BILL ANALYSIS Ó
AB 2788
Page 1
Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2788 (Gatto) - As Amended May 5, 2016
-----------------------------------------------------------------
|Policy |Natural Resources |Vote:|9 - 0 |
|Committee: | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the Division of Oil, Gas, and Geothermal
Resources' (DOGGR) emergency regulations related to underground
gas storage projects to remain in effect until the regulations
are either made permanent, amended, or repealed. This bill
sunsets January 1, 2019.
FISCAL EFFECT:
Minor administrative savings resulting from the extension of the
emergency regulation deadline.
AB 2788
Page 2
COMMENTS:
1)Purpose. According to the author, this bill was
introduced in response to the natural gas leak discovered
in Porter Ranch, California in October, 2015 at the Aliso
Canyon storage facility. This gas leak has been called
the largest natural disaster since the BP oil spill due
to the large amounts of methane released into the
atmosphere.
As a result, Governor Brown declared a state of emergency
in the Porter Ranch area, and DOGGR issued emergency
regulations to ensure additional gas leaks would not
occur. This bill extends the operative period of the
emergency regulations to ensure the most protective
measures remain in effect as agencies take substantive
time to analyze, understand, and address the incident.
2)Emergency Regulations. The Administrative Procedure Act (APA)
was established in the 1940s in part due to California's
landmark laws regarding the regulation of clean air, water,
and energy efficiency. The Office of Administrative Law (OAL)
was established by statute in 1979 to administer the APA. The
creation of the oversight agency was in response to an
unprecedented growth in the number of administrative
regulations and the Legislature's desire to avoid unnecessary
burden on Californians. Forming the OAL was viewed as a
compromise and alternative to proposals to give the
Legislature the ability to review and modify executive branch
regulations.
The APA allows an agency to adopt emergency regulations
AB 2788
Page 3
through an expedited process to remain in effect for 180 days.
Up to two 90-day re-adoptions are allowed if the state agency
is making progress towards adopting permanent regulations.
Emergency regulations can become permanent if the promulgating
agency adopts the emergency regulation through the regular
rulemaking process within the time period the emergency
regulations are still in effect.
On February 5, 2016, DOGGR adopted emergency regulations to
improve the regulation of gas storage wells. The regulations
include additional data reporting requirements, testing of the
gas storage facility, and the submission of a Risk Management
Plan by the Operator to DOGGR to assess the integrity and risk
associated with their gas storage project.
Until January 1, 2019, this bill requires the emergency
regulations to remain in effect until
regulations are made permanent, amended, or repealed.
3)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.
AB 2788
Page 4
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
raising the question on whether another problem exists at the
facility.
4)Related Legislation. Numerous bills have been introduced to
respond to the Aliso Canyon Gas Storage Facility leak. SB 380
(Pavley) imposes an immediate moratorium on natural gas
injection and a restriction on natural gas production at the
AB 2788
Page 5
Aliso Canyon storage facility until certain conditions are
met. This bill is on the Governor's desk for signature.
SB 887 (Pavley) requires DOGGR to prescribe standards for
natural gas storage wells and requires annual inspections.
This bill is pending in the Senate Appropriations Committee.
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 failed passage in the
Assembly 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
currently in this committee's Suspense file.
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 currently in this
committee's Suspense file.
AB 1905 (Wilk) requires the Natural Resources Agency, on or
before July 1, 2017, to complete an independent scientific
study on natural gas injection and storage practices and
facilities. This bill is currently in this committee's
Suspense file.
AB 2788
Page 6
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