BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 454|
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THIRD READING
Bill No: SB 454
Author: Allen (D)
Amended: 6/2/15
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE: 7-1, 4/28/15
AYES: Pavley, Allen, Hertzberg, Hueso, Jackson, Monning, Wolk
NOES: Stone
NO VOTE RECORDED: Vidak
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/29/15
AYES: Wieckowski, Hill, Jackson, Leno, Pavley
NOES: Gaines, Bates
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
SENATE FLOOR: 18-17, 6/4/15 (FAIL)
(ROLL CALL NOT AVAILABLE)
SUBJECT: Water quality: oil and gas: exempted aquifer
SOURCE: Author
DIGEST: This bill prohibits the Division of Oil, Gas, and
Geothermal Resources from submitting a proposal for an aquifer
exemption to the US Environmental Protection Agency under the
Underground Injection Control program unless the Division and
the State Water Resources Control Board both make specified
findings.
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ANALYSIS:
Existing law:
1)Provides the state's oil and gas regulator is the Division of
Oil, Gas and Geothermal Resources (division), located in the
Department of Conservation.
2)Provides 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)Provides for the federal Safe Drinking Water Act (SDWA)
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)Specifies if primacy is sought from the US EPA to operate a
UIC program, the division is the state entity that may seek
primacy for oil and gas ("Class II") wells (WAT §13263.5).
Class II injection wells primarily consist of oil and gas
waste disposal wells and injection wells used for "enhanced
oil recovery" operations. If certain criteria are met
(described below) and procedures are followed, SDWA protection
of an aquifer may be lifted so a Class II injection well can
inject into it. These are "exempt aquifers."
This bill requires the division and the board to concur on
aquifer exemptions submitted to the US EPA for approval, and
does not allow non-hydrocarbon bearing aquifers with total
dissolved solids (TDS) concentrations less than 3,000 milligrams
per liter to be proposed for exemption. Specifically, this bill
requires the division and the board to concur on aquifer
exemption proposals as follows:
1)For hydrocarbon-bearing aquifers:
a) the intended injection zone must be hydrogeologically
isolated from other zones containing waters that may have a
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beneficial use, and
b) 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.
2)For non-hydrocarbon-bearing aquifers:
a) the intended injection zone must be hydrogeologically
isolated from other zones containing water that may have a
beneficial use,
b) the aquifer is not a source of drinking water,
c) 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,
d) the TDS concentration in the aquifer must exceed 3,000
milligrams per liter, and
e) 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.
Background
In 1981, the division applied to the US EPA to become the
primary enforcing agency for the Class II UIC program in
California. As part of the application, the division asked to
exempt certain aquifers from protection under the SDWA. These
"exempt aquifers" were 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.
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
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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.
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 about
proposed UIC applications and provides an opportunity for it to
comment. Additionally, the division agreed not to issue final
approvals until regional board concerns are satisfied.
The criteria for aquifer exemption for Class II wells (40 CFR
§146.4) are as follows:
a) the aquifer is not a source of drinking water,
b) 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
c) the total dissolved salts (TDS) concentration is between
3,000 and 10,000 milligrams per liter. (TDS may be
approximately considered as total dissolved salts.)
In 2011, a US EPA audit of the division's implementation of the
UIC program 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.
In the last year there have been a series of revelations
showing, at best, 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 an exemption or where
the aquifer's water quality was unknown without obtaining an
aquifer exemption. Some of these "non-exempt aquifers" contain
or may contain good quality water. It was further revealed that
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two primacy agreements were in existence - one excluding 11 good
water quality aquifers from exemption and the other approving
their exemption.
As of today, 23 injection wells have now been shut-down due to
contamination concerns stemming from the injection location, and
over 2,500 injection wells 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. In mid-May, the division and board revealed
that an additional 3,600 injection wells appeared to also be
improperly permitted with respect to aquifer exemptions,
although the aquifers in this instance are likely to all be
hydrocarbon-bearing. 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.
After a series of letter exchanges between the board, the
division and the US EPA, a schedule for bringing all
non-compliant injection 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 down. This compliance schedule is in division
emergency regulations approved in April and the process has
started for a regular regulatory rulemaking too. The deadline
for all wells is February 15, 2017 with two intermediate dates
(October 15, 2015 and December 31, 2016) for higher priority
wells.
Comments
Concurrence between the division and the board is appropriate
for aquifer exemptions. As noted above, the board has
jurisdiction over water quality, although the division has
primacy for Class II UIC. 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. The added weight of
statutory concurrence may help to ensure continuing cooperation.
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The bill's potential impact on the resolution of the
non-compliant wells. This bill would impact the resolution of
the non-compliant 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. Approximately 140 active wastewater disposal wells
inject into aquifers with TDS concentrations of less than 3,000
milligrams per liter. The 11 aquifers of uncertain exemption
also all have TDS concentrations of less than 3,000 milligrams
per liter.
There are pending budget actions on the UIC program. The
division and the board have asked for increased ongoing funding
and personnel to address the UIC program, aquifer exemptions and
other related activities.
Related Legislation
SB 248 (Pavley, 2015) reforms the division's well history
reporting and the regulations governing its UIC program. (This
bill is on the Senate floor).
SB 545 (Jackson, 2015) revises and updates division's authority
and permitting practices, and reforms the handling of
confidential wells (This bill was held on the Senate
Appropriations Committee Suspense file).
AB 356 (Williams, 2015) provides 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. (This bill
is on the Assembly floor.)
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
Ongoing costs of $560,000 from the Oil, Gas, and Geothermal
Administrative Fund (special) to the board to consider aquifer
exemptions, and
Unknown potential revenues losses to the Oil, Gas, and
Geothermal Administrative Fund (special) for decreased oil
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production.
SUPPORT: (Verified6/1/15)
Association of Irritated Residents
Ballona Network
California League of Conservation Voters
Center for Race, Poverty and the Environment
Center for Environmental Health
Citizens for Responsible Oil and Gas
Clean Water Action
Coastal Environmental Rights Foundation
Earthworks
Environment California
Environmental Action Center of West Marin
Environmental Defense Center
Environmental Working Group
Foothill Conservancy
Fresnans Against Fracking
League of Women Voters
Los Padres ForestWatch
Natural Resources Defense Council
Planning and Conservation League
San Diego350
Sierra Club California
Southern Monterey County Rural Coalition
The Wildlands Conservancy
Wholly H2O
OPPOSITION: (Verified6/1/15)
African American Farmers of California
Anne DeMartini, Trustee, Yosemite Community College District
Associated Builders & Contractors of California
Buddy Mendes, Supervisor, Fresno County Board of Supervisors
California Asian pacific Chamber of Commerce
California Chamber of Commerce
California Cotton Ginners Association
California Cotton Growers Association
California Independent Petroleum Association
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California Women for Agriculture
Camarillo Chamber of Commerce
Cerritos Regional Chamber of Commerce
Chambers of Commerce Alliance of Ventura & Santa Barbara
Counties
Clint Olivier, Councilmember, City of Fresno
Coastal Energy Alliance
Craig Pedersen, Supervisor, Kings County Board of Supervisors
Dick Monteith, Supervisor, Stanislaus County Board of
Supervisors
Doug Verboon, Supervisor, Kings County Board of Supervisors
El Monte/South El Monte Chamber of Commerce
Frank Hotchkiss, Councilmember, City of Santa Barbara
Fresno Area Hispanic Foundation/Downtown Business Hub
Fresno County Farm Bureau
Greater Bakersfield Chamber of Commerce
Hayward Chamber of Commerce
Humboldt Taxpayer's League
Huntington Beach Chamber of Commerce
Independent Oil Producers' Agency
Inland Empire Economic Partnership
International Faith Based Coalition
Jim DeMartini, Supervisor, Stanislaus County Board of
Supervisors
José Flores, Councilmember, City of Clovis
Justin Mendes, Councilmember, City of Hanford
Kern County Black Chamber of Commerce
Kern County Firefighters IAFF Local 1301
Kern County Hispanic Chamber of Commerce
Kern County Taxpayers Association
Kern Economic Development Corporation
Kings County Farm Bureau
Latino Community Roundtable of Stanislaus County
Lee Brand, Councilmember, City of Fresno
Louie Arrollo, former Mayor, City of Ceres
Luis Chavez, Trustee, Fresno Unified School District
Mike Spence, Councilmember, City of West Covina
Mike Welsh, School Board Member, Ceres Unified School District
Monterey County Farm Bureau
National Association of Royalty Owners
National Association of Royalty Owners - California
National Federation of Independent Business
National Hmong American Farmers
Nickel Family, LLC
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Nisei Farmers League
Oxnard Chamber of Commerce
Pete Vander Poel, Supervisor, Tulare County Board of Supervisors
Peter Adam, Supervisor, Santa Barbara County Board of
Supervisors
Peter Foy, Supervisor, Ventura County Board of Supervisors
Porterville Chamber of Commerce
Richard Valle, Supervisor, Kings County Board of Supervisors
Rick Farinelli, Supervisor, Madera County Board of Supervisors
Robert Silva, Mayor, City of Mendota
Rudy Mendoza, Mayor, City of Woodlake
Russ Curry, Mayor, City of Hanford
Sacramento Asian Pacific Chamber of Commerce
Sal Quintero, Councilmember, City of Fresno
San Diego East County Chamber of Commerce
San Diego Tax Fighters
San Joaquin Farm Bureau
Santa Barbara County Taxpayers Association
Santa Barbara Technology and Industry Association
Santa Fe Springs Chamber of Commerce
Santa Maria Valley Chamber of Commerce & Visitor and Convention
Bureau
Steve Brandau, Councilmember, City of Fresno
Steve Nascimento, Councilmember, City of Turlock
Steve Worthley, Supervisor, Tulare County Board of Supervisors
Sylvia V. Chávez, Mayor, City of Huron
Taft Chamber of Commerce and Visitors Bureau
Terry Withrow, Supervisor, Stanislaus County Board of
Supervisors
The Chamber of Commerce of the Santa Barbara Region
Tulare County Farm Bureau
Valley Industry & Commerce Association
Western Agricultural Processors Association
Western States Petroleum Association
Western United Dairymen
Four individuals
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
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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
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."
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Prepared by: Katharine Moore / N.R. & W. / (916) 651-4116
6/4/15 16:02:47
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