BILL ANALYSIS Ó
AB 1490
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 1490
(Rendon) - As Introduced February 27, 2015
SUBJECT: Oil and gas: well stimulation treatments: seismic
activities
SUMMARY: Prohibits well stimulation, and in some cases,
wastewater disposal in limited areas that are seismically active
or have recently had an earthquake.
EXISTING LAW:
1)Requires the Department of Conservation's Division of Oil,
Gas, and Geothermal Resources (DOGGR) to regulate oil and gas
wells, tanks, and facilities attendant to oil and gas
production.
2)Establishes, pursuant to SB 4 (Pavley, Chapter 313, Statutes
of 2013), a comprehensive, multi-agency regulatory program for
oil and gas well stimulation treatments (e.g., hydraulic
fracturing, acid matrix stimulation). Establishes DOGGR as
the lead agency for the multi-agency regulatory program.
3)Requires, on or before January 1, 2015, the Secretary of the
Natural Resources Agency to conduct and complete an
independent scientific study on well stimulation treatments,
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including, but not limited to, hydraulic fracturing and acid
well stimulation treatments.
4)Requires the scientific study to evaluate the hazards and
risks and potential hazards and risks that well stimulation
treatments pose to natural resources and public, occupational,
and environmental health and safety, including induced
seismicity.
5)Requires, on or before January 1, 2015, DOGGR, in consultation
with the Department of Toxic Substances Control, the State Air
Resources Board (ARB), the State Water Resources Control Board
(SWRCB), the Department of Resources Recycling and Recovery,
and any local air districts and regional water quality control
boards in areas where well stimulation treatments, including
acid well stimulation treatments and hydraulic fracturing
treatments, may occur, to adopt rules and regulations specific
to well stimulation treatments.
6)Pursuant to regulations adopted by DOGGR, prohibits a well
operator, after the occurrence of an earthquake of magnitude
2.7 or higher, from performing hydraulic fracturing on a well
within five times the axial dimensional stimulation area until
DOGGR completes certain evaluations and is satisfied that
hydraulic fracturing within that radius does not create a
heightened risk of seismic activity.
THIS BILL:
1)Prohibits a well operator from conducting a well stimulation
treatment following an occurrence of an earthquake of
magnitude 2.0 or higher, as determined by the United States
Geological Survey, on a well that is within a radius of an
unspecified distance from the epicenter of the earthquake, as
determined by the United States Geological Survey (USGS),
until DOGGR completes an evaluation on whether there is a
causal connection between the well stimulation treatment and
the earthquake and is satisfied that the well stimulation
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treatment does not create a heightened risk of seismic
activity.
2)Prohibits wastewater disposal wells and all well stimulation
treatments, including hydraulic fracturing, within 10 miles of
a recently active fault.
3)Defines "recently active fault" as a fault that has been
active in the past 200 years.
FISCAL EFFECT: Unknown
COMMENTS:
1)Author's statement.
The connection between earthquakes and fracking has
received significant attention in recent years. Recent
fracking (hydraulic fracturing) legislation and DOGGR
regulations have considered this issue. Scientific
research on their relationship in California is
underway. In other states with fracking, USGS has
concluded: 'The increase in seismicity has been found
to coincide with the injection of wastewater in deep
disposal wells in several locations, including
Colorado, Texas, Arkansas, Oklahoma, and Ohio. Much of
this wastewater is a byproduct of oil and gas
production and is routinely disposed of by injection
into wells specifically designed and approved for this
purpose.' California has a long history of earthquake
activity and the connection to fracking requires
further study. In the meantime, fracking near
earthquake faults should be on hold. As defined in
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this bill, fracking near active faults accounts for
about 54-60% of the oil and gas extraction activity in
California. (A Chevron representative cited the 60%
estimate on April 15.) In addition, if an earthquake
happens near fracking activity, such activity should
be shut down while the investigation into the
connection proceeds.
2)Scientific study. As stated above, USGS has found a connection
between oil and gas activity and increased seismicity in
Colorado, Texas, Arkansas, Oklahoma, and Ohio. On January 14,
2015, California Council on Science and Technology (CCST)
released Volume I of the Independent Scientific Study required
by SB 4 to the public. The key findings for Volume I were:
a) Fracking practices in California appear to be very
different from current practices used to produce
unconventional reservoirs in, for example, North Dakota,
and Texas.
b) California fracked wells tend to be shallower, vertical,
fracked in one location in the well only, and use much
smaller amounts of water on average.
c) Future expanded production in California is likely to be
predominantly in the San Joaquin basin where it is
concentrated now. It remains highly uncertain how much oil
is available to be produced directly from the Monterey
Shale.
d) Hydraulic fracturing, rather than acidizing, has been
used much more frequently both onshore and offshore.
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e) Available data indicate approximately 150 frack jobs
occur onshore and about one offshore per month.
f) Over the last decade, about 20% of California's oil
production has been from fracked wells.
Volume II, which will specifically address direct and indirect
seismic impacts, is expected to be released by July 1, 2015.
CCST did release a similar report commissioned by the Bureau
of Land Management. That study stated, "Produced water
disposal in dedicated injection wells (Class II wells
according to EPA's regulation for underground injection)
presents the possibility of triggering earthquakes." In
addition, it also stated:
There are no published reports of induced seismicity
caused by wastewater disposal related to oil and gas
operations in California, and at present the seismic
hazard posed by wastewater injection is likely to be
low. However, possible correlations between seismicity
and wastewater injection in California have not yet
been studied in detail. Injection of much larger
volumes of produced water from increased WST (well
stimulation treatment) activity and the subsequent
increase in oil and gas production could increase the
hazard, particularly in areas of high, naturally
occurring seismicity.
3)DOGGR Regulations. On December 30, 2014, the Office of
Administrative Law (OAL) approved and filed the final proposed
regulations on well stimulation treatments with the Office of
the Secretary of State. The regulations contain similar
language to AB 1490. However, DOGGR regulations prohibit well
stimulation when an earthquake occurs that is 2.7 or higher in
magnitude rather than the 2.0 in AB 1490. In addition, DOGGR
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regulations specify that no stimulation is to occur within
five times the axial dimensional stimulation area. In AB 1490
the distance is left blank, but the author has indicated he
would be interested in setting 10 miles as the distance. This
would be clearer than five times the axial dimensional
stimulation area. DOGGR is concerned about the ability to
detect a 2.0 earthquake accurately without extensive
earthquake sensing equipment. The author and committee may
wish to consider amending the bill to inset 10 miles as the
distance well stimulation is prohibited from occurring within
and adjusting the earthquake magnitude to 2.5 or higher, which
according to seismology website UPSeis, is the lowest level
that can be felt and cause damage.
4)Related legislation.
SB 454 (Allen) prohibits DOGGR from submitting a proposal for an
aquifer exemption to the U.S. Environmental Protection Agency
(U.S. EPA) unless DOGGR and SWRCB concur in writing that the
aquifer meets specified conditions. This bill is awaiting a
hearing in the Senate Natural Resources and Water Committee on
April 28.
SB 545 (Jackson, 2015) revises and updates DOGGR's authority and
permitting practices and reforms the handling of confidential
wells. This bill is awaiting a hearing in the Senate Natural
Resources and Water Committee on April 28.
SB 248 (Pavley) requires DOGGR to review and update its
regulations, data management practices, and enhance required
reporting. This bill is awaiting a hearing in the Senate
Appropriations Committee.
AB 1501 (Rendon) requires air districts to establish an emission
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standard for methane from well stimulation treatment and other
petroleum extraction facilities. This bill requires the emission
standard to include a permit requirement and consideration of
the effect production facilities have on adjacent vulnerable
populations. This bill requires ARB or a local air district to
install monitoring stations near any approved well stimulation
site and other petroleum extraction facilities to monitor for 12
different chemicals. This bill will also be heard by this
committee on April 27.
AB 356 (Williams) requires, prior to submitting a proposal to
exempt an aquifer to U.S. EPA, that DOGGR hold a public hearing
and gain concurrence from SWRCB on the proposal. The bill
requires groundwater monitoring plans for underground injection
projects as part of an application for approval of the project
or for the annual review of the project. This bill will also be
heard by this committee on April 27.
REGISTERED SUPPORT / OPPOSITION:
Support
California League of Conservation Voters
Center for Biological Diversity
Citizens Coalition for a Safe Community
Clean Water Action
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Coastal Environmental Rights Foundation
Environmental Working Group
Environment California
Frack Free Butte County
Los Padres Forest Watch
Save the Sespe
Sierra Club California
The Wildlands Conservancy
Wholly H2O
Opposition
Associated Builders and Contractors of California
California Chamber of Commerce
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California Independent Petroleum Association
National Federation of Independent Businesses
Western States Petroleum Association
Analysis Prepared by:Michael Jarred / NAT. RES. / (916) 319-2092