BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 864 (Williams) - Oil spill response: environmentally and
ecologically sensitive areas
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|Version: August 17, 2015 |Policy Vote: N.R. & W. 8 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 864 would require pipelines to have the best
achievable technology to reduce the amount of oil released in an
oil spill to protect state waters and wildlife.
Fiscal
Impact:
Initial costs of $1.69 million followed by $1.37 million
annually ongoing to the California Hazardous Liquid Pipeline
Safety Fund (special) for the Office of the State Fire Marshal
(SFM) to develop and implement regulations on best achievable
technology.
Unknown ongoing costs, likely in the mid-hundreds of thousands
to the Oil Spill Prevention and Administration Fund (special)
for the Office of Oil Spill Prevention and Response to advise
operators on best achievable technology, evaluate contingency
plans, and develop required regulations.
Unknown costs to the California Hazardous Liquid Pipeline
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Safety Fund (special) and the Oil Spill Prevention and
Administration Fund (special) for the SFM and OSPR to
coordinate, potentially under a memorandum of understanding.
Background: Existing law establishes the Lempert-Keene-Seastrand Oil Spill
Prevention and Response Act, which created the Office of Spill
Prevention and Response (OSPR) within the Department of Fish and
Wildlife. OSPR's mission is to provide the best achievable
protection (GOV §8670.3) of California's natural resources and
the public health and safety by preventing, preparing for, and
responding to spills of oil and other deleterious materials; and
to restore and enhance affected resources. Best achievable
protection incorporates the use of best achievable technology.
Oil spill prevention and response to pipelines is under OSPR's
jurisdiction and existing law requires that pipeline operators
prepare oil spill contingency plans, as specified.
Environmentally sensitive areas are identified during the oil
spill contingency planning process.
Different agencies have authority over regulating pipelines
depending upon the size, service and location of pipelines in
the state. Pipelines internal to operations of onshore oil and
gas fields are under the jurisdiction of the Division of Oil,
Gas and Geothermal Resources within the Department of
Conservation. Pipelines used to transport oil outside of oil
and gas fields to, for example, refineries, in intrastate
service are under the jurisdiction of the SFM according to the
Elder California Pipeline Safety Act. The State Lands Commission
has jurisdiction over pipelines used for handling at marine oil
terminals, and would have a role in permitting pipelines on
state tidal and submerged lands.
Interstate pipelines that transport hazardous liquids are under
the jurisdiction of the Pipeline and Hazardous Materials Safety
Administration (PHMSA) within the US Department of
Transportation. Regulations for these pipelines are in Title 49
of the Code of Federal Regulations.
Proposed Law:
For interstate pipelines that are subject to Part 195 of Title
49 of the Federal Regulations that are near environmentally and
ecologically sensitive areas in the coastal zone, this bill
would require:
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The operator to use the best available technology, based on a
risk analysis conducted by the operator, in order to reduce
the amount of oil released in an oil spill, including leak
detection technology, automatic shutoff systems, and remotely
controlled block valves by July 1, 2018.
OSPR to develop guidelines by July 1, 2017 to assess the
adequacy of the operator's risk analysis. OSPR's
implementation of these requirements would be required to be
done in consultation with the SFM for technological expertise.
OSPR would be authorized to enter into a memorandum of
understanding to clarify roles and responsibilities.
The operator to describe how it is using the best achievable
technology, as determined by its risk analysis, to reduce the
amount of oil released in a spill in its oil spill contingency
plan.
For intrastate pipelines regulated by the SFM near
environmentally and sensitive ecologically sensitive areas in
the coastal zone, this bill would require:
Any new or replacement pipeline to use best available
technology, based on a risk analysis conducted by the
operator, to reduce the amount of oil released in an oil spill
to protect state waters and wildlife. Best available
technology would include installation of leak detection
technology, automatic shutoff systems, and remotely controlled
block valves.
An operator to submit a plan to retrofit existing pipelines
near environmentally and ecologically sensitive areas in the
coastal zone with best available technology by July 1, 2018.
The SFM would be required to develop regulations by July 1,
2017 and to consult with OSPR about the potential impacts to
state water and wildlife.
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An operator to notify the SFM of any new construction or
retrofit of these pipelines.
Staff
Comments: The SFM estimates that it would need approximately
$1.69 million for personnel and operating expenses and $1.37
million ongoing afterwards for seven PYs. In making this
estimate, the SFM notes that there are up 2,000 miles of
pipeline near environmentally and ecologically sensitive areas
in the coastal zone of California. While it is unknown how many
systems will have to be evaluated within these 2,000 miles at
this time, each segment will have very site specific conditions
that will impact what is considered best available technology
including the age of the pipe, elevation changes, and location.
OSPR will also have costs to implement the bill's requirements
in regards to interstate pipelines. Specifically, OSPR will have
costs associated with advising interstate pipeline operators on
best achievable technology, reviewing contingency plans, and
developing regulations to assess the adequacy of the operator's
risk analysis. Staff notes that OSPR's existing authority over
pipelines is through the requirement for operators to prepare an
oil spill contingency plan. As such, OSPR does not have staff
that has expertise on pipeline technologies. Thus, OSPR's costs
associated with this bill will depend on the technical expertise
that it receives from the SFM. Staff estimates that OSPR's costs
will likely be in the mid-hundreds of thousands of dollars for
three to five positions plus unknown costs for work that the SFM
may do on behalf of OSPR.
The bill requirements apply to interstate and intrastate
pipelines "near" environmentally and ecologically sensitive
areas. Staff recommends that "near" be defined to provide
clarity as to which pipelines are meant to be impacted by the
bill. Staff also recommends that the bill be amended to clarify
that the requirements on new and replacement intrastate
pipelines begin after the adoption of regulations by the SFM,
perhaps July 1, 2018, consistent with the requirement on
interstate pipelines.
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