BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
                             Senator Fran Pavley, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 1420         Hearing Date:    June 23,  
          2015
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          |Author:    |Salas                  |           |                 |
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          |Version:   |April 21, 2015    Amended                            |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Katharine Moore                                      |
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                          Subject:  Oil and gas: pipelines.

          BACKGROUND AND EXISTING LAW
          According to news reports:
          Ï   On March 11, 2014 the Southern California Gas Company was  
            looking for leaks in its own natural gas pipeline in Arvin  
            when it detected gas.
          Ï   On March 12, Southern California Gas determined that the gas  
            was not from its pipeline and notified the City of Arvin. 
          Ï   It took 5 more days to determine that the gas was coming  
            from a leak in a 3-inch diameter pipeline owned by Petro  
            Capital Resources, LLC. The location of the pipeline was  
            misidentified in available resources, and the pipeline was  
            used to carry waste gas to a nearby flare a few blocks from  
            Arvin High School. 
          Ï   On March 17, it was determined that the gas had saturated  
            the soil and contaminated eight homes.  Mandatory evacuations  
            were ordered the next day and approximately three dozen people  
            were displaced.  Explosive levels of flammable gases were  
            measured inside the homes. 
          Ï   The evacuated families and neighbors are reported to have  
            expressed considerable concern about the lack of information  
            about the leak, the responsibilities of local and state  
            government to address it, potential health problems and delays  
            in notification. 
          Ï   The mandatory evacuation was lifted in October 2014, and the  
            evacuees moved back in December 2014.  Petro Capital  
            Resources, LLC paid for the residents to stay elsewhere during  
            spill remediation and paid for the remediation services. 







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          Ï   The leaky pipeline was reported to be on the order of 40  
            years old, and after the leak was removed from service.   
            According to the Assembly Natural Resources Committee  
            analysis, this pipeline was last inspected on August 8, 2011.  
            There are reported to be thousands of feet of similarly aging  
            pipelines in Kern County whose location may, in some  
            instances, be uncertain and that may also be inspected  
            infrequently. 

          California is the third largest oil producer in the nation and  
          among the top 20 for the production of natural gas.  Kern County  
          produces approximately 70% of the state's oil and gas annually.  
          (Statements based on 2013 data.)

          The Division of Oil, Gas, and Geothermal Resources (division) in  
          the Department of Conservation is the state's oil and gas  
          regulator. The Oil and Gas Supervisor (supervisor) leads the  
          division.

          Existing law provides broad authority to the supervisor.  
          Existing law requires the supervisor to supervise the operation,  
          maintenance, and removal or abandonment of tanks and facilities  
          (including pipelines) related to oil and gas production within  
          an oil and gas field, so as to prevent damage to life, health,  
          property, and natural resources, as specified, among other  
          requirements (Public Resources Code (PRC) §3106). 

          Existing law requires the division to prescribe minimum facility  
          maintenance standards for oil and gas production facilities,  
          including pipelines that are not under the jurisdiction of the  
          State Fire Marshal (PRC §3270).  These standards include  
          standards for leak detection.  Pipelines that are located within  
          the lease areas of oil and gas fields, and are integrally  
          associated with oil and gas production, are generally "attendant  
          to" oil and gas production and therefore under the divisions  
          jurisdiction.

          Implementing these and other provisions of law, existing  
          regulations:
          Ï   require a spill contingency plan for an oil/gas production  
            facility, as specified (Title 14 (14), California Code of  
            Regulations (CCR), §1722(b));
          Ï   require significant gas or water leaks, among other  
            emergencies, as specified, to be reported to the appropriate  








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            division district office (14 CCR 1722(i)); 
          Ï   define an environmentally sensitive area to include:
             -    a production facility within 300 feet of any public  
               recreational area, or a building intended for human  
               occupancy that is not necessary to the operation of the  
               production operation, such as residences, schools,  
               hospitals, and businesses;
             -    a production facility within 200 feet of any officially  
               recognized wildlife preserve or environmentally sensitive  
               habitat (as defined), or waterways or other bodies of water  
               (as defined);
             -    a production facility within the coastal zone, as  
               specified; and
             -    any production facility which the supervisor determines  
               may present a significant potential threat, as specified,  
               or has a history of chronic leaks (14 CCR §1760(e)); and
          Ï   require pipeline inspection and testing as well as the  
            existence of pipeline management plans.  Of relevant interest:
             -    the supervisor has the authority to order any tests or  
               inspections of pipelines necessary; 
             -    a pipeline with a reportable leak must be tested prior  
               to re-entering service;
             -    a mechanical integrity test is required on all active  
               environmentally sensitive pipelines that are gathering  
               lines and all urban pipelines, as defined, over 4 inches in  
               diameter every two years, as specified;
             -    a mechanical integrity test is defined to include  
               various forms of testing to ensure the integrity of the  
               pipeline; 
             -    pipelines that fail testing must be removed from service  
               and the supervisor promptly notified; 
             -    copies of test results are required to be retained by  
               the operator, as specified; and 
             -    the pipeline management plan shall include information  
               about each pipeline and a description of the testing method  
               and schedule for all pipelines, (14 CCR §1774.1, §1774.2).   
                

          Existing law establishes local health department, under the  
          purview of the local health officer.  Existing law prescribes  
          various duties for those local health departments, including  
          supervising remediation when hazardous waste is released and  
          enforcing statues relating to public health.









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          PROPOSED LAW
          This bill would respond to the recent pipeline leak in Arvin by  
          instituting several statutory changes.  Specifically this bill  
          would:

          Ï   require the local health officer, in the event that the  
            officer determines that a pipeline leak poses a risk to public  
            health and safety and the response to the leak has been  
            inadequate to work collaboratively with the division and the  
            owner or operator of the pipeline, to (1) direct the  
            responsible party to perform environmental testing in the  
            contaminated area and disclose the results publicly, as  
            specified, and (2) use the test results to determine if a  
            serious threat to public health and safety of the residents  
            exists, and, if so, provide assistance to those residents;
          Ï   in the event the health officer determines that the pipeline  
            leak poses a serious threat to public health and safety,  
            notify all residents affected by the leak;
          Ï   require the division to prioritize the identification and  
            testing of all pipelines under its jurisdiction that are near  
            sensitive area, such as residential areas and schools; and
          Ï   require the operator of a pipeline under the divisions  
            jurisdiction to notify the division and local health officer  
            of a pipeline leak.

          ARGUMENTS IN SUPPORT
          According to the author, "[a]s the [oil] industry continues to  
          be a fixture in California, the safety of workers, communities  
          and the environment should remain a top priority. Despite  
          precautions taken, incidents occur in which immediate action is  
          needed to protect the health, safety, and environment of nearby  
          communities."

          "In early 2014, a gas leak was detected beneath the community of  
          Arvin, California. A total of 8 families were evacuated from  
          their homes and unable to return for several months. Affected  
          residents claimed to have smelled gas, and complained of  
          nosebleeds, headaches, coughing and dizziness.  Once the leak  
          was detected, affected residents were unclear where to get  
          resources and information.  This incident demonstrated a lack of  
          clarity in the law regarding the role of all involved entities."

          "Assembly Bill 1420 would require operators of a leak[ing]  








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          pipeline to notify local health officials.  If it is determined  
          that the leak poses a risk to public health and safety then the  
          local health official will be required to work collaboratively  
          with [the division] and the owner and/or operator the pipeline.  
          [?] The bill will also require [the division] to prioritize the  
          identification and testing of pipelines in their jurisdiction  
          that are near sensitive areas, such as residential neighborhoods  
          and schools."

          The Center on Race, Poverty & the Environment wrote, "[t]hough  
          residents took their own air samples, the results of the  
          "official" air testing were never disclosed to residents.  The  
          evacuated residents are now back home, but the leak and the  
          subsequent eight-month forced relocation has taken a heavy  
          financial, emotional, and health toll on the families."

          The Center continues, "AB 1420 will provide local agencies with  
          the authority they need to quickly respond to leaks in order to  
          protect residents' health, ensures that residents are informed  
          about the risks they face if a leak occurs nearby, and provides  
          for reimbursements to residents for costs associated with a  
          pipeline leak, including relocation costs."

          ARGUMENTS IN OPPOSITION
          None received

          COMMENTS
           This bill is double-referred with the Senate Environmental  
          Quality Committee  .  Should this bill pass this Committee today  
          it will subsequently be heard before the Senate Environmental  
          Quality Committee.  This Committee's jurisdiction over this bill  
          is limited to the role of the division.  The role of local  
          health officers, disclosure of environmental testing results,  
          processes and procedures in the event of a local health  
          emergency, and resident notification is under the Senate  
          Environmental Quality Committee's jurisdiction and will be  
          reviewed there.  Information related to those issues is included  
          here for completeness.  Stakeholder conversations regarding  
          these provisions continue, and include existing state law,  
          responsibilities and processes in the event of emergencies, and  
          the relevant jurisdiction of various entities.  
           
           Clarifying expectations of the division  .  The type of pipeline  
          responsible for the leak in Arvin is not required to be  








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          inspected on any regular specific schedule under current law or  
          regulation.  While this pipeline is located in an  
          environmentally sensitive area, as defined, it did not meet the  
          criteria specified in regulation for a specific inspection  
          interval.  While the intent of the current language is clear, it  
          is not necessarily clear what the specific expectations are of  
          the division to help prevent incidents such as the one in Arvin  
          last year from re-occurring.  In order to make pipeline  
          identification and inspection expectations explicit in statute  
          and definitively capture the pipeline responsible for the Arvin  
          leak in this bill, the Committee may wish to specify the type of  
          pipelines (active gas, of any size), deadline for pipeline  
          identification (2 years), inspection interval (2 years), type of  
          inspection (mechanical integrity testing), and invoke the  
          existing definition of environmentally sensitive areas  
          [Amendment 1].

           Technical change  . A technical change is required to provide  
          consistency with respect to those responsible for the pipeline  
          [Amendment 2].

           The division's responsibility for pipeline leaks and spills  .  As  
          noted above, the supervisor has broad authority pursuant to PRC  
          §3106, other PRC sections and their regulatory implementation to  
          order the preparation of spill contingency plans, pipeline  
          testing, require proof of pipeline integrity, and to shutdown  
          pipelines.  The division also has jurisdiction to specify, in  
          some instances, the amount of oil that may be spilled prior to  
          triggering reporting requirements (i.e. the San Joaquin Valley  
          Field Rules for oil spills.)  The division is not responsible  
          for clean-up of spills and leaks.
           
          Codifying specific notification to the division of a leak  .   
          Existing regulations, as described above, already require in  
          some instances notification to the division of a pipeline leak  
          or loss of integrity.  In the Arvin incident, the division  
          appears to have been notified and involved. This bill would  
          eliminate any ambiguity or potential ambiguity, however, that  
          reporting requirements to the division apply in the event of a  
          leak similar to the one that occurred in Arvin.












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          SUGGESTED AMENDMENTS 
          
          AMENDMENT 1
               on page 3, delete lines 22 - 25, inclusive, and replace  
               with:

               "The division shall require a mechanical integrity test  
               every two years for all active gas pipelines of any  
               diameter that are environmentally sensitive. The division  
               shall identify all active gas pipelines of any diameter  
               subject to this section by January 1, 2018. For the  
               purposes of this section, "environmentally sensitive" is as  
               defined in subdivision (e) of Section 1760 of Title 14 of  
               the California Code of Regulations and "mechanical  
               integrity test" is as defined in subdivision (e) of Section  
               1774.1 of Title 14 of the California Code of Regulations."

          AMENDMENT 2
               on page 3, line 34: insert "owner or" before "operator"
          
          SUPPORT
          City of Arvin
          Center on Race, Poverty & the Environment
          Jose Gurrola, Mayor Pro Tem, City of Arvin

          OPPOSITION
          None Received

          
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