BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 887|
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THIRD READING
Bill No: SB 887
Author: Pavley (D), et al.
Amended: 5/31/16
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE: 7-2, 3/29/16
AYES: Pavley, Allen, Hertzberg, Hueso, Jackson, Monning, Wolk
NOES: Stone, Vidak
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-1, 4/20/16
AYES: Wieckowski, Gaines, Hill, Jackson, Leno, Pavley
NOES: Bates
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/27/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
SUBJECT: Natural gas storage wells
SOURCE: Author
DIGEST: This bill provides a framework for reforming oversight
of natural gas storage facilities by, among other things,
mandating minimum standards for gas storage well inspections,
monitoring, and testing; training of personnel; leak monitoring,
planning for emergency response; developing and incorporating
best practices into regulations; and an assessment of risk to
determine setback distances for gas storage wells.
ANALYSIS:
Existing law:
1)Establishes the Division of Oil, Gas and Geothermal Resources
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(DOGGR) in the Department of Conservation at the Natural
Resources Agency. DOGGR is the state's oil and gas regulator,
and DOGGR's leader is the oil and gas supervisor (supervisor).
2)Provides that natural gas storage facilities are subject to
the overall jurisdiction of the California Public Utilities
Commission (CPUC). Natural gas storage wells and associated
piping and equipment are under the jurisdiction of DOGGR.
3)Establishes the Air Resources Board (ARB) and the Office of
Environmental Health Hazard Assessment (OEHHA) in the
California Environmental Protection Agency. ARB has
jurisdiction over greenhouse gas emissions and OEHHA's mission
is to protect and enhance public health and the environment by
scientific evaluation of risks posed by hazardous substances.
In California, gas storage wells are currently regulated
through the state's underground injection control program.
Prior to February 2016, none of these regulations had been
updated since 1978.
This bill provides a framework for reforming oversight of
natural gas storage facilities by, among other things, mandating
minimum standards for gas storage well inspections, monitoring,
and testing; training of personnel; leak monitoring, planning
for emergency response; developing and incorporating best
practices into regulations; and an assessment of risk to
determine setback distances for gas storage wells.
Specifically, this bill:
1) Directs ARB to develop a natural gas storage facility
monitoring program, as specified, that includes continuous
monitoring of the ambient concentrations of natural gas and
may be supplemented by daily leak detection measurements.
a) Requires operators of gas storage facilities to
develop and submit facility monitoring plans to ARB for
review and approval or disapproval.
b) Requires monitoring data be provided to ARB and all
data provided shall be reported to and posted on-line by
DOGGR.
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2) Requires natural gas storage wells by January 1, 2018 and
annually thereafter to be tested for a loss of integrity
resulting in a leak, as specified.
3) Requires a natural gas storage well to have an automatic
downhole shutoff system, including subsurface safety valves,
as specified.
a) The system shall be tested and results reported
semiannually.
b) DOGGR shall review and update practices for the use of
subsurface safety valves to reflect the best practices
determined by independent experts, as specified.
4) Requires baseline and follow-on proactive evaluations of the
integrity of a natural gas storage well, well casing, and
cementing, using best available technology, as specified.
a) DOGGR shall develop a schedule for the completion of
baseline-proactive testing for all natural gas storage
wells by January 1, 2018. DOGGR shall also develop a
schedule for the follow-on proactive testing after
baseline testing is completed. The interval between tests
shall be no more than four years. Wells at high risk of a
loss of integrity shall be reevaluated annually.
5) Requires gas storage well injection and withdrawal be
limited to through the tubing only and annular pressure and
production/injection flowrate monitoring be continuous.
6) Directs OEHHA to perform a science-based risk assessment of
natural gas storage wells with the goal to determine
appropriate setback distances for natural gas storage wells
from different locations, activities and receptors, as
specified. The results of the assessment shall be reported to
the Legislature and DOGGR shall review and, as appropriate,
incorporate them into regulation.
7) Requires the operator of a natural gas storage well to
provide to DOGGR for the supervisor's approval certain
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programs, as specified. These programs include a maintenance
program, design and operating conditions, and a site-specific
risk management plan, among others.
8) Provides to the public a right to review the location of a
natural gas storage well or the conversion of an existing
well to gas storage service prior to its approval.
9) Requires that in the event of a large ongoing leak, as
specified, from a well that preparations for the drilling of
a relief well start within 24 hours of the discovery of the
leak.
10)Requires that DOGGR be notified immediately in the event of
a leak from a gas storage well, as specified.
11)Requires that DOGGR convene an independent panel of experts
to develop best practices for natural gas storage facilities,
as specified.
12)Requires, where feasible, that DOGGR incorporate federal
regulations applicable to gas storage facilities into its
regulations.
13)Requires enhanced reporting to DOGGR of well operations, as
specified.
14)Requires DOGGR to perform unannounced random on-site
inspections of natural gas storage wells annually, as
specified.
15)Requires an operator of a natural gas storage well to
develop and maintain a comprehensive gas storage well
training and mentoring program, as specified.
16)Requires DOGGR to post online materials provided to meet
these requirements.
17)Provides that a member of the public may bring suit for writ
of mandate against DOGGR for failure to enforce these
requirements.
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18)Provides additional civil penalties, as specified, for gas
storage well violations.
19)Makes legislative findings relevant to gas storage wells,
including the recent well failure at Aliso Canyon.
Background
On October 23, 2015, a significant leak was discovered from a
natural gas storage well in Southern California Gas Company's
(SoCal Gas') Aliso Canyon storage facility. During the course
of the leak, finally officially capped on February 18, 2016,
estimates published in the peer-reviewed scientific press
indicate almost 100,000 metric tons of the potent greenhouse gas
methane were released to the atmosphere. (SoCal Gas recently
claimed that the leak released about 84,000 tons of methane, but
has not provided any supporting material to justify this claim.)
The methane released by the leak estimated to be about 20% of
the entire state's methane emissions over the same time period.
Several months after the end of the leak, members of the
adjacent community in Porter Ranch and nearby continue to report
adverse health impacts to Los Angeles County.
SoCal Gas was unable to "kill" the leaking well on its own and
brought in a contractor to continue efforts to control the well.
Additional kill attempts were delayed due to the need to bring
in specialized equipment. Nearby residents who reported the
leak to the local air quality regulator were told by SoCal Gas
for several days that "routine maintenance" was responsible. It
was only after several days that the serious nature of the leak
was revealed to the public. Initial communication and efforts
by the operator to serve the community were woefully inadequate.
Eventually DOGGR required that a relief well be drilled. The
relief well was used to ultimately control the leaking well.
The leak caused major and unprecedented upheaval in the
surrounding Porter Ranch community. Over 8,000 households
relocated and thousands have had indoor air filters installed.
The Los Angeles County Department of Public Health ordered SoCal
Gas to provide cleaning services to houses due to the discovery
of trace amounts of heavy metals in accumulated household dust.
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The leak highlighted the need, long acknowledged by DOGGR, to
update its regulations. Numerous reports have raised concerns
about the age, operation, maintenance practices and safety of
the Aliso Canyon and other gas storage facilities state-wide.
DOGGR issued emergency regulations in February specific to
natural gas storage wells. A separate regulatory proposal from
DOGGR is expected imminently.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, there are the
following costs:
First year costs of approximately $4.68 million and ongoing
costs of approximately $3.75 million (Oil, Gas and Geothermal
Administrative Fund) for the DOGGR staffing costs resulting
from increased regulatory activities for underground gas
storage facilities.
Minor and absorbable costs to the ARB and the CPUC.
Potentially significant costs to the Office of Environmental
Health Hazard Assessment to conduct risk assessments.
SUPPORT: (Verified5/27/16)
American Lung Association in California
Asian Pacific Environmental Network
California Coastal Protection Network
CalPIRG
Center on Race, Poverty & the Environment
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Clean Power Campaign
Clean Water Action
Consumer Attorneys of California
Environment California
Environmental Working Group
Los Angeles City Council
Los Angeles County
Los Angeles County Democratic Party
Los Angeles Unified School District
Natural Resources Defense Council
Porter Ranch Neighborhood Council
Scott Schmerelson, LAUSD Board Member, District 3
Sierra Club California
Santa Susana Mountain Parks Association
South Coast Air Quality Management District
Voices for Progress
OPPOSITION: (Verified5/27/16)
None received
ARGUMENTS IN SUPPORT: According to the author, "a leak like the
one in Aliso Canyon must not be allowed to happen again.
Thousands of my constituents have had their health or their
loved ones' health affected by the leak. Lives, families,
businesses and communities have been disrupted for months. This
disruption continues even though the leak was finally stopped in
February. We must not allow a rapid return to
'business-as-usual' when it comes to the oversight and
monitoring of these wells and facilities. We now are aware of
the all-too-real risks to public health and the environment
posed by natural gas facilities and must ensure meaningful
changes occur in their operations."
"After the leak started, state and local regulators worked
diligently to protect the public and stop it. Going forward, it
is important that new minimum standards for gas storage wells be
set to ensure safe operation, including the development of best
practices by experts. SB 887 institutes proactive testing and
evaluation of wells to prevent leaks from starting. This is the
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best method to protect against another disaster on the scale of
Aliso Canyon. If a leak does occur, however, new air monitoring
requirements will help to identify it quickly. This will help to
limit emissions of methane, a potent short-lived climate
pollutant, to the atmosphere."
"When the South Coast Air Quality Management Board went to
investigate the facility at Aliso Canyon after the well failure,
an additional 15 leaks were found. The CPUC reported that
another 200 leaks were found at other gas storage facilities
statewide during first quarter testing. Eight of those leaks
were serious. These results highlight the need for SB 887 and
for better oversight and monitoring."
"SB 887 also addresses the public communication problems
experienced at the start of the Aliso Canyon leak by requiring
improved planning and more rapid and complete reporting and
dissemination of information to the public."
Prepared by:Katharine Moore / N.R. & W. / (916) 651-4116
5/31/16 20:45:45
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