Amended in Assembly May 5, 2015

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 Sections 3106 and 3401 of, and to add Article 2.5 (commencing with Section 3130) to Chapter 1 of Division 3 of, the Public Resources 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 wells. 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 wells. Under existing federal law, the authority to regulate Class II 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 wells, or any change in a project, as provided.

This bill would require the division to annually review underground injection or disposal projects approved by the division that use Class II wells. The bill would require the operator of the project, as a part of its application or the annual review process, to submit to the State Water Resources Control Board or appropriate regional water quality control board for its review a groundwater monitoring plan containing certain information, including, among other things, a schedule for monitoring and reporting groundwater quality data, as provided. The bill would require the data be submitted to the state board begin delete for inclusion end delete in begin insert an electronic format compatible with end insert 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 state board or regional water quality control board to review and authorize them to provide a written concurrence for the plan.

(3) Existing federal law prohibits certain well activities that affect underground sources of drinking water unless those sources are located in an begin delete exempt end delete begin insert exempted end insert 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 begin delete exempt end delete begin insert exempted end insert 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.

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.

(4) 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 the 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.

SEC. 2.  

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

 

Article 2.5.  Underground Injection Control

 

3130.  

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

begin insert

(a) “Beneficial use” has the same meaning as set forth in
subdivision (f) of Section 13050 of the Water Code.

end insert begin delete

(a)

end delete

begin insert (b) end insert  “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.

begin delete

(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.

end delete begin insert

(c) “Exempted aquifer” has the same meaning as set forth in
Section 144.3 of Title 40 of the Code of Federal Regulations.

end insert begin delete

(c)

end delete

begin insert (d) end insert  “Project” means an underground injection or disposal project
that uses a Class II well.

begin delete

(d)

end delete

begin insert (e) end insert  “State board” means the State Water Resources Control
Board.

begin insert

(f) “Underground source of drinking water” has the same
meaning as set forth in Section 144.3 of Title 40 of the Code of
Federal Regulations.

end insert begin delete

(e)

end delete

begin insert (g) end insert  “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).

3131.  

(a) Prior to proposing to the United States Environmental
Protection Agency an aquifer as an begin delete exempt end delete begin insert exempted end insert 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 begin delete Regulations. end delete begin insert Regulations and
necessary for the state board to make the determinations required
pursuant to paragraphs (2) and (3). end insert

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

(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 begin delete nonexempt end delete begin insert nonexempted end insert aquifers to be a source of
drinking water or for other beneficial begin delete uses. end delete begin insert use. end insert

3132.  

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

3133.  

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.

3134.  

(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 begin insert or area end insert into
which the injection occurs or the proposed injection will occur is
begin delete an exempt end delete begin insert one of the following: end insert

begin insert (A) end insert begin insert   end insert begin insert An exempted end insert aquifer.

begin insert

(B) An aquifer that is not an underground source of drinking
water.

end insert begin insert

(C) An area that does not contain an aquifer.

end insert

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

begin delete

(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)

end delete

begin insert (3) end insert  The identification of begin delete both public supply and domestic water
wells end delete begin insert all injection, production, water wells, including abandoned,
partially abandoned, or inactive wells, end insert 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.

begin delete

(5)

end delete

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

begin delete

(6)

end delete

begin insert (5) end insert  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.

begin delete

(7)

end delete

begin insert (6) end insert  (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.

begin delete

(8)

end delete

begin insert (7) end insert  (A) A schedule for monitoring and reporting data that
provides, at a minimum, groundwater quality data begin delete on a quarterly
basis end delete begin insert semiannually end insert during the active life of the well and at least
annually after the well has been closed and begin delete abandoned. end delete begin insert abandoned
until such time as justified by the operator and concurred with by
the state board. The operator shall provide the state board access
to its monitoring sites and well data for further testing and analysis. end insert

begin delete

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

end delete begin insert

(B) Groundwater quality data collected shall be submitted to
the state board in an electronic format that is compatible with the
state board’s geotracker database, following the guidelines detailed
in Chapter 30 (commencing with Section 3890) of Division 3 of
Title 23 of the California Code of Regulations.

end insert begin delete

(9) An emergency

end delete

begin insert (8) end insert begin insert   end insert begin insert A contingency end insert 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 begin delete meets both of the
following: end delete begin insert does not and could not inject into, or pass through, an
aquifer with a beneficial use. end insert

begin delete

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

end delete begin delete

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

end delete

(c) (1) The state board or appropriate regional water quality
control board may revise the monitoring plan to avoid duplication
and begin delete assist with regional monitoring plans associated with oil and
gas activities. end delete begin insert reduce the number of monitoring wells needed to
accomplish the purposes of the monitoring plan. end insert

(2) The state board or appropriate regional water quality board
may authorize the well operator to begin delete rely on a regional monitoring
plan in lieu of the requirements of paragraphs (7) and (8) of
subdivision (a). end delete begin insert submit one monitoring plan with adjacent
operators so that injection projects in an aquifer or portions of an
aquifer can be considered as a whole. end insert

SEC. 3.  

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

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.

(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.

SEC. 4.  

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

13227.5.  

The state board or appropriate regional board shall
review and may provide a written concurrence for a groundwater
monitoring plan submitted pursuant to Section 3133 of the Public
Resources Code to ensure that groundwater quality is protected.

SEC. 5.  

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.