BILL ANALYSIS Ó
SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
Senator Fran Pavley, Chair
2015 - 2016 Regular
Bill No: SB 454 Hearing Date: April 28,
2015
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|Author: |Allen | | |
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|Version: |April 21, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Katharine Moore |
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Subject: Water quality: oil and gas: exempt aquifer
BACKGROUND AND EXISTING LAW
1.The state's oil and gas regulator is the Division of Oil, Gas
and Geothermal Resources (division), located in the Department
of Conservation.
2.The State Water Resources Control Board (board) has statutory
responsibility to protect the waters of the state and to
preserve all present and anticipated beneficial uses of those
waters under the state's Porter-Cologne Water Quality Act
(Water Code (WAT) §§13000 et seq.) and other law.
3.The federal Safe Drinking Water Act (SDWA) was enacted in 1974
to protect public health by regulating the nation's public
drinking water and its sources. The US Environmental
Protection Agency (US EPA) developed the Underground Injection
Control (UIC) Program following passage of the SDWA in order
to protect aquifers that were or could become sources of
drinking water from contamination.
4.In 1981, the division applied to the US EPA to become the
primary enforcing agency for the oil and gas well ("Class II")
portion of the UIC program in California. California law
requires that the division be the state entity to seek primacy
for that well class (WAT §13263.5). As part of the
application, the division asked to exempt certain aquifers
from protection under the SDWA. These "exempt aquifers" were
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not or could not become sources of drinking water, as defined
(see 40 Code of Federal Regulations (CFR) §146.4, described
below). Most of these aquifers were either
hydrocarbon-producing, co-located with an existing oil and gas
field, or were already being used for oil and gas wastewater
injection.
5.Class II injection wells primarily consist of oil and gas
waste disposal wells and injection wells used for "enhanced
oil recovery" operations. For the latter, typically fluids of
various forms are pumped into an oil-bearing formation in
order to help produce the oil.
6.In 1982, the US EPA signed a Memorandum of Agreement (MOA)
with the Department of Conservation establishing the
division's primacy for the UIC program and, among other
things, providing certain aquifers with exempt status. Under
this MOA, the US EPA must approve any additional requests for
aquifer exemption status, no injection is allowed into an
aquifer without first obtaining exempt status (if needed),
and, by mutual agreement between the division and the US EPA,
the exempt status for an aquifer may be withdrawn at any time.
7.In the primacy agreement, the division pledged to work closely
with the board. A 1988 MOA between the division and the board
still in effect today requires the division to share
information with the appropriate regional water quality
control board (regional board) about proposed UIC applications
and provides an opportunity for the regional board to comment.
Additionally, the division agrees not to issue final
approvals until regional board concerns are satisfied.
8.In 2011, a US EPA contractor reported the results of an audit
of the division's implementation of the UIC program and found
numerous significant problems. Although not a public part of
the review, documents released recently show that questions
arose during this time period about aquifer exemptions.
9.In the last 10 months there have been a series of revelations
showing, at best, questionable and lax management of the UIC
program by the division, particularly with respect to aquifer
exemptions. Division staff disregarded the division's own
agreements, guidelines and regulations and regularly approved
Class II wells that injected into aquifers that required
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exemption to be used or where the aquifer's water quality was
unknown. Some of these "non-exempt aquifers" contain or may
contain good quality water. It was further revealed that two
primacy agreements were in existence - one excluding 11 good
water quality aquifers from exemption and the other approving
their exemption. These 11 aquifers are now considered to have
"questionable" exemption. (See the March 10, 2015 joint
oversight hearing on the UIC program convened by this
committee and the Senate Committee on Environmental Quality
and the California Environmental Protection Agency (CalEPA)
memo on the UIC program dated March 2, 2015 for more
information.)
10. As of today, 23 injection
wells have now been shut-in, and over 2,500 injection wells in
the state continue to inject into non-exempt or "questionably"
exempt aquifers. About 2,000 of these wells are injection
wells used for enhanced oil recovery operations in existing
oil and gas fields. The remaining 500 are waste disposal
wells. The board and the division are working closely
together to review these injection wells. To date, no
contamination of water used for domestic or irrigation
purposes has been found, although the review continues. Oil
and gas injection wells that pose the highest risk to wells
supplying possible drinking or irrigation water are being
reviewed first.
11. After a series of letter
exchanges between the board, the division and the US EPA, a
schedule for bringing all 2,500 wells into compliance has been
established. Exempt aquifer status will either be obtained
for a well's injection zone by a date certain in the future,
or the well will be "shut-in" (i.e. shut down). For currently
non-exempt aquifers, the schedule is as follows:
by October 15, 2015 - the status of
non-hydrocarbon-bearing aquifers that contains less than
3,000 milligrams per liter of total dissolved solids
(TDS) must be resolved,
by December 31, 2016 - the status of "questionably"
exempt aquifers shall be resolved, as specified, and
by February 15, 2017 - the status of
non-hydrocarbon-bearing aquifers containing from 3,000 to
10,000 milligrams per liter TDS and the status of
hydrocarbon-bearing aquifers that contain less than
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10,000 milligrams per liter TDS must both be resolved.
1.This schedule was recently the subject of emergency
regulations proposed by the division (case: 2015-0409-02E).
2.The criteria for aquifer exemption for Class II wells (40 CFR
§146.4) are as follows:
the aquifer is not a source of drinking water,
the aquifer cannot and will not become a source of
drinking water because it is economically and
technologically infeasible, as defined; located over a
mining area; mineral- or hydrocarbon-bearing in commercial
quantities or mineral, hydrocarbon or geothermal energy
producing, and
the total dissolved salts concentration is between 3,000
and 10,000 milligrams per liter TDS.
PROPOSED LAW
This bill would require the division and the board to concur on
aquifer exemptions submitted to the US EPA for approval, as
specified.
For hydrocarbon-bearing aquifers:
the intended injection zone must be isolated from other zones
containing waters that may have a beneficial use, and
the board must find either that the water in the injection
zone has no potential beneficial use or, if it does, that the
injection will not impact that use.
For non-hydrocarbon-bearing aquifers:
the intended injection zone must be isolated from other zones
containing water that may have a beneficial use,
the aquifer is not a source of drinking water,
the aquifer cannot and will not become a source of drinking
water due to proximity to a mining area, economic or
technological impracticality, mineral concentration or
geothermal energy production capability,
the TDS concentration in the aquifer must exceed 3,000
milligrams per liter, and
the board determines that the injection would not contaminate
a source of water that does or may have a future beneficial
use, or, if the water is already contaminated, that the
injection would not further impair its limited or potentially
limited beneficial use.
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ARGUMENTS IN SUPPORT
According to the author, the division "has allowed more than
2,500 waste water disposal and injections wells to be drilled
into aquifers that have not been exempted from the Safe Drinking
Water Act and therefore should have been protected. The fluids
being injected into these aquifers contain a toxic cocktail of
chemicals, many of which are known to cause cancer and other
human health problems, including benzene, arsenic and
radioactive material."
"It is clear that going forward, given California's long-term
water challenges, the state will need to access deeper aquifers
and adopt technology necessary to clean aquifers currently
considered polluted. Given the current water crisis, it is
irresponsible and shortsighted to not protect these aquifers."
"SB 454 puts specific criteria in place to guide [the division]
in determining which of California's protected aquifers should
be eligible for consideration for an exemption. The criteria
require [the division] to work jointly with the [board]."
ARGUMENTS IN OPPOSITION
According to the California Independent Petroleum Association
(CIPA), "SB 454 would re-define critical components of the UIC
program and the aquifer exemption definition and application
process. These proposed modifications to the UIC program would
compromise California's oil production without providing any
additional environmental and groundwater protections beyond
those provided by the enhancements to the UIC program proposed
to US EPA by the [board] and the [division]."
"SB 454 instead alters the aquifer exemption process so as to
exclude certain aquifers that would otherwise be exempt under
the long-standing federal criterion (sic) [?] For example, SB
454 would prohibit all injection into non-hydrocarbon-bearing
zones where the total dissolved solids content of the water in
the aquifer is less than 3,000 milligrams per liter." CIPA
notes that aquifers with these low salt concentrations may be
considered for exemption if it is economically or
technologically impractical for them to be used as drinking
water.
CIPA further states that "injection wells have been an integral
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part of California's oil and gas operations for over 50 years"
and roughly 70% of California's oil production depends upon
enhanced oil recovery using injections wells. "Without
sufficient injection well options, oil wells cannot produce and
oil production in California will be adversely affected."
COMMENTS
This bill is double-referred to the Senate Committee on
Environmental Quality . Aspects of this bill under that
committee's jurisdiction include water quality and the role of
the board and regional boards. Should this bill pass this
committee, those issues will be addressed there. (Information
on water quality is provided in this analysis for completeness
and context.)
Concurrence between the division and the board is appropriate
for aquifer exemptions. The division and the board appear to be
closely working together to resolve the problems with aquifer
exemptions and on other oil and gas field-related groundwater
quality issues for at least the last year. In the 1988 MOA, the
board clearly retains authority over water quality and at least
one of the three post-primacy aquifer exemption petitions by the
division to the US EPA reflected board input. However, it is
not clear that historically the two agencies have consistently
worked closely together on water quality issues relevant to the
state's oil and gas fields or that division decisions that
impacted or could have potentially impacted water quality were
consistently vetted by the board. In fact the CalEPA memo notes
that under the 1988 MOA the regional boards "generally deferred
to [the division's] determination of whether or not an aquifer
was exempt without scrutinizing the applications." The added
weight of statutory concurrence may help to ensure continuing
cooperation.
The bill's potential impact on the resolution of the 2,500
wells . This bill would impact the resolution of the 2,500 wells
if the division would otherwise ask the US EPA for an aquifer
exemption for certain non-hydrocarbon-bearing aquifers with low
saline concentrations (less than 3,000 milligrams per liter TDS)
on or after January 1, 2016. According to the CalEPA memo noted
above, approximately 140 active wastewater disposal wells inject
into aquifers with TDS concentrations of less than 3,000
milligrams per liter. The 11 aquifers of questionable exemption
also all have TDS concentrations of less than 3,000 milligrams
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per liter.
Not all aquifers need aquifer exemptions . Groundwater that does
not meet the criteria of an Underground Source of Drinking Water
(see 40 CFR §144.3) may be injected into by a Class II UIC well
without obtaining an aquifer exemption. For example, an aquifer
with a TDS concentration of 30,000 milligrams per liter would
not need to be exempted. It is worth noting, however, that a
recent US Geological Survey white paper reported that
municipalities and water districts have started to consider
treating water saltier than 10,000 milligrams per liter in order
to produce water suitable for domestic purposes.
"Beneficial use" is broader than "domestic or irrigation
purposes." The "beneficial use" criterion is a more expansive
designation than the protection of water suitable for domestic
or irrigation purposes (see, for example, Public Resources Code
§3106) that the division is otherwise directed to protect.
Pending budget actions . The board has asked for increased
ongoing funding and personnel to address the UIC program,
aquifer exemptions and other water-related oil and gas
wastewater disposal issues. The division has also asked for
increased funding.
Recent related legislation.
SB 248 (Pavley, 2015) This bill would reform the division's well
history reporting and the regulations governing its UIC program
(before the Senate Committee on Appropriations).
SB 545 (Jackson, 2015) This bill would revise and update
division's authority and permitting practices, and reform the
handling of confidential wells (before the Senate Committee on
Environmental Quality).
AB 356 (Williams, 2015) This bill would provide for reform of
the UIC program with an emphasis on the role of the Water Boards
and require groundwater monitoring in the vicinity of UIC wells
(before the Assembly Natural Resources Committee)
SUPPORT
Ballona Network
California League of Conservation Voters
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Center for Environmental Health
Clean Water Action
Environmental Working Group
Los Padres Forest Watch
San Diego 350
OPPOSITION
California Independent Petroleum Association
Independent Oil Producers' Agency
Western States Petroleum Association
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