BILL ANALYSIS Ó
SB 295
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Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, 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 5 years 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 (SFM) list of
higher risk pipelines.
4)Deletes language made obsolete by SFM's active regulations.
5)Requires SFM, or an officer or employee authorized by the SFM,
to annually inspect all operators of intrastate pipelines
under the jurisdiction of the SFM to ensure compliance with
applicable laws and regulations.
6)Requires SFM, 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.
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7)Requires SFM 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 SFM to adopt hazardous liquid pipeline safety
regulations in 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 SFM 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
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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 SFM'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 SFM to assess and collect from every pipeline
operator an annual administrative fee. (GO §51019)
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
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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:
Purpose of the Bill : According to the author, "On May 19 of
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this 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,
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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
295 requires fee increases on pipeline owners to pay for more
inspections."
Refugio Oil Spill : On May 19, 2015, a pipeline owned by
Houston-based Plains All American Pipeline ruptured, spilling up
to 101,000 gallons of heavy crude oil along the Gaviota coast in
Santa Barbara County. It is estimated that as much as 21,000
gallons of the oil went down a storm culvert onto cliffs and
into the Pacific Ocean. The immediate oil spill area stretched
over nine miles of California coastline, and tar balls have
washed up as far as one hundred miles from the spill site. The
pipeline that ruptured, known as Line 901, is a common carrier
pipeline that transports oil that was produced on platforms
offshore in both state and federal waters to be refined in Santa
Maria or Kern County.
On May 20, 2015, Governor Brown issued an emergency proclamation
for Santa Barbara County due to the effects of the oil spill.
Refugio State Beach and El Capitan State Beach have been closed
for over a month because of the oil spill. Fisheries from Canada
de Alegria to Coal Oil Point remain closed, which has negatively
impacted several commercial fisheries - including lobster, crab,
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shrimp, halibut, urchin, squid, whelk, and sea cucumber. The
Oiled Wildlife Care Network has recovered 192 dead birds and 106
dead marine mammals from the spill to date. Dead marine mammals
recovered included 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 132 volunteers have participated in clean-up
efforts. 14,267 gallons of oily water have been recovered to
date.
Lempert-Keene-Seastrand Oil Spill Prevention and Response Act
(Act) : On March 24, 1989, the Exxon Valdez spilled
approximately 11 million gallons of crude oil in Alaska. Less
than a year later on February 7, 1990 the American Trader
spilled approximately 416,598 gallons of crude oil off
Huntington Beach in Southern California. These events inspired
the California Legislature to enact legislation in 1990 called
the Lempert-Keene-Seastrand Oil Spill Prevention and Response
Act.
The Act covers all aspects of marine oil spill prevention and
response in California. It established an Administrator who is
given very broad powers to implement the provisions of the Act.
The Act also gave the State Lands Commission certain authority
over marine terminals. In 1991, the Office of Spill Prevention
and Response (OSPR) opened, headed by the Administrator.
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The Act created an Administrator who is appointed by the
Governor, subject to the advice and consent of the Senate, and
serves at the pleasure of the Governor. Subject to the
Governor, the Administrator has the primary authority in
California to direct prevention, removal, abatement, response,
containment, and cleanup efforts with regard to all aspects of
any oil spill in marine waters of the state. The Governor,
through the Administrator, must provide the best achievable
protection of the coast and marine waters.
The Administrator is also a Chief Deputy Director of the
California Department of Fish & Wildlife, and as such the
Administrator has been delegated the additional responsibilities
of carrying out the statewide water pollution enforcement
authority of the Department of Fish & Wildlife.
In 2014, Governor Edmund G. Brown Jr. expanded the OSPR program
to cover all statewide surface waters at risk of oil spills from
any source, including pipelines and the increasing shipments of
oil transported by railroads. This expansion provided critical
administrative funding for industry preparedness, spill
response, and continued coordination with local, state and
federal government along with industry and non-governmental
organizations. SB 861(Senate Committee on Budget) authorized the
expansion and provided the additional statutory and regulatory
authority, for the prevention, preparedness and response
activities in the new inland areas of responsibility. Key
objectives are:
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Target critical locations to stage spill responders and
equipment for the best response to rail and pipeline
incidents;
Develop effective regulations in close collaboration
with local government, non-governmental organizations, and
industry;
Implement regulations that will guide industry, local
and state government, and the public and build
relationships with local governments through workshops and
presentations;
Create inland response plans that have the depth and
breadth of the marine Area Contingency Plans; and,
Work with communities to build a strong response spill
team.
Intrastate vs. Interstate Pipelines : The U.S. Department of
Transportation Pipeline and Hazardous Materials Safety
Administration (PHMSA) has exclusive federal authority over
interstate pipeline facilities (49 USC § 60101, et seq.).
Interstate pipeline is defined as a pipeline or that part of a
pipeline that is used in the transportation of hazardous liquid
or carbon dioxide in interstate or foreign commerce. Typically,
these lines cross state borders, of begin in federal waters.
Also, A Federal Energy Regulatory Commission (FERC) filing by
the operator can be the determining factor. The two pipelines
in Santa Barbara County have a FERC filing.
Office of the State Fire Marshal (OSFM) has safety regulatory
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and enforcement authority over intrastate hazardous liquid
pipelines pursuant to the Elder California Pipeline Safety Act
of 1981 (Gov. Code, § 51010, et seq.). Intrastate pipeline is
defined as means a pipeline or that part of a pipeline to which
this part applies that is not an interstate pipeline. Those
pipelines are located entirely within state borders including
offshore state waters.
SB 295 requires the SFM, to the maximum extent possible, become
an inspection agent through entering into an interstate
inspection agent agreement with the federal PHMSA.
Pipeline Testing :
1. Hydrostatic Testing - This test involves filling the
pipe system with a liquid, usually water, which may be dyed
to aid in visual leak detection, and pressurization of the
vessel to the specified test pressure. The test for oil
pipelines are done at 125% of pressure over an 8 hour
period. Pressure tightness can be tested by shutting off
the supply valve and observing whether there is a pressure
loss. The location of a leak can be visually identified
more easily if the water contains a colorant. Strength is
usually tested by measuring permanent deformation of the
container. Hydrostatic testing is the most common method
employed for testing pipes.
2. Pipe Line Inspection Gauge (a.k.a. "Smart Pig") - Smart
Pigs are inspection devices that record information about
the internal conditions of a pipeline. The device is
inserted into the pipeline and is pushed along by the
flowing product. They may measure several different things
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from inside of the pipeline, including restrictions and
deformations of the pipe, as well as metal loss. Smart
Pigging is effective at detecting pre-leak situations.
Should SB 295 become law, it would increase the frequency of
hydrostatic testing from 5 years to 3 years for pipes with
cathodic protection; and from 3 years to 2 years for pipes
without cathodic protection. Some concerns have been raised by
industry that increasing the frequency of these high pressure
tests could be counterproductive because it could weaken the
integrity of the pipes.
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."
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
pipelines ? SB 295 would not lower the risk of pipeline spills
and may actually have more unintended consequences of placing
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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."
Author amendments : The author will propose amendments in
committee in response to concerns raised about pipelines being
weakened through more frequent hydrostatic testing. The
amendments will:
1. Requires the State Fire Marshal to approve other
pressure tests, specifically "Smart Pigging", in lieu of
hydrostatic testing.
2. Should operator use other pressure tests, they shall
occur twice as frequently (Annually for non-cathodic and
every 18 months for cathodic pipes) as than hydrostatic
tests.
3. This amendment shall not apply to State Fire Marshal's
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list of higher risk pipelines.
REGISTERED SUPPORT / OPPOSITION:
Support
Asian Pacific Environmental Network
Audubon California
Azul
California Coastal Commission
California Coastal Protection Network
California Professional Firefighters
Center for Biological Diversity
Clean Water Action
Defenders of Wildlife
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Environment California
Environmental Action Committee of West Marin
Environmental Defense Center
Environmental Working Group
Heal the Bay
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
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Western States Petroleum Association
Analysis Prepared by:Kenton Stanhope / G.O. / (916)
319-2531