BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 887|
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UNFINISHED BUSINESS
Bill No: SB 887
Author: Pavley (D), et al.
Amended: 8/19/16
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
SENATE FLOOR: 30-9, 6/1/16
AYES: Allen, Anderson, Beall, Block, De León, Gaines,
Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill,
Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire,
Mendoza, Mitchell, Monning, Moorlach, Pan, Pavley, Roth,
Wieckowski, Wolk
NOES: Bates, Berryhill, Cannella, Fuller, Morrell, Nguyen,
Nielsen, Stone, Vidak
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR: 75-1, 8/24/16 - See last page for vote
SUBJECT: Natural gas storage wells
SOURCE: Author
SB 887
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DIGEST: This bill provides a framework for reforming the
oversight and regulation of natural gas storage wells.
Assembly Amendments align the bill's provisions with regulatory
activities underway at the Division of Oil, Gas and Geothermal
Resources (DOGGR), extend DOGGR's emergency regulations, and
revise the existing fee that supports DOGGR's regulatory
activities.
ANALYSIS:
Existing law:
1) Establishes 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) Requires the supervisor to supervise the drilling,
operation, maintenance, and abandonment of oil and gas wells
and the operation, maintenance, and removal or abandonment of
tanks and facilities attendant to oil and gas production in
order to prevent damage to life, property and natural
resources, among other reasons.
3) Requires the operator of any oil and gas well, before
commencing the work of drilling the well, among other
actions, to file with the supervisor a notice of intention,
and the notice of intention is subject to approval.
4) 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.
5) Establishes the Air Resources Board (ARB) in the California
Environmental Protection Agency. ARB has jurisdiction over
greenhouse gas emissions and is required to adopt rules and
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regulations to achieve maximum technologically feasible and
cost-effective greenhouse gas emission emissions reductions.
6) Requires the supervisor to continue the prohibition against
the Southern California Gas Company (SoCalGas) injecting
natural gas into the Aliso Canyon gas storage facility in Los
Angeles until a comprehensive review of the safety of the gas
storage wells at the Aliso Canyon facility is completed and
the supervisor determines that well integrity has been
ensured by the review, as specified.
7) Requires the CPUC, no later than July 1, 2017, to open a
proceeding on the feasibility of minimizing or eliminating
use of the Aliso Canyon gas storage facility while still
maintaining energy and electric reliability for the region.
This bill provides a framework for reforming the oversight and
regulation of natural gas storage wells. Specifically, this
bill:
1) Requires ARB, as specified, to develop a natural gas storage
facilities monitoring program that includes continuous
monitoring of ambient concentrations of natural gas to
identify leaks.
2) Requires an operator of a gas storage facility to develop
and submit to the ARB a monitoring plan and the monitoring
data.
3) Defines "gas storage well" as an active or idle well used
primarily to inject natural gas or withdraw natural gas from
an underground natural gas storage facility.
4) Requires, on or before January 1, 2018, all gas storage
wells to have commenced a mechanical integrity testing regime
that includes leak testing, casing wall thickness inspection,
pressure testing, and any other testing deemed necessary by
DOGGR.
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5) Requires DOGGR to promulgate regulations that establish
standards for the design, construction, and maintenance of
all gas storage wells to ensure that integrity concerns with
a gas storage well are identified and addressed before they
can become a threat to life, health, property, the climate,
or natural resources.
6) Requires gas storage wells to be designed, constructed, and
maintained to ensure that a single point of failure does not
pose an immediate threat of loss of control of fluids.
7) Requires operators to submit for the supervisor's approval
various material including:
a) Data demonstrating stored gas is confined to the
approved zone;
b) A risk management plan;
c) A natural gas leaks prevention and response program;
d) A protocol for public notice of a large,
uncontrollable leak;
e) A plan for corrosion monitoring and evaluation;
f) Planned risk mitigation efforts; and,
g) A regular maintenance program.
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8) Requires DOGGR to perform unannounced random onsite
inspections of some gas storage wells annually.
9) Requires an operator to develop and maintain a comprehensive
gas storage well training and mentoring program for
employees. In addition, if storage field employees are
represented by a labor union, the operator must consult with
the relevant union local.
10)Revises the annual fees charged to support gas storage well
regulatory efforts at DOGGR be proportional to the product of
the number of wells and the total field capacity of the
reservoir divided by the statewide sum of this product across
all storage reservoirs.
11)Requires, in the event of a large uncontrolled release of
gas from a storage reservoir, that an additional charge to
defray DOGGR's costs for its response be assessed, as
specified.
12)Requires for any new gas storage facility proposed that the
CPUC ensures a risk assessment is conducted that evaluates
potential impacts of a leak on public and environmental
health, safety, and welfare.
13)Requires DOGGR's emergency regulations related to
underground gas storage projects to remain in effect until
January 1, 2019.
14)Provides that specific provisions for the Aliso Canyon gas
storage facility instituted by SB 380 (Pavley, Chapter 14,
Statutes of 2016) shall not be diminished or impaired by this
bill.
Background
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On Friday, October 23, 2015, a natural gas storage well owned by
SoCalGas and located in the Aliso Canyon storage field in close
proximity to the Porter Ranch neighborhood in Los Angeles County
began leaking natural gas. The leak continued until it was
initially controlled on February 11, 2016, and the plug was
confirmed on February 18, 2016. During the four months the well
leaked, there were numerous attempts to control it. All
attempts to stop the leak from the top of the well failed. A
relief well was finally able to stop the natural gas leak by
plugging the leaking well at its base. According to a recent
study, the leak at Aliso Canyon released approximately 100,000
metric tons of the potent greenhouse gas methane to the
atmosphere. This was estimated to be about 20% of total
statewide emissions during the four months of the leak.
On Wednesday following the discovery of the leak, SoCal Gas
acknowledged that the leak was not "routine maintenance." The
South Coast Air Quality Management District (SCAQMD), the local
air quality regulator, had begun receiving complaints from the
community when the leak started. Ultimately, SCAQMD received
thousands of complaints regarding the odor. Some people may
experience adverse health effects to the odorants added to
natural gas, such as nausea and headaches. In mid-November, the
Los Angeles County Department of Public Health, citing public
health concerns associated with the use of odorants in the
natural gas, ordered SoCal Gas to provide temporary housing
relocation assistance to affected residents and announced a
local health emergency. Over 8,000 households were relocated
due to the leak. Now that the leak has been stopped, residents
are returning home, regulators are investigating the cause of
the leak, and a comprehensive safety review of the other 114
wells at the field is in progress.
Numerous state entities responded to the leak. In particular,
the supervisor issued two orders (in November and December) to
provide direction on actions taken while trying to stop the
leak. On January 6, 2016, the Governor issued a proclamation of
a state of emergency, which directed several state agencies -
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DOGGR, CPUC, ARB, the California Energy Commission, the Office
of Environmental Health Hazard Assessment, among others - to
take specific actions in response to the Aliso Canyon gas leak.
In particular, DOGGR was directed to issue emergency regulations
to improve regulation for gas storage wells, and, on February 5,
2016, these emergency regulations went into effect. The
emergency regulations instituted risk-based management of
natural gas storage wells among other things. When the leak was
capped, the supervisor issued another order to SoCal Gas which
established a certain safety protocol focused on a rigorous
evaluation of well integrity that needed to be completed before
injections could resume at Aliso Canyon. DOGGR continues to
work with Lawrence Berkeley National Laboratory, Lawrence
Livermore National Laboratory, and Sandia National Laboratory in
developing permanent regulations for gas storage wells. A
discussion draft of the regulations was released July 8, 2016.
This bill is consistent with the proposals in DOGGR's discussion
draft.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Assembly Appropriations Committee there are no
additional costs associated with this bill.
SUPPORT: (Verified8/23/16)
American Lung Association in California
Asian Pacific Environmental Network
Michael Bennett, Goleta City Councilmember
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 Defense Fund
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
Utility Workers Union of America
Voices for Progress
OPPOSITION: (Verified8/23/16)
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 were disrupted for months. This
disruption continues even though the leak was finally stopped
over 5 months ago. 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 standards for gas storage wells be set to
ensure safe operation, including regular testing and evaluation
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of wells to prevent leaks from starting."
"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."
ASSEMBLY FLOOR: 75-1, 8/24/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dodd, Eggman, Beth Gaines, Gallagher,
Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,
Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández,
Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine,
Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty,
Medina, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NOES: Harper
NO VOTE RECORDED: Dahle, Daly, Frazier, Melendez
Prepared by:Katharine Moore / N.R. & W. / (916) 651-4116
8/25/16 17:45:07
**** END ****
SB 887
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