BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1281|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: SB 1281
Author: Pavley (D)
Amended: 4/21/14
Vote: 21
SENATE NATURAL RESOURCES AND WATER COMMITTEE : 8-0, 4/29/14
AYES: Pavley, Cannella, Evans, Hueso, Jackson, Lara, Monning,
Wolk
NO VOTE RECORDED: Fuller
SENATE APPROPRIATIONS COMMITTEE : 6-0, 5/23/14
AYES: De León, Gaines, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters
SUBJECT : Oil and gas production: water use reporting
SOURCE : Author
DIGEST : This bill declares that it is the policy of the state
that oil and gas field activities should use recycled water to
the extent feasible and that the use and reuse of water
unsuitable for drinking or irrigation purposes is encouraged.
This bill expands requirements for monthly reports from an owner
of an oil and gas well to the Division of Oil, Gas, and
Geothermal Resources (DOGGR) to include information regarding
the use of water on the oil field.
ANALYSIS :
Existing law:
CONTINUED
SB 1281
Page
2
1.Regulates, under the DOGGR in the Department of Conservation,
the drilling, operation, maintenance, stimulation, and
abandonment of oil and gas wells in the state.
2.Requires the owner of any well to file with the DOGGR
Supervisor a monthly statement that provides certain
information relating to the well, including what disposition
was made of the water produced from each field.
3.Provides that a person who fails to comply with specific laws
relating to the regulation of oil or gas operations, including
failing to furnish a report or record, is guilty of a
misdemeanor.
This bill:
1.Declares that it is the state's policy that oil and gas field
operations should use, or treat and use, water produced
through oil field activities and recycled water, to the extent
feasible. The use of water unsuitable for drinking or
irrigation is encouraged.
2.Requires the following information to be included in the
monthly reports that well owners are required to submit to the
DOGGR:
A. The source of fluid or gas injected into each well,
including the source and amount of water used to generate
injected fluid or gas; and
B. The treatment of water and the use of treated or
recycled water in oil and gas field activities.
C. The specific disposition of all water used or generated
by oil and gas activities.
Background
SB 4 (Pavley, Chapter 313, Statutes of 2013) established a
regulatory program for oil and gas well stimulation treatments
(e.g. hydraulic fracturing, acid well stimulation) which
includes, among other things, a study, the development of
regulations, a permitting process, and public notification and
CONTINUED
SB 1281
Page
3
disclosure. Section 3160 of the Public Resources Code states
required content of the regulations, including full disclosure
of the composition and disposition of hydraulic fracturing
fluids and acid stimulation treatment fluids. At a minimum,
this disclosure includes the source, volume, and specific
composition and disposition of all water, including water that
is used as a base fluid and water that is recovered from the
well following the treatment.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
One-time costs of up to $1.3 and $2.9 million from the Oil,
Gas, and Geothermal Administrative Fund (special) over a
period of one to two years for the expansion of the oil and
gas well information reporting system for additional required
information.
Ongoing costs of $125,000 from the Oil, Gas, and Geothermal
Administrative Fund (special) for the management of the
expanded data.
SUPPORT : (Verified 5/20/14)
Citizens for Responsible Oil and Gas
Clean Water Action
Earthworks
Environmental Working Group
Los Padres Forest Watch
Mount Shasta Bioregional Ecology Center
Natural Resources Defense Council
South Monterey County Citizen Planning Alliance
Southern Monterey County Rural Coalition
ARGUMENTS IN SUPPORT : According to the author, "California is
suffering from one of the worst droughts since it became a
state. Last year, 2014, was the driest year in terms of
rainfall since 1850. Water scarcity is not unusual here, and is
a matter of considerable public concern.
"The amount of water used in oil and gas field exploration,
development and production is also of continuing and significant
CONTINUED
SB 1281
Page
4
public concern. Much of California's oil and gas production is
located in arid parts of the Central Valley and where existing
groundwater - particularly good quality groundwater - may be
depleted or under threat of depletion.
"Earlier this year, I asked the Senate Office of Research (SOR)
to find out how much water is used in oil and gas activities in
California. While some information is routinely provided to
regulators, SOR could only provide very rough estimates. The
current reporting requirements are inadequate. The data
reported don't add up.
"SB 1281 is designed to address the public's concerns in two
ways. First, it establishes state policy to promote the use and
treatment and use of produced water and recycled water for oil
and gas field operations. Second, it enhances existing water
reporting requirements. Implementation of SB 1281 will provide
public transparency and adequate recordkeeping on water use in
the oil and gas industry."
RM:e 5/23/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED