BILL ANALYSIS Ó AB 1903 Page 1 (Without Reference to File) ASSEMBLY THIRD READING AB 1903 (Wilk) As Amended May 31, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Utilities |15-0 |Gatto, Patterson, | | | | |Burke, Chávez, Dahle, | | | | |Eggman, Cristina | | | | |Garcia, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | |Hadley, | | | | | | | | | | | | | | |Roger Hernández, | | | | |Obernolte, Quirk, | | | | |Santiago, Ting, | | | | |Williams | | AB 1903 Page 2 | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |20-0 |Gonzalez, Bigelow, | | | | |Bloom, Bonilla, | | | | |Bonta, Calderon, | | | | |Chang, Daly, Eggman, | | | | |Gallagher, Eduardo | | | | |Garcia, Roger | | | | |Hernández, Holden, | | | | |Jones, Obernolte, | | | | |Quirk, Santiago, | | | | |Wagner, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Requires the California Public Utilities Commission (CPUC) 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: 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 CPUC to publish and transmit the OEHHA report to the appropriate Legislative policy committees biennially beginning January 1, 2018, until 2028. AB 1903 Page 3 4)Requires CPUC 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 CPUC 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: According to the Assembly Appropriations Committee: 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. 3)CPUC costs are minor and absorbable. This bill requires SoCalGas to pay for the costs of the study. 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 CPUC and OEHHA to study and report on potential long-term AB 1903 Page 4 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 CPUC. 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. 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 Governor's Office of Emergency Services (OES) reported it received a complaint about a gas and petroleum leak at 8:25 a.m. Saturday, April 16, 2016 from SoCalGas at the facility. Saturday's leak from a well-known as Standard Sesnon 1-21 was stopped at 10:25 a.m. after it had spewed less than 50 gallons AB 1903 Page 5 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, the Department of Conservation's Division of Oil, Gas and Geothermal Resources (DOGGR) and the CPUC 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 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 CPUC, DOGGR, ARB, and California Energy AB 1903 Page 6 Commission (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 required all gas storage facilities in the state to undertake specific actions to protect against uncontrolled has leaks. Additionally, the Proclamation: a) requires ARB to expand its monitoring of emissions in the community; b) requires the Office of Environmental Health Hazzard Assessment (OEHHA) to review health concerns and determine if additional measures are necessary; and c) requires the CPUC 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 AB 1903 Page 7 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 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) CPUC - $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) of the current legislative session: would have extended the statute of limitations for civil actions resulting from exposure to hazardous materials from the Aliso AB 1903 Page 8 Canyon gas leak. This bill failed passage in the Assembly Judiciary Committee. AB 1904 (Wilk) of the current legislative session: requires OEHHA to evaluate and report to the Legislature on natural gas odorants and potential alternatives by January 1, 2018. Pending in the Assembly. AB 1905 (Wilk) of the current legislative session: 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 failed passage in the Assembly Appropriations Committee. SB 380 (Pavley), Chapter 14, Statutes of 2016: continues the moratorium on injecting natural gas into the Aliso Canyon gas storage facility, requires DOGGR to complete a gas storage well comprehensive safety review (safety review), and requires the CPUC to determine the feasibility of minimizing or eliminating use of the facility. SB 887 (Pavley) of the current legislative session: requires DOGGR to prescribe standards for natural gas storage wells and requires annual inspections. Pending in the Assembly. Analysis Prepared by: Sue Kateley / U. & C. / (916) 319-2083 FN: 0003359 AB 1903 Page 9