BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 887 (Pavley) - Natural gas storage wells
          
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          |Version: April 26, 2016         |Policy Vote: N.R. & W. 7 - 2,   |
          |                                |          E.Q. 6 - 1            |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: May 27, 2016      |Consultant: Narisha Bonakdar    |
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          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  
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            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  
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           Clarifies training requirements.


           Makes clarifying, technical changes.







                                          







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