BILL ANALYSIS Ó
SB 295
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Date of Hearing: July 14, 2015
ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
Luis Alejo, Chair
SB
295 (Jackson) - As Amended June 24, 2015
SENATE VOTE: Not relevant
SUBJECT: Pipeline safety: inspections.
SUMMARY: Increases the frequency of intrastate pipeline
inspections. Specifically, this bill:
1) Changes from 10 years to 5years the age of the pipeline
that is not provided with effective cathodic protection
that is to be hydrostatically tested on a periodic basis,
and increases that periodic basis from every 3 years to
every 2 years.
2) Changes from 10 years to 5 years the age of the pipeline
that is provided with effective cathodic protection that is
to be hydrostatically tested on a periodic basis, and
increases that periodic basis from every 5 years to every 3
years.
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3) Increases from every 2 years to annually the testing
frequency on those pipelines that are provided with
effective cathodic protection that are on the State Fire
Marshal's list of higher risk pipelines.
4) Deletes language made obsolete by the State Fire
Marshal's active regulations.
5) Requires the State Fire Marshal, or an officer or
employee authorized by the State Fire Marshal, to annually
inspect all operators of intrastate pipelines under the
jurisdiction of the State Fire Marshal to ensure compliance
with applicable laws and regulations.
6) Requires the State Fire Marshal, to the maximum extent
possible, to become an inspection agent by entering into an
interstate inspection agent agreement with the federal
Pipeline and Hazardous Materials Safety Administration for
authority to inspect portions of interstate pipelines that
are not under the jurisdiction of the State Fire Marshal.
7) Requires the State Fire Marshal to revise the fee
assessed to a level sufficient to cover the costs
associated with implementation.
EXISTING LAW:
1) Pursuant to the Elder California Pipeline Safety Act of
1981:
a. Requires the State Fire Marshal to adopt
hazardous liquid pipeline safety regulations in
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compliance with the federal law relating to hazardous
liquid pipeline safety, including, but not limited to,
compliance orders, penalties, and inspection and
maintenance provisions. (Government Code (GO) §51011)
b. Requires each pipeline operator to file with
the State Fire Marshal an inspection, maintenance,
improvement, or replacement assessment for older
pipelines built before January 1, 1960 and any
pipeline installed on or after January 1, 1960, for
which regular internal inspections cannot be
conducted, or which shows diminished integrity due to
corrosion or inadequate cathodic protection. (GO
§51012.4)
c. Requires every newly constructed pipeline,
existing pipeline, or part of a pipeline system that
has been relocated or replaced, and every pipeline
that transports a hazardous liquid substance or highly
volatile liquid substance, to be tested in accordance
with federal regulations and every pipeline more than
10 years of age and not provided with effective
cathodic protection to be hydrostatically tested every
three years, except for those on the State Fire
Marshal's list of higher risk pipelines, which shall
be hydrostatically tested annually. (GO §51013.5)
d. Defines "hydrostatic testing" as the
application of internal pressure above the normal or
maximum operating pressure to a segment of pipeline,
under no-flow conditions for a fixed period of time,
utilizing a liquid test medium. (GO §51010.5 (c))
e. Authorizes the State Fire Marshal to assess
and collect from every pipeline operator an annual
administrative fee. (GO §51019)
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2) Pursuant to the Lempert-Keene-Seastrand Oil Spill
Prevention and Response Act:
a. States that because of the inadequacy of
existing cleanup and response measures and technology,
the emphasis must be put on prevention, if the risk
and consequences of oil spills are to be minimized,
and that improvements in the design, construction, and
operation of rail tank cars, tank trucks, tank ships,
terminals, and pipelines; improvements in marine
safety; maintenance of emergency response stations and
personnel; and stronger inspection and enforcement
efforts are necessary to reduce the risks of and from
a major oil spill. (GO §8670.2 (f)-(g))
b. Requires the Governor to appoint an oil spill
response coordinator (GO §86703.4) who has the primary
authority to direct prevention, removal, abatement,
response, containment, and cleanup efforts with regard
to all aspects of any oil spill in waters of the
state, in accordance with any applicable facility or
vessel contingency plan and the California oil spill
contingency plan. (GO §8670.7)
c. Requires the Governor to establish a state oil
spill contingency plan (GO §8574.1 et seq.),
establishes oil spill response and contingency
planning requirements (GO §8670.1 et seq.), and
establishes oil spill prevention, response,
containment, and cleanup programs. (Public Resources
Code §8750 et seq.)
FISCAL EFFECT: Unknown.
COMMENTS:
Need for the bill: According to the author, "On May 19 of this
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year tragedy struck when an onshore pipeline carrying crude oil
ruptured and spilled more than 100,000 gallons of oil, more than
20,000 gallons of which ended up in the ocean off the Santa
Barbara Coastline. To date, this spill has caused significant
negative impacts to the ocean, local beaches, wildlife, and the
local economy. Although the investigation into the response and
the oil spill is ongoing, we do know that corrosion was
responsible for the rupture. Before the spill, the last
completed inspection was in 2013. The pipeline was again
inspected in 2015, but at the time of the accident the results
of the inspection had not been analyzed.
"The pipeline that ruptured-Line 901-was being inspected every
other year. If Line 901 had been inspected annually the
corrosion would likely have been detected before it ruptured and
this disaster would have been avoided. Because Line 901 is
federally regulated, SB 295 addresses these shortcomings by
directing the State Fire Marshall to seek the authority to
inspect federally regulated pipelines and to inspect all
pipelines annually.
"Increasing the frequency of hydrostatic testing will also help
reduce the risk of oil spills caused by pipeline failure.
Hydrostatic tests are performed by pressurizing pipelines beyond
their operating pressure. It has been reported that the
operating pressure of line 901 was 650 pounds per square inch
(psi); the failure occurred when the pressure spiked to 700 psi,
or 107.7 percent of its operating pressure. The State Fire
Marshall pressurizes pipelines to 125 percent during hydrostatic
testing, well above the 107.7 percent that caused line 901 to
fail. A hydrostatic test would likely have ruptured Line 901,
spilling nothing.
"Most importantly, oil pipeline owners should be financially
responsible to ensure their pipelines operate safely and meet
applicable laws and regulations, not taxpayers, which is why SB
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295 requires fee increases on pipeline owners to pay for more
inspections."
Refugio oil spill: On May 20, 2015, Governor Brown issued an
emergency proclamation for Santa Barbara County due to the
effects of the oil spill described by the author. Refugio State
Beach and El Capitan State Beach have been closed for more than
a month because of the oil spill. Fisheries from Canada de
Algeria to Coal Oil Point remain closed, which has negatively
impacted several commercial fisheries - including lobster, crab,
shrimp, halibut, urchin, squid, whelk, and sea cucumber. The
Oiled Wildlife Care Network has recovered 192 dead birds and 103
dead marine mammals from the spill to date. Dead marine mammals
recovered include dolphins, sea lions and seals. Sensitive
habitat of the California least tern and the snowy plover, birds
protected by the Endangered Species Act, has been damaged.
Hotels, tour outfits and other tourism businesses have
experienced cancelations and decreased bookings due to the
spill. More than 1,000 workers from local, state and federal
agencies have been working to clean up the beaches. Since May
20, approximately 14,267 gallons of oily water have been
recovered.
On May 21, 2015, the Pipeline and Hazardous Material Safety
Administration (PHMA) issued a Correct Action Order to require
Plans All American Pipeline, the owner of the ruptured pipeline,
to take certain corrective actions to protect the public,
property, and the environment from potential hazards associated
with Line 901 in Santa Barbara County. The Correct Action Order
also found that Line 901 was a 24-inch diameter line that was
installed in 1987 and the section that ruptured had extensive
corrosion. The deepest metal loss at each area ranged between
54%-74% of the original pipeline wall thickness. The failure
site wall thickness had degraded to an estimate 1/16 of an inch.
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Oil spill prevention and response: The Lempert-Keene-Seastrand
Oil Spill Prevention and Response Act (Act) requires the
Governor to establish a state oil spill contingency plan,
establishes oil spill response and contingency planning
requirements, and establishes oil spill prevention, response,
containment, and cleanup programs. Under the Act, the oil spill
administrator promulgates regulations that provide for the best
achievable protection of waters and natural resources of the
state. The regulations permit the development, application, and
use of an oil spill contingency plan for vessels, pipelines,
terminals, and facilities within a single company or
organization, and across companies and organizations. Each oil
spill contingency plan must provide for appropriate financial or
contractual arrangements for all necessary equipment and
services for the response, containment, and cleanup of a
reasonable worst case oil spill scenario for each area the plan
addresses.
Plains All American Pipeline has an Oil Spill Contingency Plan
and will pay for the more than $92 million in cleanup costs that
have been incurred so far.
Arguments in support: According to the California Professional
Firefighters, "Ultimately SB 295, through the implementation of
such required inspections, will better protect Californians
against a repeat of the May 2015 tragedy where an onshore
pipeline carrying crude oil ruptured and spilled over 100,000
gallons of oil ?The pipeline that ruptured was being inspected
biennially. However, if it has been on an annual inspection
schedule, the pipeline's corrosion would have been detected
before rupturing and this disaster would have been avoided."
Arguments in opposition: According to the Western States
Petroleum Association, "A key concern with SB 295 is a mandate
for intrastate pipeline operators to conduct more frequent
hydrostatic testing of pipelines without considering the
drawbacks and unintended consequences it can have on crude oil
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pipelines ? SB 295 would not lower the risk of pipeline spills
and may actually have more unintended consequences of placing
pipelines at risk by requiring more frequent hydrostatic testing
since this method cannot determine where any defects are located
along the pipeline system. Not only that, requiring more
hydrostatic testing raises significant questions about increased
water use, disposal and treatment costs, and lost throughput by
taking product out of the pipeline without any determinable
level of increased safety. On the other hand, in-line
inspection tools provide a complete listing of the defects in
the pipeline and their location in an electronic format which
can be used as a baseline for future inspections and to
calculate corrosion rates."
Related legislation: AB 864 (Williams, 2015), which is pending
before the Senate Natural Resources & Water Committee, would
require the operators of pipelines in environmentally and
ecologically sensitive areas of state waters or along the coasts
of those areas to use the best achievable technologies to reduce
the amount of oil released in an oil spill to protect the state
waters and wildlife, and to include a description of the use of
those technologies in their oil spill contingency plans.
Double referral: This bill is double referred to the Assembly
Government Organization Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
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Asian Pacific Environmental Network
Azul
California Coastal Commission
California Coastal Protection Network
California Professional Firefighters
Center for Biological Diversity
Clean Water Action
Defenders of Wildlife
Environment California
Environmental Action Committee of West Marin
Environmental Defense Center
Environmental Working Group
Heal the Bay
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National Parks Conservation Association
Natural Resources Defense Council
Santa Barbara Channelkeeper
Surfrider Foundation
Surfrider Foundation, Santa Barbara Chapter
Surfrider Foundation, South Bay Chapter
WILDCOAST
Opposition
California Independent Petroleum Association
Western States Petroleum Association
Analysis Prepared by:Paige Brokaw / E.S. & T.M. / (916)
319-3965
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