BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 900 (Jackson) - State lands: coastal hazard removal and
remediation program
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|Version: March 9, 2016 |Policy Vote: N.R. & W. 8 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: April 25, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 900 requires the State Lands Commission (SLC), upon
appropriation of funding by the Legislature, to administer a
coastal hazard removal and remediation program within two years.
The bill also requires, for fiscal year 2017-18, the transfer
of $2 million to the Land Bank Fund (LBF) to implement the
program, and requires the transfer of an amount sufficient to
bring the unencumbered LBF balance to $2 million in subsequent
years.
Fiscal
Impact:
$2 million per year transferred from the General Fund to the
LBF in FY 2017-18, and up to $2 million per year transferred
thereafter to ensure that the unencumbered funds in the LBF
available for implementation equal $2 million.
According to the SLC,
One-time cost of $100,000 to complete the in-depth
inventory of legacy wells.
SB 900 (Jackson) Page 1 of
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Annual costs of approximately $50,000 to survey and
monitor oil seepage.
Annual costs of approximately $200,000 to remove coastal
hazards.
Cost pressures up to $390 million to plug and abandon
legacy wells. (See staff comments.)
Minor and absorbable costs to the SLC to report
activities and accomplishments to the legislature.
Minor and absorbable costs to the Division of Oil, Gas
and Geothermal Resources for permitting and consultation
activities related to plugging and abandoning wells.
Background: The SLC is an independent commission comprised of the
Lieutenant Governor, the State Controller, and the Director of
Finance. The Commission manages the state's 4 million acres of
tidelands, submerged lands, and the beds of navigable rivers,
streams, lakes, bays, estuaries, inlets, and straits. In the
marine context, the SLC has broad authority over sovereign lands
including rivers and sloughs, lakes, tidelands, and submerged
lands. It also manages energy and mineral resource development
through leases, has an oil spill prevention program at marine
oil terminals and offshore platforms, and has an invasive
species prevention program from large ocean-going vessels.
Remnants of man-made structures dating back to the late 1800s
remain along California's coastline, and tidal and submerged
lands. When no responsible parties can be identified, the
state, as owner of the land on which these legacy wells and
other coastal structures are located, is responsible for
removing and remediating these hazards.
According to a February 9, 2015 staff report to the commission
regarding SB 900, a preliminary review of internal files
indicates that approximately 195 improperly abandoned wells from
oil development between 1890 and 1938 remain on state offshore
lands in or near Santa Barbara County. This internal review
also indicates there are at least 26 abandoned wells from oil
development between 1938 and 1950. Abandonment records for these
wells are unavailable, though SLC staff note that these wells
are likely not abandoned to current standards.
Proposed Law:
SB 900 (Jackson) Page 2 of
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The bill would require, upon appropriation of funding by the
Legislature, that the SLC administer a coastal hazard removal
and remediation program to:
Conduct an inventory of the legacy oil and gas wells and
other hazards along the coast.
Survey and monitor oil seepage in state waters and
request studies to determine and address oil seepage
locations, rates, environmental impacts, and possible
mitigation measures.
Begin removal of coastal hazards, as defined, from lands
within the SLC's jurisdiction.
In co-operation with the Division of Oil, Gas and Geothermal
Resources, the SLC may abandon legacy oil and gas wells, as
defined in the bill, that present a hazard to public health
and safety, and the environment.
The bill would also authorize the SLC to seek private or
philanthropic funding to assist with its coastal hazard
removal and remediation program.
Staff
Comments: The SLC estimates that approximately 195 legacy
wells exist on California's coastline, and that the average cost
to properly plug and abandon a well is between $1.1 million and
$2 million. The bill states that the SLC may, in cooperation
with the Division of Oil, Gas and Geothermal Resources, seek to
plug and abandon wells that present a hazard to the public
health and safety, and the environment. While plugging and
abandoning efforts are not required under the bill, this
provision could create costs pressures in the hundreds of
millions.
SB 900 (Jackson) Page 3 of
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Staff notes that the Constitutional authority to appropriate
funds rests with the Legislative branch of government, and the
appropriation of funds allows for the oversight and monitoring
of programs. Staff recommends the bill be amended to delete the
continuous appropriation and make the program subject to review
in the annual budget act, thus allowing oversight and monitoring
of the program.
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