BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: SB 888 Hearing Date: March 8,
2016
-----------------------------------------------------------------
|Author: |Allen, et al. |
|-----------+-----------------------------------------------------|
|Version: |1/20/2016 Introduced |
-----------------------------------------------------------------
------------------------------------------------------------------
|Urgency: |No |Fiscal: |Yes |
------------------------------------------------------------------
-----------------------------------------------------------------
|Consultant:|Felipe Lopez |
| | |
-----------------------------------------------------------------
SUBJECT: Gas corporations: emergency management
DIGEST: This bill establishes the California Office of
Emergency Services (Cal OES) as the lead agency for emergency
response to a leak of natural gas from a natural gas storage
facility.
ANALYSIS:
Existing law:
1)Creates Cal OES, within the office of the Governor, which
coordinates disaster response, emergency planning, emergency
preparedness, disaster recovery, disaster mitigation, and
homeland security activities.
2)Provides that the Public Utilities Commission (PUC) has
regulatory authority over public utilities, as defined.
3)Requires the PUC to investigate the cause of all accidents
occurring upon the property of any public utility, or directly
or indirectly arising from or connected with its maintenance
or operation, resulting in loss of life or injury to person or
property and requiring, in the judgment of the PUC,
investigation by it, and authorizes the PUC to make any order
or recommendation with respect to the investigation that it
determines to be just and reasonable.
SB 888 (Allen) Page 2 of ?
4)Provides that any public utility that violates any provision
or that fails or neglects to comply with any order, decision,
decree, rule direction, demand, or requirement of the PUC,
where a penalty has not otherwise been provided, is subject to
a penalty of not less than $500 and not more than $50,000 for
each offense.
5)Requires that any fine or penalty imposed by the PUC and
collected from a public utility be paid to the State Treasury
to the credit of the General Fund.
This bill:
1)Establishes Cal OES as the lead agency for emergency response
to a leak of natural gas from a natural gas storage facility.
2)Requires Cal OES to coordinate among other state agencies the
emergency response, public health and environmental
assessment, monitoring, and long-term management and control
of the leak.
3)Creates the Gas Storage Facility Leak Mitigation Account and
requires the PUC to deposit any penalties assessed against a
gas corporation pursuant to a gas storage facility leak into
the account.
4)Specifies that moneys in the account shall be expended, upon
appropriation by the Legislature, subject to both of the
following conditions:
a) Moneys shall be expended solely for direct emissions
reductions in furtherance of the achievement of the
greenhouse gas emissions limit established by the
California Global Warming Solutions Act of 2006. Moneys
shall not be used for the purchase of allowances or offsets
otherwise authorized by the California Global Warming
Solutions Act of 2006.
b) Moneys from penalties assessed for a gas storage
facility leak shall be expended in a manner that, at a
minimum, achieves a reduction in greenhouse gases that
exceeds the amount of those gases emitted by that leak.
5)Prohibits a gas corporation from recovering any moneys paid
SB 888 (Allen) Page 3 of ?
for fines, penalties, or damages to residents, businesses, and
other parties adversely affected by a gas storage facility
leak in any rate approved by the PUC. Those costs shall be
paid for by the gas corporation and its shareholders.
Background
Purpose of the Bill. According to the author, "this bill is
part of a comprehensive package of legislation introduced in the
Senate to address the Aliso Canyon leak disaster. While the
State's response to the leak was swift, at least seven different
agencies have been involved with no statutory single point of
responsibility and accountability to oversee efforts and
remediation actions."
The author further argues that "unlike oil spill response, which
is dictated by a robust framework to streamline agency
coordination and collaboration, California lacks a plan to
quickly and efficiently address a massive natural gas leak.
Given the extensive infrastructure of underground natural gas
storage facilities throughout California, and having seen the
potential for significant health and environmental problems that
can result from a leak, California should have a framework in
place to respond quickly and efficiently."
The bill also creates the Gas Storage Facility Leak Mitigation
Account which would fund the mitigation of greenhouse gas
impacts through direct measures to reduce emissions.
Aliso Canyon Gas Leak. The Aliso Canyon gas leak was a massive
natural gas leak that started on October 23, 2015 at the Aliso
Canyon underground storage facility near Porter Ranch, Los
Angeles. The leak was discovered during one of Southern
California Gas Company's (SoCal Gas) twice daily well
observations. The Aliso Canyon facility is the second largest
gas storage facility of its kind in the United States and it is
owned by the SoCal Gas, a subsidiary of Sempra Energy. The
facility is maintained in accordance with safety regulations
established by the Department of Oil, Gas, and Geothermal
Resources, the PUC, and other local, state and federal agencies.
Days after the leak was discovered, a dozen or more local and
state agencies were involved in an attempt to plug the leak.
It is estimated that the leak was responsible for approximately
one million barrels of gas being released per day. Experts
SB 888 (Allen) Page 4 of ?
estimate that the carbon footprint of the Aliso Canyon leak is
larger than the Deepwater Horizon leak in the Gulf of Mexico,
which is considered the largest accidental marine oil spill in
the world and at that time the largest environmental disaster in
United States history.
Natural Gas is largely composed of methane, an odorless and
invisible greenhouse gas with a global warming potential of
approximately 86 times greater than carbon dioxide in a 20-year
time frame. Initially the leak released about 44,000 kilograms
of methane per hour which is the equivalent of 1,200 tons of
methane every day. In terms of greenhouse gas output per month,
it is the equivalent of the greenhouse gas output of 200,000
cars in a year. According to a Time Magazine article on January
11, 2016, the 1.6 million pounds of methane released each day is
comparable to the emissions of 6 coal fired power plants, 2.2
million cows per day, or 4.5 million cars. Besides methane, the
gas leak also contained tert-butyl mercaptan,
tetrahydrothiophene, and methyl mercaptan, which gives the gas a
rotten egg smell and is known to cause headaches, vomiting, and
nausea.
While the leak occurred in a mountainous area more than a mile
away from any residential areas, residents have complained of
headaches, nausea, vomiting and trouble breathing. Though SoCal
Gas has claimed that "scientists agree that natural gas is not
toxic and that its odorant is harmless at the minute levels at
which it is added to natural gas," the company has been paying
to temporarily relocate residents in and around Porter Ranch.
In early January, SoCal Gas reported that it had temporarily
relocated 2,824 households or roughly 11,296 individuals.
The leak was finally permanently plugged on February 18, 2016.
When it was all said and done the Aliso Canyon gas leak was the
worst natural gas leak in United States history in terms of its
environmental impact.
Cal OES. The California Office of Emergency Services is
responsible for overseeing and coordinating emergency
preparedness, response, recovery and homeland security
activities within the state. In years past, Cal OES' primary
focus was exclusively on emergency management, but over the last
decade their mission has expanded to include responsibilities in
criminal justice, victim services, homeland security, and public
safety communications.
SB 888 (Allen) Page 5 of ?
The Cal OES began as the State War Council in 1943. With an
increasing emphasis on emergency management, it officially
became Cal OES in 1970. In 2004, the California Legislature
merged Cal OES and the Governor's Office of Criminal Justice
Planning, which was responsible for providing state and federal
grant funds to local communities to prevent crime and help crime
victims.
In 2003, with the State increasing its focus on terrorism
prevention after the attacks of September 11, 2001, the
Governor's Office of Homeland Security (OHS) was established
through an Executive Order by Governor Gray Davis. In 2009, the
California Legislature merged the powers, purposes, and
responsibilities of the former Cal OES with those of the OHS
into the newly-created California Emergency Management Agency
(Cal EMA).
On July 1, 2014, Governor Brown's Reorganization Plan #2
eliminated the Cal EMA and restored it to the Governor's Office,
renaming it Cal OES. That same year, the Public Safety
Communications Office was merged into Cal OES.
Prior/Related Legislation
SB 380 (Pavley, 2016) requires the State Oil and Gas Supervisor
to immediately institute a moratorium on injections of natural
gas into any wells located within and serving the Aliso Canyon
storage facility located in the County of Los Angeles until
specified conditions are met, including that the integrity of
each well has been quantitatively and objectively evaluated
using state-of-the-art technology, as determined by the
Supervisor with input from independent experts, and the risks
posed by well failure have been evaluated. (Pending in the
Assembly Utilities and Commerce Committee)
SB 887 (Pavley, 2016) requires the Division of Oil, Gas, and
Geothermal Resources to, before January 1, 2018, and annually
thereafter, inspect all natural gas storage wells serving or
located in a natural gas storage facility and would prescribe
standards for natural gas storage wells. (Pending in the Senate
Natural Resources and Water Committee)
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: Yes
SB 888 (Allen) Page 6 of ?
SUPPORT:
California Public Interest Research Group
Clean Water Action
Consumer Attorneys of California
Environment California
Environmental Working Group
LAUSD Board Member District 3, Scott M. Schmerelson
National Parks Conservation Association
Sierra Club California
South Coast Air Quality Management District
Union of Concerned Scientist
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: The California Public Interest Research
Group states that "SB 888 would ensure that monetary penalties
paid by the responsible gas company are used specifically for
greenhouse gas emissions reduction. This bill will also help
ensure that emergency responses to future gas leaks are more
effective. Specifically, it will designate Cal OES as the lead
response agency for natural gas leaks from storage facilities."
The Sierra Club California states that, "SB 888 will help ensure
that communities like Porter Ranch get the help they need as
soon as the emergency arises and that the state can get
environmental disasters like this under control sooner. The
bill would also establish the Gas Storage Facility Leak
Mitigation Account, managed by the PUC. It will be funded by
penalties that arise from gas storage facility leaks and those
funds must be used in a manner that will result in greenhouse
gas reductions that are at least greater than gases emitted by
the leak. To protect ratepayers, the bill will also prohibit
the utility from throwing the cost onto its customers."
DUAL REFERRAL: Senate Energy, Utilities and Communications
Committee
SB 888 (Allen) Page 7 of ?