BILL ANALYSIS �
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2011-2012 Regular Session |
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BILL NO: AB 2267 HEARING DATE: June 26, 2012
AUTHOR: Hall URGENCY: No
VERSION: April 26, 2012 CONSULTANT: Alena Pribyl
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Marine resources and preservation.
BACKGROUND AND EXISTING LAW
In 2010, the California Marine Life Legacy Act was passed (AB
2503), authorizing the conversion of decommissioned offshore oil
platforms or production facilities into artificial reefs under
specified conditions.
Existing Law
1) Allows the owner or operator of an offshore oil structure to
apply to the Department of Fish and Game (DFG) for approval to
partially remove the structure if specified conditions are met
and if the Ocean Protection Council (OPC) determines that
partial removal of an offshore oil structure provides a net
benefit to the environment compared to full removal.
2) Requires the owner or operator of the offshore oil structure
to fund the application costs, which include an Environmental
Impact Report (EIR) according to CEQA guidelines, a
determination by the OPC of the net environmental benefit of
the project, a determination of the cost savings by the State
Lands Commission (SLC), and preparation of a management plan
by DFG. Application costs are not included in the calculation
of cost savings.
3) Requires the first person to file an application to partially
remove an offshore oil structure to pay the startup costs
incurred by DFG or the SLC to implement the program, including
the costs to develop and adopt regulations. This payment of
startup costs will be reimbursed by DFG.
4) Requires that a portion of the cost savings to the applicant
be shared with the state as follows:
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55% of cost savings if the application is transmitted
before January 1, 2017.
65% of cost savings if the application is transmitted
between January 1, 2017 -
January 1, 2023
80% of cost savings if the application is transmitted
after January 1, 2023
5) Requires state revenue from the program be apportioned as
follows: 85% into the California Endowment for Marine
Preservation, 10% into the General Fund, 2% into the Fish and
Game Preservation Fund, 2% into the Coastal Act Services Fund,
and 1% to the board of supervisors of the county immediately
adjacent to the project.
6) Requires DFG to take title and responsibility for management
of the decommissioned offshore oil structure once the partial
removal has been granted final approval by DFG and the
applicant enters into an agreement with the state to indemnify
the state and DFG from liability, to the extent permitted by
law, for any claims against the state for actions the state
undertakes in implementing the program.
PROPOSED LAW
This bill would revise the calculation of cost savings under the
Marine Life Legacy Act and require that air quality impacts be
considered when calculating the net benefit to the marine
environment. Specifically this bill:
1) Requires that all costs to the applicant of participation in
the program be included in the calculation of cost savings
until January 1, 2017.
2) Requires that startup costs paid by the first applicant of
the program be included in the calculation of cost savings,
and that the funds shall not be reimbursed by DFG.
3) Requires the OPC to take impacts to air quality into account
and to consult with the State Air Resources Board when
determining the net environmental benefit of partial removal
compared to full removal of an oil structure.
ARGUMENTS IN SUPPORT
According to the author, clarifications regarding the Marine
Resources Legacy Act are needed to help ensure that the
rigs-to-reefs program operates smoothly, encourages
participation, protects the environment and expands reef habitat
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for marine life along California's coast. Supporters contend it
is appropriate that all actual costs incurred by an applicant to
partially remove an offshore oil structure be considered when
determining the cost savings that must be shared with the state.
They also state that the carbon footprint of partially removing
an oil platform is much less than that of fully removing an oil
platform, and this should be taken into account to honestly
assess all environmental impacts.
ARGUMENTS IN OPPOSITION
None received
COMMENTS
Loss of state revenue
Southern California has 27 offshore oil and gas platforms that
will eventually need decommissioning. Between 2015 and 2030, 23
of the platforms will reach the end of their useful production
lifetimes. In a study completed by the Ocean Science Trust that
evaluated the available options for decommissioning offshore oil
and gas platforms, the estimated cost of complete removal of all
27 offshore platforms was $1.09 billion. Partial removal of
these platforms was estimated at $478 million, with an estimated
cost savings of $616 million (with minor rounding).
The calculation of cost savings for each applicant determines
the amount of funds the applicant will be required to share with
the state. By including costs to the applicant for
participation in the program, this increases the cost for
partial removal of an oil platform and reduces the cost savings,
and therefore the amount of money to be shared with the state.
Although it is not possible to estimate the cost per applicant
to participate in the program because of differences in the
location and size of oil platforms, EIRs for partial removal of
an oil structure can total in the millions of dollars, resulting
in a significant reduction of revenue to the state.
The addition of "air quality" to the list of marine
environmental impacts to be considered by the OPC are estimated
to be approximately $15,000 - $25,000 per air quality audit,
depending on the complexity of the project and how much modeling
would have to be done.
Air Quality
According to the Coastal Conservancy, the potential for air
emissions for any platform removal is large and highly variable
depending on the type of equipment used, the depth of the
platform, and the amount of the platform to be decommissioned.
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Generally speaking, greater emissions are associated with deeper
water (they can be in anywhere from 150 to 1,000 feet of depth)
and a higher percentage of platform removal. A full platform
removal can result in 6.75 times the amount of pollutants
emitted than a partial removal.
SUPPORT
Coalition for Enhanced Marine Resources (co-sponsor)
Sportfishing Conservancy of California (co-sponsor)
California Ships to Reefs
OPPOSITION
None Received
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