Amended in Assembly March 17, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 356

Introduced by Assembly Member Williams

(Coauthors: Assembly Members Nazarian and Mark Stone)

February 17, 2015

An act to amend begin delete Section 3106 end delete begin insert Sections 3106 and 3401 end insert of, and to add begin delete Section 3106.1 to, end delete begin insert Article 2.5 (commencing with Section 3130) to Chapter 1 of Division 3 of, end insert the Public begin delete Utilities end delete begin insert Resources end insert Code, and to add Section 13227.5 to the Water Code, relating to oil and gas.

LEGISLATIVE COUNSEL’S DIGEST

AB 356, as amended, Williams. Oil and gas: groundwater monitoring.

(1) Existing law requires the State Oil and Gas Supervisor to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production. Existing law authorizes the supervisor to require a well operator to implement a monitoring program, designed to detect releases to the soil and water, for aboveground oil production tanks and facilities. Under existing law, a person who fails to comply with specified requirements relating to the regulation of oil or gas operation is guilty of a misdemeanor.

This bill would additionally authorize the supervisor to require a well operator to implement a monitoring program for belowground oil production tanks and facilities, and disposal and injection begin delete wells,. end delete begin insert wells. end insert Because a failure to comply with this requirement would be a crime, this bill would impose a state-mandated local program.

(2) The federal Safe Drinking Water Act regulates certain wells as Class II begin delete injection end delete wells. Under existing federal law, the authority to regulate Class II begin delete injection end delete wells in California is delegated to the Division of Oil, Gas, and Geothermal Resources. Under existing regulations, a well operator is required to obtain approval from the supervisor or a district deputy for a subsurface injection or disposal project, including Class II begin delete injection end delete wells, or any change in a project, as provided.

This bill would begin insert require the division to annually review underground injection or disposal projects approved by the division that use Class II wells end insert begin insert . The bill would end insert require begin delete an end delete begin insert the end insert operator of begin delete a Class II injection well, end delete begin insert the project, end insert as a part of its application or begin delete notice of change end delete begin insert the annual review end insert process, to submit to begin delete an end delete begin insert the State Water Resources Control Board or end insert appropriate regional water quality control board begin insert for its review end insert a groundwater monitoring plan containing certain information, including, among other things, a schedule for monitoring and reporting groundwater quality begin delete data. end delete begin insert data, as provided. end insert The bill would require the data be submitted to the begin delete State Water Resources Control Board end delete begin insert state board end insert for inclusion in the state board’s geotracker database. Because a violation of this requirement would be a crime, this bill would impose a state-mandated local program. The bill would require the begin insert state board or end insert regional water quality control board to review and begin delete approve end delete begin insert authorize them to provide a written concurrence for end insert the plan.

begin insert

(3) Existing federal law prohibits certain well activities that affect underground sources of drinking water unless those sources are located in an exempt aquifer. Existing federal law authorizes a state delegated with the responsibility of regulating Class II wells to propose that an aquifer or a portion of an aquifer be an exempt aquifer and authorizes the United States Environmental Protection Agency to approve the proposal if the aquifer or a portion of the aquifer meets certain criteria.

end insert begin insert

This bill would require the division, prior to proposing to the United States Environmental Protection Agency an aquifer for exemption, to hold a public hearing on the proposal and to submit the proposal to the state board for review and written concurrence. The bill would authorize the state board to concur with the proposal if certain conditions are met.

end insert begin delete

(3)

end delete

begin insert (4) end insert  The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 3106 of the Public Resources Code is
amended to read:

3106.  

(a) The supervisor shall so supervise the drilling,
operation, maintenance, and abandonment of wells and the
operation, maintenance, and removal or abandonment of tanks and
facilities attendant to oil and gas production, including pipelines
not subject to regulation pursuant to Chapter 5.5 (commencing
with Section 51010) of Part 1 of Division 1 of Title 5 of the
Government Code that are within an oil and gas field, so as to
prevent, as far as possible, damage to life, health, property, and
natural resources; damage to underground oil and gas deposits
from infiltrating water and other causes; loss of oil, gas, or reservoir
energy; and damage to underground and surface waters suitable
for irrigation or domestic purposes by the infiltration of, or the
addition of, detrimental substances.

(b) The supervisor shall also supervise the drilling, operation,
maintenance, and abandonment of wells so as to permit the owners
or operators of the wells to utilize all methods and practices known
to the oil industry for the purpose of increasing the ultimate
recovery of underground hydrocarbons and which, in the opinion
of the supervisor, are suitable for this purpose in each proposed
case. To further the elimination of waste by increasing the recovery
of underground hydrocarbons, it is hereby declared as a policy of
this state that the grant in an oil and gas lease or contract to a lessee
or operator of the right or power, in substance, to explore for and
remove all hydrocarbons from any lands in the state, in the absence
of an express provision to the contrary contained in the lease or
contract, is deemed to allow the lessee or contractor, or the lessee’s
or contractor’s successors or assigns, to do what a prudent operator
using reasonable diligence would do, having in mind the best
interests of the lessor, lessee, and the state in producing and
removing hydrocarbons, including, but not limited to, the injection
of air, gas, water, or other fluids into the productive strata, the
application of pressure heat or other means for the reduction of
viscosity of the hydrocarbons, the supplying of additional motive
force, or the creating of enlarged or new channels for the
underground movement of hydrocarbons into production wells,
when these methods or processes employed have been approved
by the supervisor, except that nothing in this section imposes a
legal duty upon the lessee or contractor, or the lessee’s or
contractor’s successors or assigns, to conduct these operations.

(c) The supervisor may require an operator to implement a
monitoring program, designed to detect releases to the soil and
water, including both groundwater and surface water, for
aboveground and belowground oil production tanks and facilities,
and disposal and injection wells.

(d) To best meet begin insert the end insert oil and gas needs in this state, the supervisor
shall administer this division so as to encourage the wise
development of oil and gas resources.

begin delete

SEC. 2.  

Section 3106.1 is added to the Public Resources Code,
to read:

3106.1.  

(a) Notwithstanding subdivision (c) of Section 3106,
for a well that is a Class II injection well pursuant to the federal
Safe Drinking Water Act (42 U.S.C. Sec. 311f et seq.), an operator
submitting an application for approval pursuant to Section 1724.6
of Title 14 of the California Code of Regulations or a notice of
intent pursuant to Section 1724.10 of Title 14 of the California
Code of Regulations shall provide, as a part of the application or
notice, a groundwater monitoring plan for review and approval by
an appropriate regional water quality control board. The
groundwater monitoring plan shall include, at a minimum, all of
the following information:

(1) The current water quality of the groundwater basin through
which the well passes, that is sufficient to characterize the quality
of the aquifer.

(2) The current water quality of the injection zone sufficient to
demonstrate that the injection zone is not suitable to be used as a
source of drinking or irrigation water based on treatment
technologies existing at the time of application or notice.

(3) The identification of both public supply and domestic water
wells located within one mile of the boundaries of the injection
zone.

(4) A demonstration that the proposed injection well is located
in an area that is geologically suitable, including an appropriate
confining and injection zone.

(5) Chemical and physical analyses of, and data regarding,
identities and concentrations of all constituents present in the
injected fluid or gas. Subdivision (j) of Section 3160 shall apply
to a claim of trade secret for information described in this
paragraph.

(6) Sites for monitoring wells that will allow for the detection
of contamination or degradation associated with injection well
operations during and after the period of its active use.

(7) (A) A schedule for monitoring and reporting data that
provides groundwater quality data on a quarterly basis, at a
minimum, during the active life of a well and at least annually
after the well has been closed and abandoned.

(B) The data shall be submitted electronically to the State Water
Resources Control Board for inclusion in the state board’s
geotracker database.

(8) An emergency plan that will be implemented in the case of
a well failure or other event that has the potential to degrade
groundwater.

(b) This section does not apply to a well if the appropriate
regional water quality board has determined that the well meets
both of the following:

(1) The well does not inject into, or pass through, an aquifer
with a beneficial use.

(2) There are no public supply or domestic water wells located
within one mile of the injection zone.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Article 2.5 (commencing with Section 3130) is added
to Chapter 1 of Division 3 of the end insert begin insert Public Resources Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 2.5. end insert   Underground Injection Control

 

begin insert 3130. end insert   

For purposes of this article, the following terms mean
the following:

(a) “Class II well” means a well that injects brine and other
fluids associated with oil and gas production or a well that injects
hydrocarbons for the purposes of storage.

(b) “Exempt aquifer” means an aquifer that has been proposed
by the division and approved by the United States Environmental
Protection Agency for exemption from the UIC program and meets
the criteria for an aquifer exemption determination pursuant to
the federal Safe Drinking Water Act (42 U.S.C. Sec. 300f et seq.)
and regulations implementing that act.

(c) “Project” means an underground injection or disposal
project that uses a Class II well.

(d) “State board” means the State Water Resources Control
Board.

(e) “UIC program” means a program covering Class II wells
for which the division has received primacy from the United States
Environmental Protection Agency pursuant to Section 1425 of the
federal Safe Drinking Water Act (42 U.S.C. Sec. 300h-4).

begin insert 3131. end insert   

(a) Prior to proposing to the United States
Environmental Protection Agency an aquifer as an exempt aquifer,
the division shall do both of the following:

(1) Conduct a public hearing on the proposal.

(2) Submit the proposal to the state board for written
concurrence.

(b) The state board may concur on the proposal if all of the
following conditions are met:

(1) The division has included in the proposal all data necessary
to meet the aquifer exemption criteria set forth in Section 146.4
of Title 40 of the Code of Federal Regulations.

(2) The state board determines that the proposed aquifer cannot
now, or will not in the future, serve as a source of drinking water
or for other beneficial uses.

(3) The state board determines that injection into the proposed
aquifer will stay in the proposed area and will not impact the
ability of nearby nonexempt aquifers to be a source of drinking
water or for other beneficial uses.

begin insert 3132. end insert   

The division shall review annually all projects approved
pursuant to this chapter for compliance with applicable law.

begin insert 3133. end insert   

As a part of an application for approval of a project or
as a part of the annual review conducted pursuant to Section 3132,
the operator of the project shall submit to the state board or
appropriate regional water quality control board for review and
concurrence a groundwater monitoring plan meeting the
requirements of Section 3134.

begin insert 3134. end insert   

(a) The groundwater monitoring plan required pursuant
to Section 3133 shall include, at a minimum, all of the following:

(1) Information demonstrating that the aquifer into which the
injection occurs or the proposed injection will occur is an exempt
aquifer.

(2) Information regarding the current water quality of the
groundwater basin through which the well passes sufficient to
characterize the quality of the aquifer.

(3) Information regarding the current water quality of the
injection zone sufficient to demonstrate that the injection zone is
not suitable to be used as a source of drinking or irrigation water
based on treatment technologies existing at the time of submission
of the plan.

(4) The identification of both public supply and domestic water
wells located within one mile of the boundaries of the injection
zone or evidence showing that there are no public supply or
domestic water wells located within the one mile zone.

(5) A demonstration that the proposed injection well is located
in an area that is geologically suitable, including an appropriate
confining and injection zone.

(6) Chemical and physical analyses of, and data regarding,
identities and concentrations of all constituents present in the
injected fluid or gas. Subdivision (j) of Section 3160 shall apply
to a claim of trade secret for information described in this
paragraph.

(7) (A) Sites for monitoring wells that will allow for the
detection of contamination or degradation associated with
underground injection projects during and after the period of its
active use.

(B) Sites for monitoring wells that demonstrate that the injection
fluid is confined to the intended injection zone or zones of injection.

(8) (A) A schedule for monitoring and reporting data that
provides, at a minimum, groundwater quality data on a quarterly
basis during the active life of the well and at least annually after
the well has been closed and abandoned.

(B) The data shall be submitted electronically to the state board
for inclusion in the state board’s geotracker database.

(9) An emergency plan that will be implemented in the case of
a well failure or other event that has the potential to degrade
groundwater.

(b) Subparagraph (A) of paragraph (7) of subdivision (a) does
not apply to a well if the state board or appropriate regional water
quality board has determined that the well meets both of the
following:

(1) The well does not inject into, or pass through, an aquifer
with a beneficial use.

(2) There are no public supply or domestic water wells located
within one mile of the injection zone.

(c) (1) The state board or appropriate regional water quality
control board may revise the monitoring plan to avoid duplication
and assist with regional monitoring plans associated with oil and
gas activities.

(2) The state board or appropriate regional water quality board
may authorize the well operator to rely on a regional monitoring
plan in lieu of the requirements of paragraphs (7) and (8) of
subdivision (a).

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 3401 of the end insert begin insert Public Resources Code end insert begin insert is amended
to read: end insert

3401.  

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

(b) Notwithstanding subdivision (a), the proceeds of charges
levied, assessed, and collected pursuant to this article upon the
properties of every person operating or owning an interest in the
production of a well undergoing a well stimulation treatment, may
be used by public entities, subject to appropriation by the
Legislature, for all costs associated with both of the following:

(1) Well stimulation treatments, including rulemaking and
scientific studies required to evaluate the treatment, inspections,
any air and water quality sampling, monitoring, and testing
performed by public entities.

(2) The costs of the State Water Resources Control Board and
the regional water quality control boards in carrying out their
responsibilities pursuant to Section 3160 and Section 10783 of the
Water Code.

begin insert

(c) Notwithstanding subdivision (a), the proceeds of charges
levied, assessed, and collected pursuant to this article upon the
properties of every person operating or owning an interest in an
injection or disposal well subject to Article 2.5 (commencing with
Section 3130), may be used, subject to appropriation by the
Legislature, for all costs of the State Water Resources Control
Board or appropriate regional water quality control board in
carrying out their responsibilities pursuant to that article and
Section 13227.5 of the Water Code.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

Section 13227.5 is added to the Water Code, to read:

13227.5.  

begin delete A end delete begin insert The state board or appropriate end insert regional begin delete board,
with respect to its region, end delete begin insert board end insert shall review and begin delete approve end delete begin insert may
provide a written concurrence for end insert a groundwater monitoring plan
submitted pursuant to Section begin delete 3106.1 end delete begin insert 3133 end insert of the Public Resources
Code to ensure that groundwater quality is protected.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

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