BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 900| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 900 Author: Jackson (D), et al. Amended: 5/31/16 Vote: 21 SENATE NATURAL RES. & WATER COMMITTEE: 8-1, 3/29/16 AYES: Pavley, Allen, Hertzberg, Hueso, Jackson, Monning, Vidak, Wolk NOES: Stone SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen SUBJECT: State lands: coastal hazard removal and remediation program SOURCE: California State Controller Betty Yee DIGEST: This bill requires, upon appropriation of funding by the Legislature, that the State Lands Commission (SLC) administer a coastal hazard removal and remediation program. ANALYSIS: Existing law establishes the SLC pursuant to Public Resources Code Section 6101 et seq., as an independent commission comprised of the Lieutenant Governor, the State Controller, and the Director of Finance. Established in 1938, the SLC manages the state's 4 million acres of tidelands and 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 SB 900 Page 2 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. This bill: 1)Contains findings and declarations intended to demonstrate the historic and present concerns with remnants of abandoned structures along the coast including oil and gas wells, piers, pilings, jetties, and seawalls. Early oil and gas wells that were abandoned decades ago prior to the development of modern standards may still be seeping oil into the surf zone that adversely affects human recreation and other environmental issues. The findings also note the absence of a statewide inventory of coastal hazards, and the lack of funding not only for the inventory, but also for assessments for removing the hazards, as well as implementation of actual removal projects. 2)Requires, upon appropriation of funding by the Legislature, that the SLC administer a coastal hazard removal and remediation program that does all of the following: a) Complete an inventory of the legacy oil and gas wells and other coastal hazards along the coast including field studies and determining high priority hazards and legacy oil and gas wells to remediate. b) Survey, study, and monitor oil seepage in state waters and request studies to determine and address oil seepage locations, rates, environmental impacts, and possible mitigation measures. c) Begin the process of remediating legacy oil and gas wells that have high risk of leaking and with any remaining fund to remove other identified coastal hazards. 3)Authorizes the SLC to seek to abandon, in cooperation with the Division of Oil, Gas, and Geothermal Resources, legacy oil and gas wells that present a hazard to public health and safety and the environment. Legacy oil and gas wells are defined as those with little or no information on how the well was SB 900 Page 3 originally abandoned, and where there is no viable company with the responsibility to undertake abandonment procedures that complies with modern standards. 4)Defines "coastal hazards" to include piers, jetties, groins, seawalls, and facilities associated with oil extraction or other commercial operations that may include wood or steel piles, sheet metal pilings, H piles and H beams, well casings, well caissons, railroad irons, cables, angle bars, pipes, pipelines, rip rap, and wood beams and structures. 5)Provides that the SLC may seek private or philanthropic funding to assist with its coastal hazard removal and remediation program. 6)Proposes funding pursuant to Section 6217 of the Public Resources Code (tidelands oil revenues) which generally provides that funds paid to the SLC shall be deposited in the General Fund. For fiscal year 2017-18, the sum of $2 million would be transferred to the Land Bank Fund for the purpose of implementing the SLC coastal hazard removal and remediation program. 7)Requires, in subsequent fiscal years, an amount sufficient to bring the unencumbered balance to $2 million. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, $2 million per year transferred from the General Fund to the Land Bank Fund (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; 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; minor and absorbable costs to the SLC to report activities and accomplishments to the Legislature; and minor and absorbable costs to the Division of Oil, Gas and Geothermal Resources for permitting and SB 900 Page 4 consultation activities related to plugging and abandoning wells. SUPPORT: (Verified5/27/16) California State Controller Betty Yee (source) County of Santa Barbara Environmental Defense Center Heal the Ocean Get Oil Out Santa Barbara Channelkeeper State Lands Commission Sierra Club California OPPOSITION: (Verified5/27/16) None received ARGUMENTS IN SUPPORT: California State Controller Betty Yee is the sponsor of this bill. Along with the other supporters, she is quite concerned by the fact that the SLC estimates that there are approximately 200 "legacy" oil wells in California, the majority of which are in Santa Barbara County near Summerland and Ellwood beaches and along the Central Coast. The SLC, Controller Yee, and many of the other supporters are also actively in support of the in-depth study of coastal hazards, the removal of other coastal hazards unrelated to oil and gas production, and the monitoring of "natural seepage." The SLC pointed out that drilling activity on tidelands occurred before the process was regulated and that there was little if any oversight of abandoned activities. Also, early coastal protective structures, such as seawalls and groins, have deteriorated and are now public safety hazards. In both cases, because there are no identifiable responsible parties, the State of California is responsible for removing and remediating these hazards. SB 900 Page 5 The SLC argues that it has a good track record of removing and remediating coastal hazards when funding is provided. Sierra Club California states that while the visual infrastructure of old oil operations has been removed, many of these wells were not properly capped, causing fresh oil to foul the ocean and beaches on a regular basis. Additionally, it notes that the Refugio oil spill in 2015 highlighted the state's lack of reliable data on the amount of natural oil seepage in state waters which underscores the importance of the study and monitoring provision regarding natural seepage that is in this bill. Prepared by:William Craven / N.R. & W. / (916) 651-4116 5/31/16 21:58:34 **** END ****