skimmed out, there would be millions gallons of produced water
subject to testing under this bill. However, if production water
is not a waste so long as it is still being used in the
extraction of oil and gas, arguably there is no waste until the
water is injected into an inactive area of the formation, far
less sampling will occur. According to DOGGR, slightly more than
75% of produced water is re-injected. It is not known what
portion of this reinjection is for "waste disposal" or further
enhanced oiled recovery.
The bill would only prohibit the injection of hazardous
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materials into injection wells only if those materials are
considered "waste." This bill would not change the use of
produced water that is not found to be hazardous.
Because of the uncertainty in both the volume of waste as well
as the likelihood that the waste is hazardous, there is a large
range of potential workload impacts to DTSC. The bill would
require the producer of the E&P wastes to conduct the necessary
testing. DTSC would be responsible for enforcing this testing
and to oversee the treatment of wastes that are deemed
hazardous. Staff notes that DTSC's regulatory fees are generally
structured in a manner so the cost of its regulatory activities
is covered by fees so regardless of the extent of the workload
increase, there should be minimal, if any, net costs to the
state as a result of this bill.