BILL ANALYSIS Ó
SB 888
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 888
(Allen) - As Amended June 29, 2016
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| |Natural Resources | |8 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill establishes the California Office of Emergency
Services (CalOES) as the lead agency for emergency response to a
leak of natural gas from a natural gas storage facility. This
bill also directs the California Public Utilities (CPUC) to
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deposit any penalties on a gas corporation related to a gas
storage leak into the Gas Storage Facility Leak Mitigation
Account, to be spent in a specified manner, including that
expenditures achieve a reduction in greenhouse gasses equivalent
to the amount of gases emitted by the leak, as determined by the
State Air Resources Board (ARB).
FISCAL EFFECT:
The total annual cost of this bill depends on the number of
significant gas leaks that occur in that year. The costs per
significant gas leak event include:
1)Minor costs per major event for CalOES to deploy an onsite
coordinator. These costs would be recovered from the
responsible party.
2)Approximately $100,000 per major event for ARB to contract for
downwind flights to characterize the natural gas release rate
at reasonable periodic intervals using small planes with
monitors to measure methane. (Oil, Gas and Geothermal
Administrative Fund)
3)Additional unknown, but potentially significant, redirection
of penalty revenue from the General Fund.
COMMENTS:
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1)Purpose. According to the author, California currently lacks a
plan to quickly and efficiently address a massive gas leak. SB
888 is intended to streamline agency coordination and
collaboration while ensuring that penalties and fines
collected from responsible parties go toward mitigating
emissions that result from the leak.
2)Aliso Canyon. On October 23, 2015, Southern California Gas
Company discovered a significant natural gas leak Aliso Canyon
Natural Gas Storage Facility. Several days passed before it
was disclosed to the community that a significant uncontrolled
leak was occurring. The leak lasted for four months and
resulted in the relocation of more than 5,000 households and
hundreds of public health complaints. In addition to the
public health concerns, ARB's initial coarse estimates
indicate that about 95,000 metric tons of methane was released
into the air, adding approximately 20% to the statewide
methane emissions during the duration of the leak.
3)Current regulatory structure and agency response to Aliso
Canyon. Although natural gas storage facilities are subject to
the overall utilities jurisdiction of the CPUC, natural gas
storage wells and associated piping and equipment fall under
the jurisdiction of the Department of Conservation's Division
of Oil, Gas and Geothermal Resources (DOGGR).
The Aliso Canyon gas leak response involved numerous agencies
in addition to CPUC and DOGGR. The Governor's January 6, 2016
proclamation of a state of emergency resulted in the following
actions, coordinated by CalOES:
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a) Direction to DOGGR to continue prohibiting all
injections into Aliso Canyon;
b) Direction to CPUC and California Energy Commission (CEC)
to reduce the pressure of the facility by withdrawing gas;
c) Directing ARB to require real-time monitoring of
emissions;
d) Direction to Office of Environmental Health Hazard
Assessment to review public health concerns, ensure energy
and natural gas reliability;
e) Direction to DOGGR to promulgate emergency regulations
to require new safety and reliability measures for
underground natural gas storage facilities; and,
f) Direction to DOGGR, CPUC, ARB, and CEC to assess the
long-term viability of natural gas storage facilities.
Analysis Prepared by:Luke Reidenbach / APPR. / (916) 319-2081
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