SB 887, as amended, Pavley. Natural gas storage wells.
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 provides that a person who fails to comply with specific laws relating to the regulation of oil or gas operations is guilty of a misdemeanor.
This bill would require a natural gas storage well, before January 1, 2018, and annually thereafter, to be tested across its entire length for a loss of integrity resulting in a leak and to have those results reported to the division, and would prescribe standards for a natural gas storage well, including among other things,begin delete a requirement that the well be equipped with an automatic downhole shutoff system andend delete
required baseline and follow-on proactive evaluations.begin insert This bill would require, on or before July 1, 2018, all natural gas storage wells, except low-risk natural gas storage wells, as defined, to be equipped with an automatic downhole shutoff system and to conduct natural gas injection and production through tubing only and be isolated from contact with the well casing. The bill would require low-risk natural gas storage wells to comply with those requirements on or before July 1, 2019, except as provided. This bill would require all newly constructed natural gas storage wells to have a cement barrier, as determined by the supervisor.end insert This bill would require, in the event of a loss of the integrity of a natural gas storage well, well casing, or cementing resulting in a large ongoing leak of natural gas and associated gases and materials that pose a significant present or potential hazard to
public health and safety, property, or to the environment, that preparations for the drilling of a relief well begin within 24 hours of the discovery of the leak. This bill would require the operator, in the event of a leak of any size from a natural gas storage well, to notify the division immediately and would require the division to post information about the leak on its Internet Web site, as prescribed. This bill would require an operator of a natural gas storage well to develop and maintain a comprehensive gas storage well training and mentoring program for those employees whose job duties involve the safety of operations and maintenance of natural gas storage wells and associated equipment, as specified. This bill would require the division to convene an independent panel of recognized experts to develop best practices for natural gas storage facilities and to review and incorporate the best practices developed by the panel into its regulations for natural gas storage wells, if appropriate, and to the
extent those practices are applicable, for other wells under the division’s jurisdiction. The bill would require the division to periodically, and whenever necessary, review advances in relevant technologies and best practices for natural gas storage facilities and, if appropriate, to incorporate changes in best practices into its regulations for natural gas storage wells and, to the extent those practices are applicable, for other wells under the division’s jurisdiction. This bill would require the division to, as feasible, incorporate federal regulations applicable to natural gas storage facilities, including, into the division’s gas storage well regulations, and to perform unannounced randombegin delete on-siteend deletebegin insert onsiteend insert inspections of some natural gas storage wells annually. This bill would require the Office of Environmental
Health Hazard Assessment and the State Department of Public Health, in consultation with the division, to perform a risk assessment of natural gas storage wells tobegin delete determineend deletebegin insert determine, among other things,end insert appropriate setback distances for natural gas storage wells and to report the findings of the risk assessment to the Legislature. This bill would require the State Air Resources Board, in consultation with any local air district and the division, to develop guidelines for a monitoring program that includes continuous monitoring of the ambient concentration of natural gas at sufficient locations throughout a natural gas storage facility or planned natural gas storage facility to identify natural gas leaks and the presence of natural gas emissions in the atmosphere. The bill would require an operator of a natural gas
storage facility to develop and submit to thebegin insert
stateend insert board a facility monitoring plan that satisfies the program requirements, and would require thebegin insert stateend insert board to review the plan and to either approve or disapprove the plan. This bill would require monitoring data to be provided to thebegin insert stateend insert board. This bill would require the division to post and make available on its Internet Web site all materials that are provided to thebegin insert stateend insert board or division in order to comply with the provisions added by this act. Because a violation of these requirements would be a crime, the bill would impose a state-mandated local program.
Existing law requires the operator of a well to file a written notice of intention to commence drilling with, and prohibits any drilling until approval is given by, the supervisor or district deputy. Under existing law, the notice is deemed approved if the supervisor or district deputy fails to respond to the notice in writing within 10 working days from receipt and is deemed canceled if operations have not commenced within one year of receipt. Existing law provides that these provisions also apply to the deepening or redrilling of the well, any operation involving the plugging of the well, or any operations permanently altering in any manner the casing of the well.
This bill would require certain materials, relating to wells serving or located in a natural gas storage facility, to be submitted by the operator and approved at the supervisor’s discretion before approval of the notice. This bill would provide that the public has a right to review the locations of all new natural gas storage wells or existing wells converting to natural gas storage wells before the approval of the notice.
Existing law requires the owner or operator of any well to keep, or cause to be kept, a careful and accurate log, core record, and history of the drilling of the well.
This bill would require the well history to include all operations, injection, production, and emplacement of any materials into a natural gas storage well, and to be disclosed to the division by the operator, as specified.
Under existing law, a person who violates certain statutes or regulations relating to oil and gas well operations is subject to a civil penalty not to exceed $25,000 for each violation. Existing law provides that the unreasonable waste of natural gas by act, omission, sufferance, or insistence is opposed to the public interest and is unlawful.
This bill would provide that a violation of the prohibition against the unreasonable waste of natural gas is subject to the civil penalty not to exceed $25,000 for each violation.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
The Legislature finds and declares as follows:
2(a) Public transparency regarding risks, the regulations designed
3to mitigate those risks, and regulatory activity are essential to
4protect public health and welfare and natural
resources.
5(b) Public disclosure and safe operation of gas storage wells
6and associated piping and equipment are essential in order to
7provide for public, environmental, and occupational health and
8welfare, including a proactive approach to potential problems.
9(c) On October 23, 2015, a significant, uncontrolled leak from
10a natural gas storage well that was originally drilled over 60 years
11ago was discovered in the Aliso Canyon natural gas storage facility
12located in the County of Los Angeles. Initial efforts to stop the
13leak failed.
14(d) The Division of Oil, Gas, and Geothermal Resources in the
15Department of Conservation responded swiftly to the leak,
16including by issuing two orders that, among other
things, require
17the use of relief wells. The division worked around the clock
18overseeing efforts to stop the leak.
P5 1(e) It was several days before the community was notified of
2the leak, although numerous residents started reporting odor
3concerns almost immediately. The leaking well is up the hill and
4approximately one and one-quarter miles away from the nearest
5home. Other natural gas storage wells serving this facility are
6located closer to homes and businesses.
7(f) The operator of the leaking well had removed a subsurface
8safety valve decades earlier and had not replaced it. Regulations
9in effect at that time did not require approval or replacement of
10the valve. There was no automatic downhole shutoff system
11installed in the event of a leak. In 2014, the operator acknowledged
12publicly
in a filing to the Public Utilities Commission that many
13of its wells needed additional assessment and repair. There was
14no requirement to disclose to potential homebuyers and business
15owners the existence of the Aliso Canyon natural gas storage
16facility and its attendant risks.
17(g) The Governor declared a state of emergency on January 6,
182016, in order to facilitate the ongoing state response and efforts
19to stop the leak.
20(h) On February 18, 2016, the Division of Oil, Gas, and
21Geothermal Resources in the Department of Conservation certified
22that the Aliso Canyon leak had been stopped. Reports estimate
23almost 100,000 metric tons of the potent greenhouse gas methane
24were emitted to the atmosphere. Community health concerns
25continue postleak with hundreds of complaints reported to
the
26County of Los Angeles along with widespread concern about the
27short- and long-term impacts of the leak on public health and
28economic welfare in the area.
29(i) The standards for natural gas storage wells need to be
30improved in order to reflect 21st century technology, disclose and
31mitigate any risks associated with those wells, recognize that these
32facilities may be in locations near population centers, and ensure
33a disaster like the Aliso Canyon leak does not happen again.
Chapter 6 (commencing with Section 42710) is added
35to Part 4 of Division 26 of the Health and Safety Code, to read:
36
(a) The state board, in consultation with any local air
40district and the Division of Oil, Gas, and Geothermal Resources
P6 1in the Department of Conservation, shall develop a natural gas
2storage facility monitoring program that includes continuous
3monitoring of the ambient concentration of natural gas at sufficient
4locations throughout a natural gas storage facility or planned
5natural gas storage facility to identify natural gas leaks and the
6presence of natural gas emissions in the atmosphere. The
7continuous monitoring program may be supplemented by daily
8leak detection measurements.
9(b) The program shall include guidelines for the continuous
10monitoring which shall
include, at minimum, optical gas imaging
11and accurate quantitative monitoring of natural gas concentrations.
12The program shall include protocols for both stationary and mobile
13monitoring, as well as fixed and temporary monitoring locations.
14(c) An operator of a natural gas storage facility shall develop
15and submit to the state board a facility monitoring plan that satisfies
16program requirements pursuant to subdivision (a). The state board
17shall review the plan and may approve or disapprove the plan.
18(d) Monitoring data shall be provided to the state board. All
19materials provided to comply with this section shall be posted and
20available to the public on the Internet Web site of the Division of
21Oil, Gas, and Geothermal Resources.
Section 3133 is added to the Public Resources Code,
23to read:
(a) begin insert(1)end insertbegin insert end insert As used in this article, “natural gas storage well”
25means an active or idlebegin delete natural gas storageend delete wellbegin delete serving or located begin insert used solely to inject gas into or withdraw gas from an
26in a naturalend delete
27undergroundend insert gas storage facility.
28
(2) (A) For purposes of this section, a “low-risk natural gas
29storage well” means a natural gas storage well that meets all of
30the following:
31
(i) The well is not subject to Section 3217.
32
(ii) The well is located in a nonurban area.
33
(iii) The well meets or exceeds current well construction
34standards for gas storage wells.
35
(iv) The well was constructed
specifically for natural gas storage
36and was constructed after January 1, 1997.
37
(v) The well has a consistent and demonstrated record of
38mechanical integrity, as determined by the supervisor.
39
(vi) The well is in compliance with all other applicable
40requirements imposed by this article and the division’s regulations.
P7 1
(B) (1) The division may deem any natural gas storage well as
2ineligible for classification as a low-risk natural gas storage well
3to protect public safety and
natural resources.
4
(2) If the division exercises the authority provided in paragraph
5(1), the division shall make a written finding of that decision.
6(b) Before January 1, 2018, and annually thereafter, all natural
7gas storage wells shall be tested across their entire length for a loss
8of integrity resulting in a leak and the results of the testing shall
9be reported to the division.
10
(c) (1) Except as provided in paragraph (2), all natural gas
11storage wells shall, on or before July 1, 2018, comply with both
12of the following:
13(c) A natural gas storage well shall have
end delete
14begin insert(A)end insertbegin insert end insertbegin insertHaveend insert an automatic downhole shutoff system, including, but
15not limited to, surface-controlled subsurface safety valves,
16deployed in order to limit leaks associated with a loss of the
17integrity of a well, well casing, or cementing. The shutoff system
18shall be tested and the results of the test shall be reported to the
19division no less than semiannually.
20
(B) Conduct natural gas injection and production through tubing
21only and be isolated from contact with the well casing.
22
(2) All low-risk
natural gas storage wells shall comply with
23subparagraphs (A) and (B) of paragraph (1) on or before July 1,
242019.
25(d) The division shall review and update practices for the use
26of subsurface safety valves in natural gas storage wells to reflect
27the best practices established by independent experts pursuant to
28Section 3140.
29
(e) All newly constructed natural gas storage wells shall have
30a cement barrier, as determined by the supervisor.
31
(f) (1) The division may modify the requirements of subdivision
32(c) for low-risk natural gas storage wells to protect
public safety
33and natural resources.
34
(2) If the division exercises the authority provided in paragraph
35(1), the division shall make a written finding of that decision.
36
(g) Nothing in this section shall be construed as limiting the
37supervisor’s authority to take action to respond to a hazard.
Section 3134 is added to the Public Resources Code,
39to read:
A natural gas storage well shall meet all of the following
2requirements:
3(a) (1) Baseline and follow-on proactive evaluations of the
4integrity of the well, well casing, and cementing across the entire
5length of the well shall be conducted to thoroughly, quantitatively,
6and accurately assess their condition. These assessments shall be
7performed using the best available technology. Based upon these
8assessments, the risks posed by erosion, corrosion, material
9deterioration, scaling, cracking, and any other process that may
10produce natural gas leaks shall be determined.
11(2) By January 1, 2018, the division
shall develop a schedule
12for the completion ofbegin delete baseline-proactiveend deletebegin insert baseline proactiveend insert
13 evaluations for all natural gas storage wells.
14(3) The division shall also develop a schedule for performing
15follow-on proactive evaluations for all natural gas storage wells
16in order to measure any changes in well condition after thebegin delete17
baseline-proactiveend delete
18The schedule shall be determined based upon an assessment of
19risk. The natural gas storage wells at lowest risk of a loss of
20integrity shall be reevaluated pursuant to this paragraph at least
21once every four years and natural gas storage wells at high risk of
22a loss of integrity shall be reevaluated pursuant to this paragraph
23at least annually.
24(4) A natural gas storage well that has lost integrity or that is at
25risk of an imminent loss of integrity shall be immediately repaired
26before returning to service.
27(b) Natural gas injection and production shall be through tubing
28only and isolated from contact with the well casing.
29(c)
end delete
30begin insert(b)end insert Annular pressure and production or injection flow rate shall
31be continuously monitored.
Section 3135 is added to the Public Resources Code,
33to read:
(a) For the purposes of this section, “sensitive receptor”
35
begin delete includes, but is not limited to, a school, hospital, and residential begin insert means any living quarters, including private homes,
36housing.end delete
37condominiums, apartments, retirement homes, prisons, dormitories,
38or other housing; education resources, including preschools and
39schools operating kindergarten or any of grades 1 to 12, inclusive;
P9 1daycare centers; and health care facilities, including hospitals,
2nursing homes, and long-term care and hospice facilities.end insert
3(b) The Office of
Environmental Health Hazard Assessment
4and the State Department of Public Health, in consultation with
5the division, shall perform a science-based risk assessment of
6natural gas storage wells. The goal of the risk assessment shall be
7to determine appropriate setback distances for natural gas storage
8wells from different locations, activities, and receptors. The risk
9assessment shall include, but is not limited to, all of the following
10information:
11(1) The construction, service history, and operating conditions
12of a well.
13(2) The potential impact of a leak on public and environmental
14health, safety, and welfare. Both acute and chronic exposures for
15a range of expected emissions and emissions rates shall be
16considered.
17(3) The factors relevant to determining setback distances
18including, but not limited to, population density, sensitive receptors,
19environmentally sensitive areas, emergency response times,
20evacuation times, leak duration, chemical species emitted, and
21local meteorology.
22(4) The data necessary to determine appropriate setback
23distances.
24(c) The risk assessment conducted pursuant to subdivision (b)
25shall be subjected to peer review by independent experts.
26(d) The findings of the risk assessment required by subdivision
27(b) shall be reported to the Legislature in accordance with Section
289795 of the Government Code.
29(e) Upon completion of the risk
assessment required by
30subdivision (b), the division shall review and, as appropriate, revise
31its regulations.
Section 3136 is added to the Public Resources Code,
33to read:
(a) The operator of a natural gas storage well shall
35submit for the supervisor’s approval the following materials:
36(1) A regular maintenance program for the well and the portion
37of the facility within the division’s jurisdiction. The maintenance
38program shall include training for site personnel and proactive
39replacement of equipment at risk of failure to ensure safe operation.
P10 1(2) Design and operating conditions and parameters for the well
2and the portion of the facility within the division’s jurisdiction.
3(3) An inspection, leak detection, and monitoring
program for
4the well and the portion of the facility within the division’s
5jurisdiction that includes monitoring of natural gas concentrations
6pursuant to Chapter 6 (commencing with Section 42710) of Part
74 of Division 26 of the Health and Safety Code. Ambient natural
8gas monitoring sufficient to include monitoring of a new or
9reworked well shall be in operation before a new well is drilled or
10a well is reworked.
11(4) A site-specific risk management plan to identify and plan
12for mitigation of all threats and hazards and potential threats and
13hazards associated with natural gas storage well
operation in order
14to ensure internal and external mechanical integrity of a well. The
15risk management plan shall provide for regular review and revision,
16as needed, to ensure the plan appropriately reflects current
17conditions. The risk management plan shall include, but is not
18limited to, all of the following:
19(A) A natural gas leak prevention and response program that
20addresses the full range of natural gas leaks possible at the facility
21with specific response plans that provide for immediate control of
22the leak. The prevention and response program shall include, but
23is not limited to, all of the following:
24(i) A protocol for public notice of the leak to the community by
25the operator.
26(ii) Prepositioning,
as feasible, and identification of materials
27and personnel necessary to respond to leaks. This shall include
28materials and equipment to respond to and stop the leak itself as
29well as to protect public health.
30(iii) A training program to ensure site personnel are prepared
31to respond to a leak, consistent with the requirements of Section
323144.
33(B) A plan for corrosion monitoring and evaluation.
34(C) A schedule for regular well and reservoir integrity
35assessments.
36(D) An assessment of the risks associated with the natural gas
37storage well and its operation.
38(E) Planned risk mitigation efforts.
39(b) All of the materials described in subdivision (a) shall be
40approved by the supervisor, at his or her discretion, and in the
P11 1possession of the division before the supervisor or district deputy
2approves a notice required pursuant to Section 3203.
3(c) All of the materials described in subdivision (a) shall be
4reported to the division annually. The operator shall not deviate
5from the programs, plans, and other conditions and protocols
6contained in the materials without prior written approval by the
7supervisor.
Section 3137 is added to the Public Resources Code,
9to read:
The public has a right to review the location of a natural
11gas storage well or conversion of an existing well to a natural gas
12storage well before the approval of any notice required pursuant
13to Section 3203.
Section 3138 is added to the Public Resources Code,
15to read:
In the event of a loss of the integrity of a natural gas
17storage well, well casing, or cementing resulting in a large ongoing
18leak of natural gas and associated gases and materials that pose a
19significant present or potential hazard to public health and safety,
20property, or to the environment, preparations for the drilling of a
21relief well shall begin within 24 hours of the discovery of the leak
22regardless of any other activities undertaken to stop the leak.
Section 3139 is added to the Public Resources Code,
24to read:
In the event of a leak of any size from a natural gas
26storage well, the operator shall notify the division immediately.
27Within 24 hours of notification, the division shall post information
28about the leak on its Internet Web site and provide regular updates
29to the public until the leak is stopped.
Section 3140 is added to the Public Resources Code,
31to read:
(a) The division shall convene an independent panel of
33recognized experts to develop best practices for natural gas storage
34facilities. The panel shall consider at least all of the following:
35(1) The proximity of a natural gas storage facility and wells to
36populations of people.
37(2) The conditions at which a well should be plugged and
38abandoned, and what standards the plugging and abandonment
39should meet.
P12 1(3) The range of proactive methods to assess the integrity of a
2well, well casing, and cementing, and identifying the best available
3technology
for these assessments.
4(4) A thorough analysis of the risks associated with the
5conversion of a well for use as a natural gas storage well.
6(5) Natural gas storage well design, operating, maintenance,
7and monitoring standards, including, but not limited to, placement
8of observation wells, soil monitoring, training, and well monitoring
9after plugging and abandonment.
10(6) Risk assessment and management tools for all threats and
11hazards and potential threats and hazards associated with natural
12gas storage wells, including identifying data requirements for those
13tools, with the goal of providing for a standardized and comparable
14approach to evaluate natural gas storage wells statewide.
15(7) Automatic shutoff systems including the location and
16placement of subsurface and surface safety valves, shutoff control
17systems, reliability, and appropriate use.
18(b) Upon completion of the panel’s work pursuant to subdivision
19(a), the division shall review and incorporate best practices
20developed by the panel into its regulations for natural gas storage
21wells, if appropriate, and, to the extent those practices are
22applicable, for other wells under the division’s jurisdiction.
23(c) The division shall periodically, and whenever necessary,
24review advances in relevant technologies and best practices for
25natural gas storage facilities and, if appropriate, shall incorporate
26changes in best practices into its regulations for
natural gas storage
27wells and, to the extent those practices are applicable, for other
28wells under the division’s jurisdiction.
Section 3141 is added to the Public Resources Code,
30to read:
In order to facilitate consistency, standardization, and
32training, the division shall, as feasible, incorporate federal
33regulations applicable to natural gas storage facilities, including,
34but not limited to, Parts 190 to 199, inclusive, of Title 49 of the
35Code of Federal Regulations into the division’s natural gas storage
36well regulations.
Section 3142 is added to the Public Resources Code,
38to read:
To ensure that the division has all the records it needs
40to evaluate natural gas storage wells, the well history maintained
P13 1pursuant to Section 3213 shall include all operations, injection,
2production, and emplacement of any materials into the well. The
3operator shall disclose the well history to the division for each
4operation, injection, production, and emplacement of any material
5into the well.
Section 3143 is added to the Public Resources Code,
7to read:
The division shall perform unannounced randombegin delete on-siteend delete
9begin insert onsiteend insert inspections of some natural gas storage wells annually. The
10results shall be posted and available to the public on the division’s
11Internet Web site.
Section 3144 is added to the Public Resources Code,
13to read:
An operator of a natural gas storage well shall develop
15and maintain a comprehensive gas storage well training and
16mentoring program for those employees whose job duties involve
17the safety of operations and maintenance of natural gas storage
18wells and associated equipment. The training program shall include,
19but is not limited to, gas storage well operations, including best
20practices to prevent leaks, maintenance and testing, gas storage
21well safety regulations, emergency response, and incident reporting.
22If employees are represented by a labor union, the operator shall
23consult with the union on safety issues and, when requested,
24establish a framework to provide training through a joint
25labor-management training
program.
Section 3145 is added to the Public Resources Code,
27to read:
All materials provided to the division to comply with
29Section 3133 to 3143, inclusive, shall be posted and available to
30the public on the Internet Web site of the division.
Section 3146 is added to the Public Resources Code,
32to read:
A member of the public may bring suit for writ of
34mandate against the division for failure to enforce Sections 3133
35to 3145, inclusive.
Section 3236.5 of the Public Resources Code is
37amended to read:
(a) A person who violates this chapter or a regulation
39implementing this chapter is subject to a civil penalty not to exceed
40twenty-five thousand dollars ($25,000) for each violation. A person
P14 1who commits a violation of Article 3 (commencing with Section
23150) or Section 3300 is subject to a civil penalty of not less than
3ten thousand dollars ($10,000) and not to exceed twenty-five
4thousand dollars ($25,000) per day per violation. An act of God
5and an act of vandalism beyond the reasonable control of the
6operator shall not be considered a violation. The civil penalty shall
7be imposed by an order of the supervisor pursuant to Section 3225
8upon a determination that a violation has been committed by the
9person charged. The imposition of a civil
penalty under this section
10shall be in addition to any other penalty provided by law for the
11violation. When establishing the amount of the civil penalty
12pursuant to this section, the supervisor shall consider, in addition
13to other relevant circumstances, all of the following:
14(1) The extent of harm caused by the violation.
15(2) The persistence of the violation.
16(3) The pervasiveness of the violation.
17(4) The number of prior violations by the same violator.
18(b) An order of the supervisor imposing a civil penalty shall be
19reviewable pursuant to Article 6 (commencing with Section 3350).
20When the order of
the supervisor has become final and the penalty
21has not been paid, the supervisor may apply to the appropriate
22superior court for an order directing payment of the civil penalty.
23
The supervisor may also seek from the court an order directing
24that production from the well or use of the production facility that
25is the subject of the civil penalty order be discontinued until the
26violation has been remedied to the satisfaction of the supervisor
27and the civil penalty has been paid.
28(c) Any amount collected under this section shall be deposited
29in the Oil, Gas, and Geothermal Administrative Fund.
No reimbursement is required by this act pursuant to
31Section 6 of Article XIII B of the California Constitution because
32the only costs that may be incurred by a local agency or school
33district will be incurred because this act creates a new crime or
34infraction, eliminates a crime or infraction, or changes the penalty
35for a crime or infraction, within the meaning of Section 17556 of
36the Government Code, or changes the definition of a crime within
37the meaning of Section 6 of Article XIII B of the California
38Constitution.
O
95