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 ----------------------------------------------------------------- |Author: |Salas | | | ----------------------------------------------------------------- ----------------------------------------------------------------- |Version: |April 21, 2015 Amended | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Katharine Moore | | | | ----------------------------------------------------------------- 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. AB 1420 (Salas) Page 2 of ? 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 AB 1420 (Salas) Page 3 of ? 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. AB 1420 (Salas) Page 4 of ? 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] AB 1420 (Salas) Page 5 of ? 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 AB 1420 (Salas) Page 6 of ? 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. AB 1420 (Salas) Page 7 of ? 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 -- END --