BILL ANALYSIS Ó
AB 2756
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2756 (Thurmond) - As Amended May 11, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill Enhances the Division of Oil, Gas, and Geothermal
Resources' (DOGGR) penalty, shut-in order, and investigation
authority. This bill authorizes DOGGR to permit environmentally
AB 2756
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beneficial projects in lieu of up to 50% of the amount of a
civil penalty.
1)Requires the DOGGR Supervisor to consider additional
circumstances, as specified when determining the amount of the
civil penalty:
2)Sets ranges of civil penalty amounts depending on whether the
violation is a well stimulation a major violation , or a minor
violation as follows:
a) Not less than $10,000 or more than $25,000 per day per
well-stimulation violation.
b) Not less than $2,500 or more than $25,000 per major
violation.
c) Not more than $5,000 per minor violation.
The Supervisor has the discretion to treat each day of major
and minor violation as a separate violation.
3)Authorizes DOGGR to permit environmentally beneficial projects
in lieu of up to 50% of the civil penalty amount.
4)Creates the Oil and Gas Environmental Remediation Account and
requires civil penalties to be deposited in the account to be
appropriated by Legislature for specified remediation and well
plugging projects.
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5)Revises the appeal, emergency order, and informal hearing
process and procedures for operators to appeal an order from
the DOGGR Supervisor to the Director of the Department of
Conservation.
6)Allows the DOGGR Supervisor to impose a state tax lien against
the real property of the operator for civil penalties
assessed.
FISCAL EFFECT:
The costs of this bill are absorbable within existing DOGGR
resources, potential minor savings resulting from changes in
hearing procedures.
COMMENTS:
1)Rationale. DOGGR was created in 1915 to supervise the
drilling, operation, maintenance, and plugging and abandonment
of onshore and offshore oil, gas, and geothermal wells.
California is in the top five oil producing states in the
country and produced over 200 million barrels of oil in 2014.
In October 2015, DOGGR released its "Renewal Plan for Oil and
Gas Regulation," which outlines reforms DOGGR will undertake
with the goal of having "an effective regulatory program that
ensures the protection of public health and the environment in
the oil fields of California." One issue DOGGR has identified
as needing improvement is its enforcement of the state's oil
and gas laws and regulations.
AB 2756
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This bill enhances DOGGR's penalty and enforcement authority
and allows SEPs for 50% of a total civil penalty.
2)Discussions Continue. The author, sponsor and representatives
from the oil and gas industry have resolved many differences
that are reflected in this version of the bill. However,
all parties are continuing to work on provisions related to
penalty enhancements and due process.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081