BILL ANALYSIS Ó
SB 380
Page 1
SENATE THIRD READING
SB
380 (Pavley)
As Amended April 19, 2016
2/3 vote. Urgency
SENATE VOTE: 40-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |13-0 |Gatto, Achadjian, | |
| | |Bonilla, Burke, | |
| | |Dahle, Eggman, | |
| | |Hadley, Roger | |
| | |Hernández, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Ting, Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |15-0 |Gonzalez, Bloom, | |
| | |Bonilla, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Weber, Wood | |
SB 380
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| | | | |
| | | | |
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SUMMARY: Continues the moratorium on injecting natural gas into
the Aliso Canyon gas storage facility, requires the Department
of Conservation's Division of Oil, Gas and Geothermal Resources
(DOGGR) to complete a gas storage well comprehensive safety
review (safety review), and requires the California Public
Utilities Commission (CPUC) to determine the feasibility of
minimizing or eliminating use of the facility, as specified.
This bill, in part, codifies administrative actions ordered by
the Governor in his January 6, 2019, Proclamation of a State
Emergency. Specifically, this bill:
1)Requires the DOGGR Supervisor (Supervisor) to continue
prohibiting the Southern California Gas Company (SoCalGas)
from injecting gas into the Aliso Canyon Storage Facility
until the safety review is completed and the Supervisor makes
a variety of determinations, as specified.
2)Prohibits the Supervisor from lifting the prohibition on
injection until the CPUC has concurred with the determination
of safety via letter.
3)Requires the Supervisor to determine the criteria and
methodology for the safety review, as specified. Requires
DOGGR to hold a noticed public hearing in the community on the
safety review findings, as well as the proposed pressure
limits prior to commencing operations at the facility.
4)Establishes required steps, as specified, for the safety
review to ensure external and internal well mechanical
integrity.
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5)Provides the safety review is not complete until all wells are
categorized and the appropriate action is taken as follows:
a) gas storage wells have completed testing and remediation;
b) gas storage wells have been temporarily abandoned and
isolated from the reservoir; or c) gas storage wells have been
fully plugged and abandoned, as specified.
6)Requires the operator of the facility to propose maximum
reservoir pressure limits and associated data to DOGGR before
commencing operations. Requires the Supervisor to review and
approve the maximum reservoir pressure limit, as specified.
7)Requires any wells returning to service to inject or produce
gas only through interior metal tubing, and expressly
prohibits injection or production through the annulus (space)
between the tubing and the well casing. Requires wells
returning to service to conduct ongoing pressure monitoring
and comply with any other requirements specified by the
Supervisor.
8)Requires plugged and abandoned wells to be periodically
inspected, as specified.
9)Prior to the completion of the safety review, limits the
production of natural gas to wells that have completed testing
and remediation unless insufficient production capacity is
available, as specified.
10)Requires DOGGR to post all testing, safety review, and
compliance status and remediation requirements on its Web site
in a timely manner.
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11)Requires the CPUC, no later than July 1, 2017, to open a
proceeding to determine the feasibility of diminishing or
eliminating the use of the Aliso Canyon natural gas storage
facility while maintaining energy reliability in the region.
Requires the CPUC to consult with the California Energy
Commission (CEC), Independent System Operator (ISO), locally
public owned utilities, DOGGR, affected balancing authorities,
and other relevant government entities prior to making its
determination.
12)Requires the CPUC to publish a report within 30 days of
enactment of this bill regarding gas production at the
facility. Requires the CPUC to seek public comments and
publish the report on its Internet Web site.
13)Requires the CPUC Executive Director to direct the operations
of the facility, as specified, to ensure reliability and just
and reasonable rates.
14)Sunsets the provisions of this bill on January 1, 2021.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)Increased costs for the CPUC of approximately $1.7 million to
determine the feasibility of a full or partial closure of the
facility through a proceeding (Public Utilities Commission
Utilities Reimbursement Account.)
2)To the extent this bill requires DOGGR to repeat steps already
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taken, increased costs of $250,000 or more (Oil, Gas, and
Geothermal Administrative Fund).
3)Potential unknown increased costs for CEC and ISO to consult
with DOGGR and the CPUC as specified (special fund).
COMMENTS:
1)Purpose: According to the author, the leak of natural gas
from the Aliso Canyon facility posed a public health and
climate emergency. This bill builds upon and codifies
portions of the Governor's State of Emergency declaration and
proposed emergency regulations and DOGGR orders.
2)Aliso Canyon Gas Leak: The Aliso Canyon Gas Storage Facility
is owned by SoCalGas and is located in Los Angeles County just
north of Porter Ranch. SoCalGas is a gas corporation
regulated by the CPUC.
On October 23, 2015, SoCalGas detected a methane gas leak at
its Aliso Canyon Gas Storage Facility at Well # SS-25.
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.
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The leak displaced nearly 2,290 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.
3)Chronology of Events and State Response: Following the
detection of the leak, in November and December 2015, DOGGR
and the CPUC issued orders establishing a moratorium on
natural gas injection at Aliso Canyon. The orders included
requirements to provide data, retain evidence, and track the
costs of the effort to plug the well. Additionally, the Air
Resources Board (ARB) began collecting and publishing data on
methane emissions caused by the leak.
On January 6, 2016, the Governor issued a Proclamation
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.
On February 11, 2016, SoCalGas announced it had temporarily
controlled the flow of natural gas at the leaking well and
would continue to work in coordination with DOGGR and other
agencies during the process of permanently sealing the well.
On February 18, 2016, DOGGR confirmed the leaking well was
permanently sealed and taken out of service. On March 4,
2016, DOGGR issued an order to SoCalGas to follow a
comprehensive safety review, upgrade equipment and detection
devices, and plug and abandon wells as specified. This order
prohibits the Supervisor from lifting the injection
prohibition until all specified requirements have been met.
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On March 28, 2016, the CPUC, DOGGR, ARB, and CEC issued an
update on the status of state actions taken in response to the
gas leak.
4)Governor's Emergency Proclamation and Budget Proposals: In
addition to the provisions in this bill, the Governor's
Proclamation required DOGGR to issue emergency regulations and
require all gas storage facilities in the state to undertake
specific actions to protect against uncontrolled has leaks.
Additionally, the Proclamation: a) requires ARB to expand its
monitoring of emissions in the community; b) requires the
Office of Environmental Health Hazzard Assessment to review
health concerns and determine if additional measures are
necessary; and c) requires the CPUC and CEC, in coordination
with the ISO, to take all steps necessary to ensure energy
reliability during the moratorium.
Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0002760