BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1420 (Salas) - Oil and gas: pipelines.
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|Version: July 6, 2015 |Policy Vote: N.R. & W. 9 - 0, |
| | E.Q. 7 - 0 |
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|Urgency: No |Mandate: Yes (see staff |
| |comment) |
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|Hearing Date: August 24, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1420 would require a local health officer to take
specified actions when there is a leak in a gas pipeline and
would require mechanical integrity tests of gas pipelines in
sensitive areas every two years.
Fiscal
Impact:
First year costs of $3.4 million and ongoing costs of $2.9
million to the Oil, Gas, and Geothermal Administrative Fund
(special) for personnel and equipment necessary to identify
all pipelines in sensitive areas and to perform required
mechanical integrity tests as required. These costs are likely
to necessitate an increase in the fee that provides revenues
to the fund.
AB 1420 (Salas) Page 1 of
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Background: Existing law establishes the Division of Oil, Gas, and
Geothermal Resources (DOGGR) within the Department of
Conservation as the state's oil and gas regulator. The Oil and
Gas Supervisor is the lead of the division and has broad
authority 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 to
prevent damage to life, health, property, and natural resources.
(PRC §3106) The division is required 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), including
for leak detection.
Proposed Law:
This bill would require a local health officer to take the
following actions if it determines that there is a leak in a gas
pipeline within a sensitive area and the response by the owner
or operator of the pipeline has been inadequate:
Direct the responsible party to test the soil, air, and water
in the affected area for contamination
Determine whether the leak poses a serious threat to public
health and safety of the residents
Direct the responsibly party to notify all residents affected
by the leak if there is a serious threat to public health and
safety.
The responsible party would be liable for all costs incurred by
the local health officer.
This bill would require the owner or operator of a pipeline to
notify DOGGR and the local health officer of a leak discovered
from an active gas pipeline.
This bill would direct DOGGR to require a mechanical integrity
test of all active gas pipelines of any diameter within
sensitive areas every two years. By January 1, 2018, DOGGR would
be responsible for identifying all active gas pipelines subject
to this requirement.
AB 1420 (Salas) Page 2 of
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For the purposes of this bill, a "sensitive area" is an area
with buildings intended for human occupancy within 300 feet of
an active gas pipeline that are not necessary to the operation
of the pipeline; an area determined by the supervisor to present
significant threat to life, health, property, or natural
resources; or an area determined by the supervisor to have a
history of chronic leaks
Staff
Comments: This bill would require a significant new workload
for DOGGR to identify all pipelines in sensitive areas and to
oversee mechanical integrity tests of such pipelines every two
years. Specifically, DOGGR estimates needing 10 technicians to
verify the accuracy and completeness of operator-submitted
pipeline locations and three engineer positions to analyze
operational history of pipelines to help identify sensitive
areas. These positions would also be responsible for witnessing
pipeline testing activity. Additional positions would be needed
for compliance and enforcement, management of data, and provide
general support for the program. In total, DOGGR estimates that
it would need 22 staff at an ongoing cost of $2.85 million.
There would also be anticipated one-time costs of $570,000 for
equipment, including vehicles.
DOGGR notes that there are insufficient funds in the Oil, Gas,
and Geothermal Administration Fund to support these additional
activities. As such it anticipates needing to raise industry
fees by 1.75 cents per barrel.
Staff notes that there is an incorrect reference in Section 1 of
the bill. The reference in §101042(a) should be to §3270.5
instead of §3270.6.
There are two local mandates created by this bill- the first is
the creation of a crime. However, under the California
Constitution, costs associated with this mandate are not
reimbursable. The other mandate created in this bill is the
requirement for the local health officer to take specific
actions in the event of a gas leak. But as the bill specifies
AB 1420 (Salas) Page 3 of
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that the responsible party is liable for the costs incurred by
the local health officer, this mandate is not likely to be
reimbursable.
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