BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 887 (Pavley) - Natural gas storage wells ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 26, 2016 |Policy Vote: N.R. & W. 7 - 2, | | | E.Q. 6 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 27, 2016 |Consultant: Narisha Bonakdar | | | | ----------------------------------------------------------------- Bill Summary: SB 887 provides a framework for reforming oversight of natural gas storage facilities. The bill mandates minimum standards for equipment inspections, monitoring, and testing; training of personnel; leak monitoring; response planning; reporting; and information sharing. The bill also phases out certain wells, and requires the independent development and incorporation of best practices into regulations, a risk assessment, and penalties for the waste of natural gas. *********** ANALYSIS ADDENDUM - SUSPENSE FILE *********** The following information is revised to reflect amendments adopted by the committee on May 27, 2016 Fiscal Impact: First year costs of approximately $4.68 million and ongoing costs of approximately $3.75 million (Oil, Gas and Geothermal SB 887 (Pavley) Page 1 of ? Administrative Fund) for the Division of Oil, Gas and Geothermal Resources (DOGGR) staffing costs resulting from increased regulatory activities for underground gas storage facilities. Minor and absorbable costs to the Air Resources Board (ARB) and the California Public Utilities Commission (CPUC). Potentially significant costs to the Office of Environmental Health Hazard Assessment to conduct risk assessments. Author Amendments: Removes reference to 10,000 feet setback and revises existing public health risk assessment to focus on evaluating setback distances from wellheads. Requires DOGGR to review and update practices for subsurface safety valves. Requires DOGGR to develop a schedule for performing follow-on proactive safety evaluations. Clarifies annual inspection requirement for leak tests. Removes requirement that wells older than an unspecified age be phased out. Clarifies which types of leaks trigger relief well provisions. Add direction to the existing best practices determination requirement to include risk assessment and automatic shut off systems. SB 887 (Pavley) Page 2 of ? Clarifies training requirements. Makes clarifying, technical changes. -- END --