BILL ANALYSIS Ó
AB 1905
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1905 (Wilk) - As Amended April 7, 2016
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This urgency bill requires the Secretary of the Natural
Resources Agency (NRA) to conduct and complete an independent
scientific study on natural gas injection and storage practices
by July 1, 2017.
FISCAL EFFECT:
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Based on the costs of a similar study on fracking conducted by
the California Council on Science and Technology, this bill will
require approximately $3 million in contracts (GF, Oil, Gas and
Geothermal Administrative Fund or other special fund).
COMMENTS:
1)Rationale. Although the Governor has directed the Division
of Gas and Geothermal Resources (DOGGR) the California Public
Utilities Commission (PUC), the Air Resources Board (ARB), and
California Energy Commission (CEC) to assess the long-term
viability of natural gas storage facilities and prepare a risk
management plan, there is additional value in an independent
scientific review.
The previous independent science study on well stimulation
(fracking) raised important questions and issues. In
response, Governor's office formed an interagency working
group to respond to the study's findings and recommendations.
The study required by this bill could also help inform how the
state regulates natural gas storage facilities.
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
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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
raising the question on whether another problem exists at the
facility.
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
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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 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
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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: 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
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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) 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) extends the statute of limitations for civil
actions resulting from exposure to hazardous materials from
the Aliso Canyon gas leak. This bill is pending in the
Judiciary Committee.
AB 1903 (Wilk) directs the Office of Environmental Health
Hazard Assessment (OEHHA) to study the long-term health
impacts of the Aliso Canyon natural gas leak. This bill is
pending in this Committee.
AB 1904 (Wilk) requires the OEHHAto evaluate and report to
the Legislature on natural gas odorants and potential
alternatives by January 1, 2018. This bill is on suspense in
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this committee.
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 Environmental Quality
Committee.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081