BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:            AB 1420
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          |Author:    |Salas                                                |
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          |Version:   |7/06/2015              |Hearing      |7/15/2015       |
          |           |                       |Date:        |                |
          |-----------+-----------------------+-------------+----------------|
          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Rachel Machi Wagoner                                 |
          |           |                                                     |
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          SUBJECT:  Oil and gas:  pipelines.

            ANALYSIS:
          
          Existing law:  
          
          1) Requires the Division of Oil, Gas, and Geothermal Resources  
             (DOGGR) 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. Under the division's regulations, an owner or  
             operator of an active environmentally sensitive gas pipeline  
             that is a gathering line is required to perform a mechanical  
             integrity test on the pipeline, unless it is less than 10  
             years old.


          2) Establishes local health departments, under the purview of  
             the local health officer and prescribes various duties for  
             those local health departments, including supervising  
             remediation when hazardous waste is released and enforcing  
             statutes relating to public health.


          This bill:  

          1) Requires a mechanical integrity test every 2 years for all  
             active gas pipelines of any diameter that are identified as  
             in sensitive areas and requires DOGGR, by January 1, 2018, to  
             identify all gas pipelines that are within sensitive areas.







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          2) Requires a local health officer or his or her designee, if he  
             or she is notified of an active leak in a pipeline that is  
             within a sensitive area and makes certain determinations, to  
             take certain actions related to the leak, working  
             collaboratively with DOGGR and the owner or operator of that  
             pipeline. 


          3) Requires the local public health officer or his or her  
             designee to direct the responsible party (RP) to notify  
             residents affected by the leak if he or she determines that  
             the leak poses a serious threat to public health and safety. 


          4) Requires owners or operators of pipelines under DOGGR's  
             jurisdiction, upon discovery of a leak from the pipeline, to  
             notify DOGGR and the appropriate local health officer or his  
             or her designee of the leak. 


          5) For purposes of this section, defines "sensitive area" as:


             a)    An area containing a building intended for human  
                occupancy, such as a residence, school, hospital, or  
                business that is located within 300 feet of an active gas  
                pipeline and that is not necessary to the operation of the  
                pipeline.


             b)    An area determined by the supervisor to present  
                significant potential threat to life, health, property, or  
                natural resources in the event of a leak from an active  
                gas pipeline.


             c)    An area determined by the supervisor to have an active  
                gas pipeline that has a history of chronic leaks.


          6) Specifies that the responsible party shall be liable for the  
             costs incurred by the local health officer or his or her  








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             designee pursuant to this section.
            
          Background
          
          1) The gas leak in Arvin:  According to articles in The  
             Bakersfield Californian, on March 11, 2014, Southern  
             California Gas Co. (SCG) was performing routine checks for  
             leaks on its natural gas pipelines in Arvin, California, when  
             its instruments detected a gas leak.  SCG workers realized  
             the next day that the leak wasn't from their own pipelines  
             and notified the city of Arvin, which in turn alerted DOGGR  
             both that it was working with SCG to determine the source of  
             the gas and that residents of Nelson Court in Arvin had been  
             reporting gas odors.  

             According to the Department of Conservation (DOC), under  
             which DOGGR operates, DOGGR staff immediately met with Petro  
             Capitol Resources (PCR), which operates the three oil and gas  
             leases about 200 feet east of the homes on Nelson Court, to  
             review existing lease maps of the operation.  They found that  
             the existing maps were faulty, and that the pipelines were  
             actually adjacent to the homes on Nelson Court that had been  
             reporting the odor.  PCR shut down its pipeline on March  
             13th, and affected residents were evacuated.  On the 17 and  
             18th the actual leak was detected in a 3" gas flare pipe, and  
             Kern County tested for flammable gases, finding high levels  
             of flammable gases outside the homes and levels at half of  
             the lower explosive levels were inside eight homes on Nelson  
             Court.  Further, Kern County and DOGGR found that the soil  
             was so saturated with natural gas that remediation required  
             application of a vapor extraction system.  The Bakersfield  
             Californian reported that some residents said they had  
             smelled the gas for as long as two years, and complained of  
             nosebleeds, headaches, coughing and dizziness.

             According to news articles, letters submitted to the  
             Governor, and communication with the author, before and after  
             the leak was detected, residents were confused about where to  
             seek resources and information and felt the response to the  
             leak was inadequate.  Additionally, even though PCR performed  
             initial toxicity testing of the houses on Nelson Court,  
             residents were distrustful of the results, and the County  
             performed another set of tests, for which it is still trying  
             to recoup costs.  Residents remained evacuated for over 7  








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             months and remain concerned about the safety of living in  
             their own homes.  

          2) DOGGR's jurisdiction over pipelines: DOGGR oversees the  
             drilling, operation, maintenance, and plugging and  
             abandonment of oil, natural gas, and geothermal wells.  DOGGR  
             has jurisdiction over tanks and facilities that are  
             "attendant to" oil and gas production, including pipelines  
             located within oil and gas fields and not subject to  
             regulation by the California Department of Forestry and Fire  
             Protection-Office of State Fire Marshal.  Tanks and 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 DOGGR's jurisdiction.  In the  
             Arvin case, according to the DOC, DOGGR is responsible for  
             the oversight of the pipes that leaked.

          3) DOGGR's process for identifying and inspecting pipelines:   
             DOGGR's regulations require pipeline operators to visually  
             inspect all above ground pipelines at least once per year and  
             authorize the Supervisor to order tests or inspections as  
             needed to establish the reliability of any pipeline system.   
             Additionally, regulations require a mechanical integrity test  
             to be performed on all active environmentally sensitive  
             pipelines that are used to transport crude oil or natural gas  
             from the production site to a central collection point, and  
             all urban pipelines over 4" in diameter, every two years.   
             Regulation exempts pipelines less than 10 years old from the  
             two-year testing requirement. 

             In Arvin, even though DOGGR is responsible for the oversight  
             of the pipeline that failed, the pipeline is not subject to  
             the periodic testing required of other, larger capacity (over  
             4" in diameter) lines, or lines that carry hydrocarbons.   
             DOGGR records showed that the pipeline was last inspected on  
             August 8, 2011.  This bill requires DOGGR to prioritize the  
             identification and testing of all pipelines under its  
             jurisdiction, regardless of size or what it carries, for  
             leaks that are near sensitive areas, such as residential  
             areas and schools.   


            








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          Comments
          
          Purpose of Bill.  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]  
          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."

          What is the Responsibility of the Responsible Party?  The bill  
          specifies that the local health officer shall work in  
          collaboration with DOGGR and RP to provide information and  
          assistance to affected residents and requires that the RP  
          reimburse the costs incurred by the local health officer,  
          including, but not limited to, relocation of residents.  It is  
          more appropriate that RP incur the cost to residents, including  
          relocation.  An amendment is needed to specify that the RP will  
          pay for relocation and other costs to residents.  

          Additionally, while nothing in this legislation relieves an RP  
          from civil/tort liability, an amendment should be taken to  
          clearly state that the RP shall not condition any assistance  
          provided pursuant to this bill to any waiver of the recipient of  
          the assistance.
          








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          DOUBLE REFERRAL:  

          This measure was heard in Senate Natural Resources and Water  
          Committee on June 23, 2015, and passed out of committee with a  
          vote of 9-0.  The provisions of the bill pertaining to DOGGR's  
          responsibilities and jurisdiction were heard by that committee.  
           
          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.  
           
          SOURCE:                    Author  

           SUPPORT:               

          Center on Race, Poverty & the Environment
          City of Arvin
          Sierra Club
           
           OPPOSITION:    

          None received  

           ARGUMENTS IN  
          SUPPORT:    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."

          
           
                                          
                                      -- END --
          








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