BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1904 (Wilk) - Hazardous materials: natural gas odorants
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|Version: June 23, 2016 |Policy Vote: E.Q. 7 - 0 |
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|Urgency: Yes |Mandate: No |
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|Hearing Date: August 8, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary:1) AB 1904 requires the Office of Environmental Health Hazard
Assessment (OEHHA) to assess the health and environmental
dangers posed by odorants used in natural gas, and to submit a
report to the Legislature on or before January 1, 2019.
Fiscal Impact:
Approximately $945,000 (Oil, Gas Geothermal Administrative
Fund or General Fund) for OEHHA to conduct the assessment.
Unknown, likely minor, costs to relevant agencies for required
consultation.
Background:
Aliso Canyon gas leak impacts. On October 23, 2015, Southern
California Gas Company (SoCalGas) discovered a significant
natural gas leak from "Standard Sesnon 25" (SS 25) well at the
Aliso Canyon. The Aliso Canyon is located adjacent to the
community of Porter Ranch within the city of Los Angeles.
Several days passed before SoCalGas disclosed to the community
that a significant uncontrolled leak was occurring. The leak
lasted for four months, resulted in the relocation of more than
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5,000 households (at SoCalGas's expense), and resulted in
hundreds of public health complaints. In addition to the public
health concerns, the Air Recourses Board's (ARB) initial coarse
estimates indicate that about 95,000 metric tons of methane was
released into the air, adding approximately 20 percent to the
statewide methane emissions during the duration of the leak.
The Administration's Response. On January 6, 2016, Governor
Brown issued a proclamation that declared the Aliso Canyon
situation an emergency. The emergency proclamation detailed the
administration's efforts to help stop the leak and directed
further action to protect public health and safety, ensure
accountability, and strengthen oversight of gas storage
facilities. Among other things, the proclamation specifically
directed OEHHA to convene an independent panel of scientific and
medical experts to review public health concerns stemming from
the gas leak and evaluate whether additional measures are needed
to protect public health beyond those already put in place.
During and after the gas leak, OEHHA evaluated the health
hazards and risks posed by the gas leak. Among other things,
OEHHA's evaluation concluded that the available air sample data
did not indicate an acute health hazard, and current measured
exposures to benzene (a cancer-causing chemical) are below the
level of concern for chronic health effects.
The 2016-17 Budget includes $13.8 million and 57 positions to
implement the Governor's emergency proclamation, enhance efforts
to improve public safety statewide, and strengthen oversight of
gas storage facilities.
California Energy Commission: $1.7 million 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).
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Department of Conservation: $4.2 million and 20 positions to
support increased regulatory activities (Oil, Gas and Geothermal
Resources Fund).
Air Resources Board: $2.3 million and four positions to provide
air quality monitoring near oil and gas operations (Oil, Gas and
Geothermal Resources Fund).
Office of Environmental Health Hazards Assessment: $350,000 and
two positions to support ARB's air quality monitoring (Oil, Gas
and Geothermal Resources Fund).
California Public Utilities Commission: $1.5 million and 10
positions for increased workload related to regulating natural
gas facilities and $1.7 million) and 11 positions to create the
Division of Safety Advocates (Public Utilities Commission
Utilities Reimbursement Account).
The Local Response. On February 2, 2016, SoCalGas confirmed in
writing its commitment to provide funding for reasonable costs
to conduct a health study on potential impacts of the Aliso
Canyon gas leak, as required by the Order for Abatement issued
by the South Coast Air Quality Management District (SCAQMD). The
order requires that the study is conducted by a third-party
approved by the SCAQMD and SoCalGas, and that an advisory
committee is established to evaluate field data, analysis
methods, and results. The scope of work proposes that the
study, among other things, (1) identify of chemicals (or
constituents) of potential concern associated with the release;
(2) determine the potential areas of concern and exposure point
concentrations; (3) generate chronic toxicity values for the
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widely-used natural gas odorants tetrahydrothiophene and
tert-butylmercaptan; and (4) identify and describe key
uncertainties. According to the SCAQMD, it is currently in
contract negotiations with the National Academy of Sciences to
conduct the initial phase of the study, which will determine
subsequent phases of the study.
Proposed Law:
This bill:
1)Requires OEHHA, on or before January 1, 2019, to submit a
report to the Legislature that includes the following:
a. An assessment of any potential danger of odorants
currently used in natural gas storage facilities in the
state pose to public health and safety and the
environment.
b. Alternative odorants identified for possible use in
natural gas storage facilities that pose a lower risk to
public health and safety and the environment.
2)Requires the assessment to evaluate the following issues for
every alternative odorant identified:
a. The feasibility of using the alternative odorant in
natural gas storage facilities.
b. Any risks of using the alternative odorant.
c. The effectiveness of the alternative odorant at
warning of a natural gas leak.
3)Requires OEHHA to consult with appropriate entities including,
but not limited to, odorant producers, appropriate state
agencies or federal agencies, or both, and interested parties
with germane existing scientific research.
4)Defines "odorant" as any material added to natural gas to
impart a distinct odor so that the natural gas is readily
detectable by a person with a normal sense of smell.
5)Sunset the bill on January 1, 2021.
6)States that the bill takes effect immediately as an urgency
statute.
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Related Legislation:
SB 380 (Pavley, Chapter 14, Statutes of 2016,) extends the
Administration's moratorium on injection at the Aliso Canyon
facility until the wells are determined to be safe.
SB 887 (Pavley, 2016) provides a framework for reforming
oversight of natural gas storage facilities. The bill mandates
minimum standards for equipment inspections, monitoring, and
testing; training of personnel; leak monitoring; response
planning; reporting; and information sharing. This bill is
pending Assembly Appropriations Committee.
SB 888 (Allen, 2016) establishes the Governor's Office of
Emergency Services as the lead state responder in the event of a
natural gas leak and bar leak-related costs from being borne by
rate payers. This bill is pending Assembly Appropriations
Committee.
SB 1383 (Lara, 2016) establishes goals for the emissions of
short-lived climate pollutants (including methane). This bill is
pending Assembly Appropriations Committee.
SB 1441 (Leno, 2016) prohibits the commission from allowing gas
corporations to seek or receive recovery from ratepayers for the
value of natural gas lost to the atmosphere during the
extraction, production, storage, processing, transportation, and
delivery of the natural gas. This bill is pending Assembly
Appropriations Committee.
AB 1882 (Williams, 2016) prevents the approval of underground
injection well projects without concurrence of the State Water
Resources Control Board. This bill was held in Assembly
Appropriations Committee.
AB 1902 (Wilk, 2016) establishes a three-year statute of
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limitations for Aliso Canyon leak-related civil actions. This
bill was held in Assembly Judiciary Committee.
AB 1904 (Wilk, 2016) requires the Office of Environmental Health
Hazard Assessment to undertake a study of odorants. This bill is
pending Senate Appropriations Committee as an urgency measure.
AB 1905 (Wilk, 2016) requires an independent science study of
natural gas storage facilities. This bill was held in Assembly
Appropriations Committee.
Staff
Comments:
Fiscal impact. According to OEHHA, this fiscal is based on
assigning two Staff Toxicologist (Specialist) and one Senior
Environmental Scientist (Specialist) positions for 18 months at
a cost of $645,000 ($150,000 per year in salary and benefits for
each Staff Toxicologist; $130,000 per year in salary and
benefits for the Senior Environmental Scientist), plus $300,000
for contract funds for consultation on scientific matters
related to feasibility, safety, and ecological impacts of
odorants and alternatives. The Oil, Gas, and Geothermal
Administrative Fund appears to be the most appropriate funding
source for these activities. Assistance from additional entities
such as the Division of Oil, Gas, and Geothermal Resources and
Lawrence Berkeley National Laboratory would probably be needed
for assessing the non-health risks, feasibility, and
effectiveness of alternative lower-risk odorants that are not
currently used in California natural gas facilities.
Staff notes that no funding source is identified in the bill,
which could result in General Fund pressures. The author may
wish to add language to clarify which funding source should be
used to fund the assessment.
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