BILL ANALYSIS Ó
AB 1903
Page 1
Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1903 (Wilk) - As Amended April 4, 2016
-----------------------------------------------------------------
|Policy |Utilities and Commerce |Vote:|15 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the California Public Utilities Commission
(PUC) to authorize a study of the long-term health impacts
associated with the natural gas leak from the Aliso Canyon
facility (facility), to be conducted by the Office of
Environmental Health Hazard Assessment (OEHHA). Specifically,
this bill:
AB 1903
Page 2
1)Requires an investigation of the impact of the natural gas
leak on the health of persons residing within a 12-mile radius
of the facility from the date of the leak until the gas well
safety review is complete.
2)Requires the study to include an evaluation of the impact on
residents due to exposure to chemicals, including, but not
limited to, methane, benzene, and mercaptan.
3)Requires PUC to publish and transmit the OEHHA report to the
appropriate Legislative policy committees biennially beginning
January 1, 2018, until 2028.
4)Requires PUC to order Southern California Gas Company
(SoCalGas) to pay for the study and prohibits SoCalGas from
recovering any of the costs from rates.
5)Authorizes PUC to include the costs of the study in any
penalty assessment if SoCalGas is penalized.
6)Sunsets the provisions on January 1, 2029.
FISCAL EFFECT:
1)Increased costs over the first three years of $12.5 million
for OEHHA to perform the various evaluations and studies.
2)Ongoing annual costs of $3.3 million for OEHHA until from the
fourth year until December 31, 2028
AB 1903
Page 3
3)PUC costs are minor and absorbable.
This bill requires SoCalGas to pay for the costs of the study
but does not provide a mechanism for OEHHA reimbursement.
COMMENTS:
1)Purpose. According to the author, residents of Porter Ranch
have many questions regarding the Aliso Canyon facility gas
leak and the long-term health impacts. This bill requires the
PUC and OEHHA to study and report on potential long-term
health impacts.
2)Aliso Canyon Gas Leak. The Aliso Canyon Gas Storage Facility
is owned by the SoCalGas and is located in Los Angeles County
just north of Porter Ranch. SoCalGas is a gas corporation
regulated by the PUC.
On October 23, 2015, SoCalGas detected a methane gas leak at
its Aliso Canyon Gas Storage Facility at Well # SS-25.
Following an initial evaluation and several attempts to stop
the leak, SoCalGas began drilling a relief well in order to
plug the leaking well. The initial attempts to plug the leak
failed, and the leak lasted 112 days before being permanently
capped on February 18, 2016.
A study in the journal Science confirmed that the methane gas
leak was not only the largest in California's history, but
also the second largest in the nation. According to the lead
author of the study, as much as 60 metric tons of methane
spewed from the leak each hour.
AB 1903
Page 4
The leak displaced over 5,000 households, requiring families
to move into temporary housing and hotels provided by
SoCalGas.
Since October 25, 2016, no natural gas has been injected into
the facility.
However, on April 13, 2016, residents living near the natural
gas storage field complained of a strong odor. The Governors
Office of Emergency Services (OES) reported it received a
complaint about a gas and petroleum leak at 8:25a.m. Saturday,
April 16, 2016 from SoCalGas at the facility. Saturdays leak
from a well known as Standard Sesnon 1-21 was stopped at
10:25a.m. after it had spewed less than 50gallons of oil spray
and an unknown amount of natural gas, according to an OES
document.
3)Chronology of Events and State Response. Following the
detection of the leak, in November and December 2015, DOGGR
and the PUC issued orders establishing a moratorium on natural
gas injection at Aliso Canyon. The orders included
requirements to provide data, retain evidence, and track the
costs of the effort to plug the well. Additionally, the Air
AB 1903
Page 5
Resources Board (ARB) began collecting and publishing data on
methane emissions caused by the leak.
On January 6, 2016, the Governor issued a Proclamation
directing various state entities to oversee SoCalGas' actions
to stop the leak, protect public safety, ensure accountability
and strengthen oversight of natural gas storage facilities.
On February 11, 2016, SoCalGas announced it had temporarily
controlled the flow of natural gas at the leaking well and
would continue to work in coordination with DOGGR and other
agencies during the process of permanently sealing the well.
On February 18, 2016, DOGGR confirmed the leaking well was
permanently sealed and taken out of service.
On March 4, 2016, DOGGR issued an order to SoCal Gas to follow
a comprehensive safety review, upgrade equipment and detection
devices, and plug and abandon wells as specified. This order
prohibits the Supervisor from lifting the injection
prohibition until all specified requirements have been met.
On March 28, 2016, the PUC, DOGGR, ARB, and CEC issued an
update on the status of state actions taken in response to the
gas leak.
4)Governor's Emergency Proclamation and Budget Proposals. In
addition to the provisions in this bill, the Governor's
Proclamation required DOGGR to issue emergency regulations and
AB 1903
Page 6
required all gas storage facilities in the state to undertake
specific actions to protect against uncontrolled has leaks.
Additionally, the Proclamation: 1) requires ARB to expand its
monitoring of emissions in the community; 2) requires the
Office of Environmental Health Hazzard Assessment (OEHHA) to
review health concerns and determine if additional measures
are necessary; and 3) requires the PUC and CEC, in
coordination with the ISO, to take all steps necessary to
ensure energy reliability during the moratorium.
On April 1, 2016 the Governor revised his proposed January
budget to include additional augmentations to the following
agencies to implement the directed actions and improve public
safety statewide:
a) CEC - $1,739,000 and three positions to monitor, model
and analyze the interaction of electricity and natural gas
systems for reliability (Public Interest Research,
Development, and Demonstration Fund);
b) DOGGR - $4,172,000 and 20 positions to support increased
regulatory activities and $1 million to increase efforts to
remediate orphan wells (Oil, Gas and Geothermal Resources
Fund);
c) ARB - $2,276,000 and four positions to provide air
quality monitoring near oil and gas operations (Oil, Gas
AB 1903
Page 7
and Geothermal Resources Fund);
d) OEHHA - $350,000 and 2 positions to support ARB's air
quality monitoring (Oil, Gas and Geothermal Resources
Fund);
e) PUC - $1,479,000 and 10 positions for increased workload
related to regulating natural gas facilities and $1,694,000
and 11 positions to create the Division of Safety Advocates
(Public Utilities Commission Utilities Reimbursement
Account).
1)Related Legislation. Numerous bills have been introduced to
respond to the Aliso Canyon Gas Storage Facility leak. AB
1902 (Wilk) would have extended the statute of limitations for
civil actions resulting from exposure to hazardous materials
from the Aliso Canyon gas leak. This bill failed in the
Judiciary Committee.
AB 1904 (Wilk) requires OEHHA to evaluate and report to the
Legislature on natural gas odorants and potential alternatives
by January 1, 2018. This bill is on suspense in this
committee.
AB 1905 (Wilk) requires the Secretary of the Natural Resources
Agency to conduct and complete an independent scientific study
on natural gas injection and storage practices by July 1,
2017. This bill is on suspense in this committee.
AB 1903
Page 8
SB 380 (Pavley) continues the moratorium on injecting natural
gas into the Aliso Canyon gas storage facility, requires the
Division of Oil, Gas and Geothermal Resources (DOGGR) to
complete a gas storage well comprehensive safety review
(safety review), and requires the California Public Utilities
Commission (PUC) to determine the feasibility of minimizing or
eliminating use of the facility. This bill is pending on the
Assembly floor.
SB 887 (Pavley) requires DOGGR to prescribe standards for
natural gas storage wells and requires annual inspections.
This bill is pending in the Senate Appropriations Committee.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081