Amended in Assembly March 7, 2016

Amended in Assembly February 16, 2016

Amended in Senate January 27, 2016

Senate Bill No. 380

Introduced by Senator Pavley

(Principal coauthors: Senators De León and Huff)

(Coauthors: Senators Allen, Hertzberg, and Runner)

(Coauthor: Assembly Member Wilk)

February 24, 2015

An act to add begin insert and repeal end insert Section 3217 begin delete to end delete begin insert of end insert the Public Resources Code, and to add Section 713 to the Public Utilities Code, relating to natural gas, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 380, as amended, Pavley. Natural gas storage: moratorium.

(1) Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law requires the State Oil and Gas Supervisor to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field, so as to prevent damage to life, health, property, and natural resources, as provided; to permit owners and operators of wells to utilize all known methods and practices to increase the ultimate recovery of hydrocarbons; and to perform the supervisor’s duties in a manner that encourages the wise development of oil and gas resources to best meet oil and gas needs in this state. Under existing law, a person who fails to comply with certain requirements relating to the regulation of oil or gas operations is guilty of a misdemeanor.

This bill would require the supervisor to immediately institute a moratorium on injections of natural gas into any begin insert gas storage end insert wells located within and serving the Aliso Canyon begin insert natural gas end insert storage facility located in the County of Los Angeles until specified conditions are met, including that the integrity of each begin insert gas storage end insert well has been quantitatively and objectively evaluated using state-of-the-art technology, as determined by the supervisor with input from independent experts, and the risks posed by begin insert gas storage end insert well failure have been evaluated. The bill would require the division to hold at least one public meeting concerning the technical methods and equipment to be used to evaluate begin insert gas storage end insert well integrity and the risks posed by begin insert gas storage end insert well failure, request the independent experts to also develop objective criteria to assess the overall risk of the begin insert Aliso Canyon natural gas storage end insert facility, and make that objective criteria available to the public. The bill would also require the supervisor to prohibit the production of natural gas by any begin insert gas storage end insert well originally drilled earlier than 1954 at the Aliso Canyon begin insert natural gas end insert storage facility located in the County of Los Angeles until specified conditions are met, except as specified. Because a violation of these requirements would be a crime, the bill would impose a state-mandated local program. begin insert The bill would repeal these provisions on January 1, 2021. end insert

(2) Under existing law, the Public Utilities Commission is authorized to supervise and regulate every public utility in the state.

This bill would require the begin delete commission end delete begin insert commission, no later than July 1, 2017, end insert to determine the feasibility of minimizing or eliminating use of the Aliso Canyon natural gas storage facility located in the County of Los Angeles while still maintaining energy reliability for the region, and to consult with specified entities in making its determination.

(3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

(4) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 3217 is added to the Public Resources
Code, to read:

3217.  

(a) The supervisor shall immediately institute a
moratorium on injections of natural gas into any begin insert gas storage end insert wells
located within and serving the Aliso Canyon begin insert natural gas end insert storage
facility located in the County of Los Angeles until all of the
following conditions are met:

(1) The integrity of each begin insert gas storage end insert well has been quantitatively
and objectively evaluated using state-of-the-art technology, as
determined by the supervisor with input from independent experts,
and the risks posed by begin insert gas storage end insert well failure have been evaluated.

(A) The age, history, and condition of each begin insert gas storage end insert well
shall be specifically addressed, with particular emphasis on begin insert gas
storage end insert wells drilled prior to 2006.

(B) The technical methods and equipment used to evaluate begin insert gas
storage end insert well integrity and the risks posed by begin insert gas storage end insert well
failure shall be determined by the supervisor with input from
independent experts and the public.

(C) The division shall hold at least one public meeting
concerning the technical methods and equipment. The division
shall request the independent experts to also develop objective
criteria to assess the overall risk of the begin insert Aliso Canyon natural gas
storage end insert facility. The division shall make the objective criteria
available to the public.

(2) Any begin insert gas storage end insert well posing an enhanced risk of failure has
been repaired to mitigate the enhanced risk or plugged and
abandoned.

(3) The supervisor determines that the overall risk from begin insert gas
storage end insert well failure satisfies the supervisor’s duty pursuant to
Section 3106 to prevent damage to life, health, property, and
natural begin delete resources end delete begin insert resources, end insert and other begin delete requirements. end delete begin insert requirements,
as specified in Section 3106. end insert

(4) The Public Utilities Commission and the State Energy
Resources Conservation and Development Commission concur
with the supervisor’s determination in paragraph (3).

(b) The supervisor shall prohibit the production of natural gas
by any begin insert gas storage end insert well originally drilled earlier than 1954 at the
Aliso Canyon begin insert natural gas end insert storage facility located in the County
of Los Angeles until after the integrity of and the risks associated
with any of these begin insert gas storage end insert wells have been evaluated and
determinations by the supervisor, with the concurrence of the
commissions, have been made pursuant to the process described
in subdivision (a), except when necessary to do either of the
following:

(1) Respond to the uncontrolled leak of natural gas from the
“Standard Sesnon 25” well (American Petroleum Institute
identification number 03700776).

(2) Maintain regional energy reliability, at the written direction
of the commissions.

begin insert

(c) This section shall remain in effect only until January 1, 2021,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2021, deletes or extends that date.

end insert

SEC. 2.  

Section 713 is added to the Public Utilities Code, to
read:

713.  

The begin delete commission end delete begin insert commission, no later than July 1, 2017, end insert
shall determine the feasibility of minimizing or eliminating use of
the Aliso Canyon natural gas storage facility located in the County
of Los Angeles while still maintaining energy reliability for the
region. The commission shall consult with the State Energy
Resources Conservation and Development Commission, the
Independent System Operator, begin insert the local publicly owned utilities
that rely on natural gas for electricity generation, end insert the Division of
Oil, Gas, and Geothermal Resources in the Department of
Conservation, and other relevant government entities, in making
its determination.

SEC. 3.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

SEC. 4.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to mitigate, at the earliest possible time, ongoing harm
from the gas leak at the Aliso Canyon begin insert nat end insert begin insert ural gas end insert storage facility,
and to evaluate the integrity of and the risks associated with older
begin insert gas storage end insert wells at that facility, it is necessary that this act take
effect immediately.