BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                                     SB 380


                                                                     Page A


          Date of Hearing:  February 22, 2016


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                  Mike Gatto, Chair


          SB  
          380 (Pavley) - As Amended February 16, 2016


          SENATE VOTE:  40-0


          SUBJECT:  Natural gas storage: moratorium


          SUMMARY:  Places a moratorium on injecting natural gas into the  
          Aliso Canyon gas storage facility and establishes requirements  
          for resuming natural gas injections at the Aliso Canyon gas  
          storage facility, as specified.  Specifically, this bill: 


          1)Codifies a moratorium on injections of natural gas into any  
            well at the Aliso Canyon storage facility until each well has  
            been tested and evaluated for integrity and risks posed by  
            well failure with particular emphasis on wells drilled prior  
            to 2006. 


          2)Specifies the moratorium shall continue until each Aliso  
            Canyon well has been evaluated using state-of-the-art  
            technology as determined by the Department of Conservation's  
            Division of Oil, Gas, and Geothermal Resources (DOGGR) with  
            input from independent experts.













                                                                     SB 380


                                                                     Page B


          3)Requires at least one public meeting and that DOGGR shall  
            request that the independent experts develop objective  
            criteria for assessing the overall risk of the facility that  
            DOGGR can then make public.


          4)Specifies that any well posing an enhanced risk of failure is  
            to be repaired or plugged and abandoned.


          5)Specifies that the Supervisor of DOGGR is to determine the  
            overall risk from well failure satisfies the supervisor's duty  
            to prevent damage to life, health, property, and natural  
            resources and other requirements; and requires the California  
            Public Utilities Commission (CPUC) and the California Energy  
            Commission (CEC) concur with the supervisor's determination.


          6)Allows production of natural gas by any well drilled earlier  
            than 1954 at the Aliso Canyon storage facility when necessary  
            to either respond to the uncontrolled leak of natural gas from  
            the "Standard Sesnon 25" well or maintain regional energy  
            reliability, at the written direction of the commissions.


          7)Requires the CPUC, in consultation with the CEC, DOGGR, and  
            the California Independent System Operators (Cal ISO), to  
            determine the feasibility of minimizing or eliminating use of  
            the Aliso Canyon natural gas storage facility while still  
            maintaining energy reliability for the region. 


          8)Includes an urgency clause for the statute to take effect  
            immediately in order to mitigate ongoing harm from the gas  
            leak at the Aliso Canyon storage facility and evaluate the  
            integrity and risks associated with older wells at that  
            facility.













                                                                     SB 380


                                                                     Page C


          


          EXISTING LAW:  


          1)Authorizes the CPUC to regulate private corporations that own,  
            operate, control, or manage a line, plant, or system for the  
            transportation or the production, generation, transmission, or  
            furnishing of heat, power, or storage directly or indirectly  
            to or for the public, (California Constitution, Article XII,  
            Section 3)
          2)Authorizes the CPUC to regulate gas corporations, including  
            underground storage. (Public Utilities Code Sections 216(a),  
            221, 222, 227, and 228)


          3)Authorizes the CPUC to require that utility charges are just  
            and reasonable and requires utilities to maintain facilities  
            as necessary to promote safety, health, comfort, and  
            convenience of patrons, employees, and the public. (Public  
            Utilities Code Section 451)


          4)Authorizes the CPUC to do all things, whether specifically  
            designated in this part or in addition thereto, which are  
            necessary and convenient in the exercise of such power and  
            jurisdiction. (Public Utilities Code Section 701)


          5)Establishes that the CPUC is responsible for regulating and  
            enforcing intrastate gas pipeline transportation and pipeline  
            facilities pursuant to Chapter 601 (commencing with Section  
            60101) of Subtitle VIII of Title 49 of the United States Code,  
            including the development, submission, and administration of a  
            state pipeline safety program certification for natural gas  
            pipelines pursuant to Section 60105 of that chapter. (Public  
            Utilities Code Section 955(b))












                                                                     SB 380


                                                                     Page D



          6)Requires gas storage facilities to receive a Certificate of  
            Public Convenience and Necessity (CPCN) before constructing a  
            gas storage facility.  Requires that the CPUC grant a CPCN on  
            the grounds that the present or future public convenience and  
            necessity requires or will require the gas storage facility.  
            (Public Utilities Code Section 1001, et seq.)


          7)Authorizes the CPUC to investigate, as part of the rate  
            proceeding for any gas corporation, impediments to the  
            in-state production and storage of natural gas and encourage  
            in-state production or storage of natural gas unless the CPUC  
            finds it likely that it will result in consequences adverse to  
            the interests of gas customers. (Public Utilities Code Section  
            1001, et seq.)



          1)Directs the Department of Conservation to:





             b)   Supervise the drilling, operation, maintenance, and  
               abandonment of wells and the operation, maintenance, and  
               removal or abandonment of tanks and facilities attendant to  
               oil and gas production so as to prevent, as far as  
               possible, damage to life, health, property, and natural  
               resources; damage to underground oil and gas deposits from  
               infiltrating water and other causes; loss of oil, gas, or  
               reservoir energy, and damage to underground and surface  
               waters suitable for irrigation or domestic purposes by the  
               infiltration of, or the addition of, detrimental  
               substances.














                                                                     SB 380


                                                                     Page E




             c)   Supervise the drilling, operation, maintenance, and  
               abandonment of wells so as to permit the owners or  
               operators of the wells to utilize all methods and practices  
               known to the oil industry for the purpose of increasing the  
               ultimate recovery of underground hydrocarbons and which, in  
               the opinion of the supervisor, are suitable for this  
               purpose in each proposed case. 





             d)   Encourage the wise development of oil and gas resources  
               to best meet oil and gas needs in this state.  (Public  
               Resources Code Section 3106)


          1)Requires the Department of Conservation to maintain  
            surveillance over underground gas storage facilities to insure  
            that the original reserves are not lost, that drilling of new  
            wells is conducted properly, and that no damage occurs to the  
            environment by reason of injection and withdrawal of gas.  
            (Public Resources Code Section 3403.5)  
           FISCAL EFFECT:  Unknown


          COMMENTS:  


           1)Author's Statement  .  "My constituents have been on the  
            receiving end of a natural disaster for the last three plus  
            months.  The uncontrolled leak of natural gas from the Aliso  
            Canyon facility is a public health and climate emergency.















                                                                     SB 380


                                                                     Page F


            "SB 380 builds on the Governor's State of Emergency  
            declaration, [DOGGR] proposed emergency gas storage  
            regulations and statements by the CPUC and the [CEC], among  
            others.  It institutes a public, rigorous and transparent  
            process to ensure the integrity of the gas storage wells.  We  
            have an obligation to the public to ensure that they have a  
            formal voice in this process to ensure its credibility to  
            them."


           2)Background  .  A leak was discovered on October 23, 2015, at a  
            natural gas well located at the Aliso Canyon storage facility,  
            owned and operated by Southern California Gas Company  
            (SoCalGas).  SoCalGas made several unsuccessful well "kill"  
            attempts. On December 4, 2015, SoCalGas began drilling a  
            relief well to intercept and cap the leaking well near the  
            bottom of the well. SoCalGas estimated the well could be  
            capped by March 2016.  Through November and December 2015  
            DOGGR and the CPUC issued orders establish a moratorium on  
            natural gas injection at Aliso Canyon, to provide data, retain  
            evidence, and track costs of the effort to plug the well.  The  
            Air Resources Board began collecting and publishing data on  
            methane emissions caused by the leak.
            On January 6, 2016, the Governor issued a Proclamation<1>  
            directing various state entities to oversee SoCalGas' actions  
            to stop the leak, protect public safety, ensure accountability  
            and strengthen oversight of natural gas storage facilities.   
            Relevant to this bill, portions of the Governor's  
            Proclamation:


             a)   Ordered DOGGR to continue its prohibition against  
               SoCalGas injecting any gas into the Aliso Canyon Storage  
               Facility until a comprehensive review of the safety of the  
               storage wells and the air quality of the surrounding  
             --------------------------
          <1>


            https://www.gov.ca.gov/news.php?id=19264  










                                                                     SB 380


                                                                     Page G


               community utilizing independent experts is completed; and
             b)   Tasked the CEC in coordination with CPUC to maintain  
               energy reliability during this incident.


            On February 11, 2016, SoCalGas announced it had temporarily  
            controlled the flow of natural gas at the leaking well and  
            will continue to work in coordination with DOGGR and other  
            agencies during the process of permanently sealing the well.

           1)Reliability of California's energy system  .  One of the  
            important questions is whether or not the moratorium specified  
            in this bill impacts energy reliability.  According to the CEC  
            and the CPUC in a letter to the Governor on February 1st,  
            "There is good reason to be concerned that reliability of  
            supply may be critical for electric generators in the LA  
            Basin, especially those serving [the Los Angeles Department of  
            Water and Power]."  The CEC and CPUC expect to complete their  
            assessment of reliability for the summer of 2016 by April 1,  
            2016.
            The SoCalGas system consists of a pipeline system (Backbone  
            Transmission System) and storage facilities.  Most of  
            SoCalGas' gas supply (90%) originates outside of California  
            largely from production basins in Texas, New Mexico, and the  
            Rocky Mountains. Gas from these regions is delivered via  
            interstate pipelines into SoCalGas' Backbone Transmission  
            System.  Gas inventory in storage facilities is then used when  
            demand exceeds the flowing supplies provided through the  
            Backbone Transmission System.  In Los Angeles County there are  
            three natural gas storage facilities:


             ------------------------------------------------------------ 
            |Field Name     |Operator | Active |  Working  |  Max Daily  |
            |               |         |  Well  | Capacity  |  Delivery   |
            |               |         | Count  |   (Mcf)   |    (Mcf)    |
            |---------------+---------+--------+-----------+-------------|
            |Playa del Rey  |SoCalGas |   22   |  2,400,000|      480,000|
            |---------------+---------+--------+-----------+-------------|











                                                                     SB 380


                                                                     Page H


            |Aliso Canyon   |SoCalGas |   92   | 86,000,000|    1,860,000|
            |---------------+---------+--------+-----------+-------------|
            |Honor Rancho   |SoCalGas |   32   | 24,200,000|1,000,000    |
             ------------------------------------------------------------ 


            Concerns regarding energy reliability relate to all three of  
            California's major uses for energy:
              a)   Natural Gas  .  Natural gas is used for electric  
               generation, home heating, water heating (residential,  
               commercial), cooking (residential and commercial), and  
               industrial processes. Natural gas supplies are critical for  
               public health and safety. 


               SoCalGas' system-wide demand for gas supplies is highest in  
               the winter-reflecting gas needs for heating buildings, hot  
               water and cooking. 


               To some extent, California's natural gas storage facilities  
               provide some financial benefits to ratepayers in that the  
               presence of the stored gas avoids both real and perceived  
               supply shortages in the event of a disruption of suppliers  
               from non-state sources, which can ameliorate natural gas  
               commodity price spikes.


               It is unclear the extent to which the supply of natural gas  
               via pipelines into the Los Angeles region can meet 100% of  
               demand for natural gas reliably.




               According to the CPUC, to minimize risks of curtailments to  
               residential and small commercial customers and  electric  
               generators and to minimize the possibility of curtailment  
               to core customers, the CPUC ordered SoCalGas not to reduce  











                                                                     SB 380


                                                                     Page I


               inventory levels at Aliso Canyon below 15 Billion cubic  
               feet (Bcf) other than to meet unspecified reliability  
               requirements.





              b)   Electricity  .  Electricity is used by residential,  
               commercial, industrial, and agricultural customers for a  
               variety of uses (for example, lighting, cooling, financial  
               transactions, entertainment, manufacturing, etc.). 


               There are 18 natural gas power plants supplying baseload,  
               peaking, and voltage support into the Los Angeles region.   
               These power plants supply electricity customers of Los  
               Angeles Department of Water and Power (LADWP), Southern  
               California Edison (SCE), and publicly owned utilities  
               serving customers in Long Beach, Glendale, Burbank,  
               Pasadena, Anaheim, and Vernon.  According to their 2014  
               Power Content Labels,<2> approximately one-fourth of the  
               electricity is supplied via natural gas generation (see  
               Table 1).  Other sources of energy include:  wind, solar,  
               geothermal, bioenergy, hydroelectric, nuclear, and coal.   
               It is unclear the extent to which the Los Angeles region  
               can reliably provide electricity 100% of the time if the  
               power plants were to rely solely on natural gas delivered  
               via pipelines into the region.  This information does not  
               include self-generation (roof-top solar, fuel cells, energy  
               storage).


                Table 1: Los Angeles Region Sources of Electricity (%)
                ----------------------------------------------------------- 
               |  Retail  |Anahei|Burban|Glenda|LADWP |Pasade| SCE |Vernon |
               | Supplier |  m   |  k   |  le  |      |  na  |     |       |
                ----------------------------------------------------------- 



          ---------------------------
          <2>  http://www.energy.ca.gov/sb1305/labels/index.html  










                                                                     SB 380


                                                                     Page J


                ------------------------------------------------------------- 
               | Resource | % of electricity generation by type of resource  |
               |   Type   |                                                  |
               |          |                                                  |
                ------------------------------------------------------------- 
               |----------+------+------+------+------+------+-----+-------|
               |Bioenergy |  15  |  16  |  15  |  5   |  19  |  1  |  12   |
               |----------+------+------+------+------+------+-----+-------|
               |Geothermal|  5   |  2   |  4   |  1   |  2   |  9  |   0   |
               |          |      |      |      |      |      |     |       |
               |----------+------+------+------+------+------+-----+-------|
               |  Small   |  1   |  3   |  3   |  1   |  0   |  0  |   0   |
               |  Hydro   |      |      |      |      |      |     |       |
               |----------+------+------+------+------+------+-----+-------|
               |  Solar   |  0   |  2   |  1   |  1   |  0   |  4  |   0   |
               |----------+------+------+------+------+------+-----+-------|
               |   Wind   |  7   |  5   |  24  |  12  |  7   | 10  |   7   |
               |----------+------+------+------+------+------+-----+-------|
               | Subtotal |  28  |  28  |  46  |  20  |  28  | 20  |  19   |
               |Renewable |      |      |      |      |      |     |       |
               |----------+------+------+------+------+------+-----+-------|
               |   Coal   |  41  |  37  |  10  |  40  |  48  |  0  |   0   |
               |----------+------+------+------+------+------+-----+-------|
               |  Large   |  2   |  2   |  6   |  2   |  4   |  3  |   2   |
               |  Hydro   |      |      |      |      |      |     |       |
               |----------+------+------+------+------+------+-----+-------|
               | Natural  |  24  |  25  |  31  |  22  |  8   | 27  |  59   |
               |   Gas    |      |      |      |      |      |     |       |
               |----------+------+------+------+------+------+-----+-------|
               | Nuclear  |  0   |  6   |  8   |  9   |  7   |  6  |   7   |
                ----------------------------------------------------------- 
               |  Other   |  0   |  2   |  0   |  0   |  0   |  0  |   0   |
               |----------+------+------+------+------+------+-----+-------|
               |Unspecifie|  7   |  0   |  0   |  7   |  5   | 40  |13     |
               |d Sources |      |      |      |      |      |     |       |
               | of Power |      |      |      |      |      |     |       |
                ----------------------------------------------------------- 
               












                                                                     SB 380


                                                                     Page K



               According to the CPUC, Aliso Canyon is an integral part of  
               the SoCalGas system and is essential for meeting demand in  
               the Los Angeles Basin. The CPUC also states that limited  
               use or loss of Aliso's storage capacity under normal  
               conditions can be supplemented in the short term using  
               increased flowing supply and, to a limited extent, the  
               Honor Rancho storage facility. The CPUC adds that Aliso  
               Canyon storage is the only source available to meet the gas  
               supply needed for gas-fired electric generators in Los  
               Angeles Basin during summer hot days when electric demand  
               increases to meet cooling needs (air conditioning, etc.).  




               The CPUC states that analysis of the full impact on the  
               electric system, if storage from Aliso Canyon is not  
               available, is ongoing.  However, they state that initial  
               studies indicate that even with 15 Bcf in storage now, as  
               the 15 Bcf is drawn down over the course of the summer, it  
               will be increasingly difficult for SoCalGas to respond to  
               increases in electric generation demand and therefore  
               likely that electric generation in the Los Angeles Basin  
               that relies on gas from Aliso Canyon will be curtailed.




              c)   Petroleum Fuels  .  The Tesoro Refinery located near the  
               Los Angeles Harbor is the largest refinery in Los Angeles  
               County. The facility is capable of providing approximately  
               35% of the California's unique gasoline blend sold in the  
               Los Angeles basin, 40% of the jet fuel for Los Angeles  
               International Airport (LAX) and two million gallons per day  
               of ultra-low sulfur diesel.  Tesoro is also the majority  
               owner of the Watson gas-fired cogeneration facility, which  
               provides electricity to the Tesoro-Carson refinery.  The  
               Watson facility exports power to SCE customers through a  











                                                                     SB 380


                                                                     Page L


               power purchase agreement with SCE.  Other larger refineries  
               in the region include Chevron and ExxonMobil.


               For the most part, these refineries purchase their natural  
               gas needs directly from gas suppliers and take delivery of  
               their gas via the SoCalGas Backbone Transmission System.


               If these refineries were ordered to curtail their gas use  
               in the event of peak demand for natural gas at the local  
               power plants, there could be problems with maintaining  
               sufficient inventories of petroleum fuels in the region  
               (gasoline, diesel, aircraft fuels).  Historically, fuel  
               shortages have led to retail fuel price spikes.


               It is unclear whether this bill's moratorium would impact  
               the reliability of transportation fuel supplies provided by  
               refineries located in the region or whether this concern is  
               to be addressed by the analysis that the CPUC and CEC will  
               make available in April 2016.


           2)Other similar gas storage facilities  .  This bill addresses  
            operation of wells located in Aliso Canyon.  However, there  
            are six operators of 12 storage facilities in California with  
            343 active wells.  Those other storage facilities are located  
            in the following counties:  Santa Barbara, Madera, Butte,  
            Colusa, Contra Costa, San Joaquin, Solano, and Yolo.  The  
            Governor's proclamation addresses all storage facilities in  
            California and specifically requires DOGGR to promulgate  
            emergency regulations for gas storage facility operators  
            throughout the state, requiring:  at least daily inspection of  
            gas storage well heads using gas leak detection technology  
            such as infrared imaging; ongoing verification of the  
            mechanical integrity of all gas storage wells; ongoing  
            measurement of annular gas pressure or annular gas flow within  
            wells; regular testing of all safety valves used in wells;  











                                                                     SB 380


                                                                     Page M


            minimum and maximum pressure limits for each gas storage  
            facility in the state; a comprehensive risk management plan  
            for each facility that evaluates and prepares for risks,  
            including corrosion potential of pipes and equipment. 


            At Aliso Canyon there are 39 pre-1954 wells and 98 pre-2006  
            wells (including the pre-1954 wells.  Honor Rancho has no  
                     pre-1954 wells and 41 pre-2006 wells.  La Goleta has 13  
            pre-1954 wells and 20 pre-2006 wells (including the pre-1954  
            wells).  Playa del Rey has 41 pre-1954 wells and 51 pre-2006  
            wells (including the pre-1954 wells).


            Data on the age of wells at other natural gas storage  
            facilities in California was not available.


            The Governor's proclamation orders DOGGR, the CPUC, California  
            Air Resources Board (CARB), and the CEC to submit to the  
            Governor's Office a report that assesses the long-term  
            viability of natural gas storage facilities in California.  
            This bill does not include this provision.


           3)Two Moratoria - Similar but different  .  If enacted, this bill  
            would codify a portion of the Governor's proclamation.  The  
            relevant portions of the Governor's proclamation are:


                Protecting Public Health and Safety: The state will:  
                continue its prohibition against [SoCalGas] injecting  
                any gas into the Aliso Canyon Storage Facility until  
                a comprehensive review of the safety of the storage  
                wells and the air quality of the surrounding  
                community utilizing independent experts is completed;  
                expand its real-time monitoring of emissions in the  
                community; convene an independent panel of scientific  
                and medical experts to review public health concerns;  











                                                                     SB 380


                                                                     Page N


                and take all actions necessary to ensure the  
                continued reliability of natural gas and electricity  
                supplies in the coming months.


                Strengthening Oversight: The state will promulgate  
                emergency regulations for gas storage facility  
                operators throughout the state, requiring: at least  
                daily inspection of gas storage well heads using gas  
                leak detection technology such as infrared imaging;  
                ongoing verification of the mechanical integrity of  
                all gas storage wells; ongoing measurement of annular  
                gas pressure or annular gas flow within wells;  
                regular testing of all safety valves used in wells;  
                minimum and maximum pressure limits for each gas  
                storage facility in the state; a comprehensive risk  
                management plan for each facility that evaluates and  
                prepares for risks, including corrosion potential of  
                pipes and equipment. Additionally, [DOGGR, CPUC, CARB  
                and CEC] will submit to the Governor's Office a  
                report that assesses the long-term viability of  
                natural gas storage facilities in California.


            The significant differences between the Governor's moratorium  
            and the moratorium proposed by this bill are as follows.


            The moratorium specified in this bill:


                 Requires DOGGR to specifically address Aliso Canyon  
               wells placed in service prior to 2006. 


                 Specifies that state-of-the-art technology must be used  
               to assess well integrity.













                                                                     SB 380


                                                                     Page O


                 Specifies that the DOGGR supervisor's duty includes  
               "other requirements." 


                 Requires the DOGGR supervisor to determine that overall  
               risk from well failure is satisfied, with the concurrence  
               of the CEC and CPUC. 


                 Prohibits the production of natural gas by any well  
               drilled earlier than 1954 at the Aliso Canyon storage  
               facility until after the integrity and risks have been  
               evaluated unless the well(s) are needed to maintain  
               regional energy reliability at the written direction of the  
               CEC. 


                 Requires the CPUC to determine the feasibility of  
               minimizing or eliminating use of the Aliso Canyon storage  
               facility in consultation with DOGGR, CARB, the Cal ISO, and  
               the CEC.


            The moratorium specified in the Governor's proclamation:


                 Prohibits gas injection at Aliso Canyon until a  
               comprehensive review of safety and air quality is completed  
               and requires that all actions be taken as are necessary to  
               ensure continued reliability of natural gas and electricity  
               supplies. 


                 Requires actions to be taken by DOGGR to ensure safety  
               at all natural gas storage facilities and requires a  
               multi-agency assessment of the long-term viability of  
               natural gas storage facilities in California.













                                                                     SB 380


                                                                     Page P


                 Requires convening of an independent panel of scientific  
               and medical experts to review public health concerns; and  
               take all actions necessary to ensure the continued  
               reliability of natural gas and electricity supplies in the  
               coming months.


            It is unclear whether having moratorium provisions in statute  
            would enhance, inhibit, or present difficulties in  
            implementing the Aliso Canyon activities underway as a result  
            of the Governor's proclamation. While the Governor is able to  
            take administrative actions in a relatively short amount of  
            time, statutes are generally modified no more frequently than  
            annually.  


            If this bill included a sunset date on the provisions  
            applicable to DOGGR it would ensure that the Legislature  
            revisits the statute to verify that the work specified by this  
            bill is actually completed.  Further, this bill requires a  
            multiagency assessment, led by the CPUC, of the feasibility of  
            minimizing or eliminating the use of Aliso Canyon's natural  
            gas storage facility. The author may wish to consider a date  
            by which this assessment is to be completed and require the  
            CPUC to also consult with local publicly owned utilities in  
            preparing this assessment.


           1)Support and Opposition  .  Supporters of this bill raise  
            concerns regarding health and safety, climate change, and  
            maintenance practices at the facility (with some supporters  
            emphasizing concerns regarding aging infrastructure).  In  
            particular, local community supporters raise concerns about  
            providing a safe environment for public education, worker  
            compensation claims, and the safety of children and families.


            Opponents raise concerns, while also expressing support for  
            safety and inspection requirements, regarding electric  











                                                                     SB 380


                                                                     Page Q


            reliability, adverse impact on the economy (some raise concern  
            that the exception for energy reliability is vague and does  
            not define the term or provide an exception to maintain gas  
            production at Aliso Canyon in the event of near term natural  
            gas needs).  They express concern that this bill will disrupt  
            business operations, negatively impact the local economy, and  
            predict service outages and blackouts that are harmful to  
            consumers and businesses. 










































                                                                     SB 380


                                                                     Page R



           2)Recommended amendments  .


            The author may wish to consider the following amendments to  
            this bill:


                 Clarify that Public Resources Code Section 3217 applies  
               specifically to gas storage wells.


                 Clarify that Public Resources Code Section 3217(a)(3)  
               "and other requirements" refers to those requirements in  
               Public Resources Code Section 3106.


                 Include a sunset date (January 1, 2021) to ensure that  
               the Legislature will have an opportunity to verify that the  
               state agencies have completed the tasks specified in  
               Section 3217.


                 Specify a date by which the CPUC is to complete its  
               assessment of need for the Aliso Canyon natural gas storage  
               facility (July 1, 2017) and include local publicly owned  
               utilities among the entities the CPUC is required to  
               consult with on this assessment.


            The specific amendments are 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  gas storage   
            wells located within and serving the Aliso Canyon storage  
            facility located in the County of Los Angeles until all of the  











                                                                     SB 380


                                                                     Page S


            following conditions are met:
            (1) The integrity of each  gas storage  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  
             gas storage  well failure have been evaluated.
            (A) The age, history, and condition of each  gas storage  well  
            shall be specifically addressed, with particular emphasis on  
             gas storage  wells drilled prior to 2006.
            (B) The technical methods and equipment used to evaluate  gas  
            storage  well integrity and the risks posed by  gas storage  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  Aliso  
            Canyon natural gas storage  facility. The division shall make  
            the objective criteria available to the public.
            (2) Any 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  gas  
            storage  well failure satisfies the supervisor's duty pursuant  
            to Section 3106 to prevent damage to life, health, property,  
            and natural resources  ,  and other requirements  , as specified in  
            Section 3106.  
            (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  gas storage well originally drilled earlier than  
            1954 at the Aliso Canyon storage facility located in the  
            County of Los Angeles until after the integrity of and the  
            risks associated with any of these  gas storage  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:











                                                                     SB 380


                                                                     Page T


            (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.
             (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.
             SEC. 2.  Section 713 is added to the Public Utilities Code, to  
            read:
            713.  The commission,  no later than July 1, 2017,  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,  the local  
            publicly owned utilities that rely on natural gas for  
            electricity generation,  the Division of Oil, Gas, and  
            Geothermal Resources in the Department of Conservation, and  
            other relevant government entities, in making its  
            determination.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Lieu, Ted, Member of the United State House of Representatives
          Schmerelson, Scott, Member of the Los Angeles Unified School  
          District Board of Education
          AZUL
          Asian Pacific Environmental Network
          California League of Conservation Voters











                                                                     SB 380


                                                                     Page U


          California Public Interest Research Group (CALPIRG)
          Center on Race, Poverty & the Enviroment
          Clean Water Action
          Climate Action Campaign
          Dignity Health
          Environment California
          Environmental Defense Fund
          Environmental Working Group
          Friends Committee on Legislation in California
          Los Angeles, City of
          Los Angeles, County of
          National Parks Conservation Association
          People Demanding Action
          Porter Ranch Neighborhood Council
          Santa Susana Mountain Park Association
          Sierra Club California
          Ventura, County of
          Vote for Progress, California Office


          Opposition


          Foster, Bob
          Kelly, James
          Alhambra Chamber of Commerce
          CALASIAN Chamber of Commerce
          California Business Roundtable 
          California League of Food Processors
          California Manufacturers & Technology Association (CMTA)
          California Retailers Association
          Central City Association (CCA)
          Congress of California Seniors
          Command Packaging
          DE Solutions
          Desert Valley Builders Association
          El Monte/South El Monte Chamber of Commerce
          Futureports
          Harris Ranch











                                                                     SB 380


                                                                     Page V


          Industry Manufacturers Council
          Inland Empire Economic Partnership
          Keenan Farms Inc.
          Kern Economic Development Corporation
          Kheir Clinic
          Latino Chamber of Commerce
          Los Angeles Chamber of Commerce
          Los Angeles Latino Chamber of Commerce
          Orange County Business Council
          Pomona Chamber of Commerce
          San Gabriel Economic Partnership
          Southern California Leadership Council
          Sweetener Products Company
          Verdexchange Institute
          Western Milling
          Western States Petroleum Association (WSPA)
          WireTech, Inc.


          Analysis Prepared by:Sue Kateley / U. & C. / (916)  
          319-2083