BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1903


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          (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              |                    |








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          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |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.








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          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  








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            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  








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            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  








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            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  








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               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  








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            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












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