BILL ANALYSIS
AB 234
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Date of Hearing: August 26, 2010
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 234 (Huffman) - As Amended: August 9, 2010
SUBJECT : Oil spill prevention and response: transfer of oil:
State Lands Commission
SUMMARY : Requires the Office of Spill Prevention and Response
(OSPR) administrator to adopt regulations that would require
booms to be deployed before all oil transfer operations unless
pre-booming is determined not to be safe and effective.
Requires the State Lands Commission (SLC), on or before March 1,
2011, to report to the Legislature on regulatory action and
statutory recommendations that ensure maximum safety and
prevention of harm during offshore drilling.
EXISTING LAW
1)Establishes the Lempert-Keene-Seastrand Oil Spill Prevention
and Response Act (Act) which directs the administrator of the
Office of Oil Spill Prevention and Response (administrator,
OSPR), within the Department of Fish and Game (DFG), to have
primary authority over marine oil spill response, containment,
and cleanup.
2)Requires the OSPR administrator to adopt and implement
regulations governing the adequacy of oil spill contingency
plans to be prepared and implemented, taking into
consideration marine facility or vessel contingency plan
requirements of the national and California contingency plans,
the SLC, State Fire Marshal, and California Coastal
Commission. The regulations must ensure that standards set
for response, containment, and cleanup equipment are
maintained and regularly improved to protect state resources;
and ensure that each contingency plan demonstrates that all
protection measures are being taken to reduce the possibility
of an oil spill occurring as a result of the operation of the
marine facility or vessel.
3)Requires the OSPR administrator and the SLC executive officer
to establish rules and regulations relating to certain certain
matters for a marine facilities used for transferring oil to
or from tankers and barges.
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4)Creates the Oil Spill Prevention and Response Administration
Fund (Fund) to fund OSPR's implementation of the Act, among
other oil spill prevention programs, through fees due per
crude oil or petroleum barrels delivered to state marine
terminals. The fee is not to exceed $0.05 per barrel and
creates a fund resource for oil spill cleanup in the case that
the responsible party is unknown or is not financially able to
do so. The Fund includes:
a) $55 million from fees on oil importation, exportation,
and refining.
b) $55 million borrowed by the Treasurer from a "financial
security."
c) Bonds issued by the Treasurer upon request from the
Governor.
5)Requires the administrator to charge a nontank vessel owner or
operator a reasonable fee, to be collected with each
application to obtain a certificate of financial
responsibility, in an amount that is based upon the
administrator's costs in implementing certain provisions
relating to nontank vessels. Revenue from the fee is deposited
into the Fund for appropriation by the Legislature for
specified purposes.
THIS BILL :
6)Require the OSPR administrator to adopt regulations requiring
a marine oil transfer unit, at the point of transfer, to
provide and deploy equipment for the containment of oil spills
if they occur including:
a) Prior to oil transferring, a vessel would be required to
"pre-boom," or install a marine surface flotation barrier
prior to, and during any, oil transfer operation, including
bunkering or lightering, unless it is not safe to do so.
b) Check the boom during oil transferring, especially
during changes in weather conditions.
c) Determine alternative protocols when pre-booming is not
determined to be safe.
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7)Requires the administrator to determine case-by-case
thresholds for pre-booming during oil transfers including
personnel safety, sea and wave states, current velocity, wind
speed, vessel traffic, and fishing activity, among others.
8)Requires the oil transfer vessel operator to communicate with
OSPR when an oil transfer was not pre-boomed at a time when
thresholds indicated that it was safe to do so.
9)Increases the maximum fee per-barrel of oil or petroleum
product to $0.06 and authorizes the administrator to adjust
the maximum per barrel fee annually for inflation according to
the Consumer Price Index.
10)Establishes the non-tank vessel owner or operator fee paid to
the administrator to be $3,000 per vessel for an application
to obtain a certificate of financial responsibility.
11)Requires, on or before March 1, 2011, the State Lands
Commission (SLC) to report to the Legislature regarding
regulatory actions taken to ensure maximum offshore oil
drilling including:
a) Offshore drilling rig requirements for state water
operations shall have fully redundant and functioning
safety systems to prevent blowout preventer failure.
b) A blowout response control plan description to accompany
a discharge of hydrocarbons including:
i) The technology and timeline for regaining well
control.
ii)The strategy, organization, and resources necessary to
avoid harm to the environment and human health as a
result of a spill.
c) Demonstration of the best available and safest
technologies and practices were applicable.
d) Sunsets the report on January 1, 2015.
FISCAL EFFECT : According to the Senate Appropriations
Committee, this bill would generate increased revenues to the
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Oil Spill Prevention and Administration Fund of approximately
$500,000 to $1 million per year from vessel fees as well as up
to $5.2 million per year potentially from per barrel fees. This
bill would also increase costs of approximately $100,000 over
the next two years for regulation development as well as
approximately $1.15 million per year over the next two years due
to regulation enforcement. This bill would also create minor,
absorbable costs to the General fund for annual reporting.
COMMENTS : According to the author's office, "On October 30,
2009, the Dubai Star spilled between 400 to 800 gallons of
bunker oil into the San Francisco Bay within six miles of the
Alameda coastline, devastating local wildlife and aquaculture.
Investigators for [OSPR] say the Dubai Star oil spill occurred
when one of the ship's massive fuel tanks overfilled during an
early morning refueling stop and crew members failed to notice
until oil had already seeped into the bay. The Dubai Star did
not pre-boom prior to the oil transfer, but did have the
appropriate equipment on board the vessel. According to OSPR,
by the time workers realized there was a leak, it was too late
to contain by deploying the booms."
The author's office also notes that "had the Dubai Star
pre-boomed prior to beginning the oil transfer, it could have
prevented a vast majority of the oil leaking into the bay and
economic hardships for the fisheries that had to be closed."
OSPR distributed a "Notice of Informal Written Comment period"
May 19, 2010, for draft regulations relating to booming. The
informal comment period ends June 14, 2010. Current regulations
authorize "pre-booming" or "standby booming" for transfer units.
The proposed draft regulations require pre-booming, except that
standby booming is required if the transfer units have
successfully demonstrated to the OSPR administrator their
ability to deploy and maneuver boom in an equipment deployment
drill. Proposed draft regulations also require annual equipment
deployment drills necessary to meet these standby drill
requirements, monitored by OSPR, that must be conducted in an
environment and under conditions similar to those that would be
encountered during an offshore bunkering operation.
Existing state regulations require an oil transfer unit to
either deploy pre-boom equipment surrounding a transfer
operation or to deploy stand-by booming, which is the ability to
deploy at least 600 feet of boom within 30 minutes of the
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discovery of a spill. In both situations, the transfer unit
must have access to an additional 600 feet of boom that can be
deployed within one hour in the event of a spill. Last month,
OSPR held a public meeting to discuss changes to the oil spill
transfer regulations. The proposed changes would restrict the
stand-by booming option to transfer units that have successfully
completed a boom deployment drill.
This bill would require a transfer unit or oil transfer
operation to pre-boom each oil transfer for the duration of the
entire transfer operation, and includes additional alarm and
bridge staffing requirements. This bill makes an exception for
pre-booming if weather or ocean conditions, or both, are such
that pre-booming would not be safe or effective.
OSPR regulations already contain requirements for oil
pre-transfer operations. For example, in the case of
"lightering," oil must be transferred from a larger oil tank
vessel to a smaller vessel for transport into a port due to size
restrictions. OSPR regulations state that oil transfer
operations shall not be initiated, or shall be discontinued,
during severe weather, electrical storms, or wave conditions,
during a fire, if two-way voice communication is lost, or if any
other conditions jeopardize the safety of the transfer.
According to the Federal Bureau of Ocean Energy Management,
Regulation and Enforcement within the Unites States Department
if the Interior (DOI), physical barriers including containment
booms are the first equipment mobilized at the scene of an oil
spill as well as the last equipment to be removed. Booming not
only contains the spilled oil, but also concentrates it to ease
the spill cleanup and recovery process. DOI indicates that,
when appropriate, booms are preferable to chemical dispersants
or burning because the oil may be recovered for recycling or for
proper disposal. Booms come in many different shaped and sizes,
and often include "skirts" that hang down underwater from the
boom surface to be able to contain more fluid volume. According
to DOI, most booms are not capable of containing oil in currents
greater than 0.7 knots (0.35 meter/second) that flow at right
angles to the boom regardless of boom size or skirt depth, which
can limit the speed of boom towing in order to function
effectively. The effectiveness of containment booming is
dependent on currents, wind, and waves. Even minor currents can
draw oil under the booms; waves may cause splash-over, and wind
and currents may cause the boom to sink or plane. However, new
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open ocean boom designs capable of containing oil and tow at
speeds greater than 3 knots (15.4 m/s) are becoming commercially
available. Although marine weather conditions such as wave
speed and height will have a significant impact on the
effectiveness of booming during oil transfers, it is possible
that the containment of any oil could be considered a success in
the case of an accidental oil spill during transfer.
Booms have been researched and utilized for decades as useful
tools for containing spilt oil. In 1968, the science journal
Nature published an article on oil pollution following the
Torrey Canyon supertanker disaster off the coast of England in
March of 1967. The article called for more research into oil
spill prevention and containment, and made references to an
impressive "experiment in which a pipe a foot in diameter was
slung between a grounded tanker and another ship off the Bahamas
in March this year." The same scientific journal last month
published a similar article in response to the recent Deepwater
Horizon spill which also described booms as a persisting method
of oil spill containment. Although booms have persisted as
effective and economical methods of oil containment even with
the development of modern chemical dispersants, additional
research should be directed towards novel, environmentally
responsible mechanisms for spill containment as well as in oil
spill prevention.
According to the opposition on record, this bill presents
economic and safety concerns. For example, according to the
opposition, "Anchorage 9 in San Francisco is the only designated
anchorage for fuel transfers in the Bay. Currents there exceed
1.0 knot in speed for over 67% of the tidal cycles. Boom loses
effectiveness at currents over 0.7 knots. For this reason, as
well as concerns over human safety, AB 234 would effectively put
an end to fueling at anchorage in the bay." Additional
arguments in opposition state that "deployment of boom in fast
currents and/or inclement weather is inherently dangerous work.
Although responders are prepared to place themselves in harm's
way in the event of a spill, assuming those risks under a
precautionary scenario where the benefits are questionable may
prove to be untenable for these companies."
Related Legislation : AB 2032 (Hancock) was introduced in 2008
and would have increased the maximum fee from $0.05 to $0.08.
This increase was proposed in order to raise additional funds
for a potential loan to the General Fund for the 2008-09 budget
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and to provide funds to meet the costs of implementing
legislation adopted that year in response to the MV Cosco Busan
incident. AB 2032 was ultimately vetoed by the Governor
claiming that OSPR's fiscal needs did not justify the increase.
SB 849 (Torlakson) Chapter 514, Statutes of 2002, increased the
maximum fee from $0.04 to $0.05 for each barrel of crude oil or
petroleum products for deposit into the Fund. It also
authorized the imposition of the administrative fee for each
application to obtain a certificate of financial responsibility
for nontank vessels. It also added to the Oil Spill Technical
Advisory Committee a member who has demonstrable knowledge of
the dry cargo vessel industry and required the committee to
prepare a report on the effectiveness of the oil spill response
and preparedness program.
REGISTERED SUPPORT / OPPOSITION :
Support
Pacific Environment - sponsor
Association of Bay Area Governments
Blue Frontier Campaign
California Association of Professional Scientists
California Coastal Commission
California League of Conservation Voters
Center for Biological Diversity
Center for Oceanic Awarenss, Research, and Education
Clean Water Action
Crab Boat Owners Association
Defenders of Wildlife
East Bay Bird Advocates
Environment California
Environmental Defense Center
Farallones Marine Sanctuary Association
Friends of the Earth
Marin Audubon Society
Marine Conservation Biology Institute
Natural Resources Defense Council
Ocean Champions
Ocean Conservancy
Ocean Conservation Research
Ocean Defenders Alliance
Ocean Revolution
Oceana
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Pacific Coast Federation of Fishermen's Associations
Richmond Shoreline Citizens Response
Save the Bay
Save the San Francisco Bay
Surfrider Foundation
Turtle Island Restoration Network
Waterways Restoration Institute
Opposition
California Association of Port Authorities
California Labor Federation
Department of Fish & Game
Matson Navigation Company
Pacific Merchant Shipping Association
Sailors Union of the Pacific
Analysis Prepared by : Jessica Westbrook / NAT. RES. / (916)
319-2092