BILL ANALYSIS �
AB 2678
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 2678
AUTHOR: Ridley-Thomas
AMENDED: August 22, 2014
FISCAL: Yes HEARING DATE: August 28,
2014
URGENCY: No CONSULTANT: Karen Morrison
SUBJECT : OIL SPILLS: OIL SPILL PREVENTION AND RESPONSE
SUMMARY :
Existing law :
1) Under the Lempert-Keene-Seastrand Oil Spill Prevention and
Response Act of 1990 (Government Code (GOV) �8670.1 et
seq., and others), created the Office of Spill Prevention
and Response (OSPR) in the Department of Fish and Wildlife
(DFW) and required the OSPR administrator to direct
prevention, removal, abatement, response, containment, and
cleanup efforts with regard to all aspects of any oil spill
in marine waters of the state.
2) Under the Natural Resources Trailer Bill (SB 861, Chapter
35, Statutes of 2014), extended OSPR's current program to
direct prevention, removal, abatement, response,
containment, and cleanup efforts of any oil spill in all
waters of the state by imposing a fee on all imported crude
oil and petroleum products. SB 861 went into effect on
July 1, 2014. In particular, SB 861:
a) Allowed OSPR to adopt emergency regulations to
implement the expanded program. (GOV �8670.7.5)
b) Broadened requirements for oil spill contingency
plans for marine facilities to all facilities, and
required oil spill contingency plans for railroads to
contain specified information, as permitted under
federal law. (GOV �8670.29)
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c) Eliminated the sunset for the 6.5 cent per barrel fee
and expands the fee to crude oil and petroleum products
that pass over, across, under, or through all waters of
the state. (GOV �8670.40)
d) Stipulated that the provisions of the chapter are
severable. (GOV �8670.95)
This bill :
1) Requires OSPR to promulgate regulations by July 1, 2016 to
address the expansion of the program to all waters of the
state. (GOV �8670.7.5)
2) Requires OSPR to identify environmentally sensitive areas
and environmental sites requiring special protection and
describe protection strategies. (GOV �8670.29)
3) Replaces requirements for oil spill contingency plans at
facilities with a general provision for vessels in the
operational control of a facility for loading and
unloading. (GOV �8670.29)
4) Describes the intent of the Legislature to only collect the
fee on crude oil or petroleum products once. (GOV �8670.40)
5) Specifies that the fee on imported petroleum products shall
be collected at marine terminals and refineries, and that
the fee on crude oil shall be collected at refineries. (GOV
�8670.40)
6) Declares that this chapter should be interpreted and
implemented so as not to conflict with federal law or make
the entry of a train meeting federal requirements
contingent upon meeting the requirements of this chapter.
(GOV �8670.95)
7) Declares that every sentence, clause, word, and provision
of this chapter is severable if any portion is found to be
unconstitutional, preempted by federal law, or otherwise
invalidated. (GOV �8670.95)
COMMENTS :
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1) Referral to the Committee pursuant to Senate Rule 29.10(b) .
AB 2678 was originally introduced by Assembly Member
Ridley-Thomas on February 21, 2014, as a measure addressing
the Oil Spill Technical Advisory Committee. The bill, in
this form, passed out of the Assembly on May 23, 2014 on a
vote of 72-0. AB 2678 was then heard in the Senate
Committee on Natural Resources and Water, where it passed
out 8-0.
On August 22, 2014, Senate floor amendments changed the
subject of the bill to oil spill prevention and response.
Consistent with Senate Rule 29.10(b) the Senate Rules
Committee has referred the amended bill to the Senate
Environmental Quality Committee for a hearing of the Senate
amendments.
2) Transportation of oil . OSPR states that in 2012, 65% of
California's crude oil supply arrived by tankers
originating from Alaska or overseas. The remaining 35% was
supplied by pipeline within California.
With the expansion of oil drilling in the Baaken region of
North Dakota and the Tar Sands in Canada, and the
subsequent transportation of crude oil by train, a shift is
occurring in the source of California oil imports. OSPR
states that in the future, around 25% of California's crude
oil supply would arrive by rail. This would be accompanied
by a dramatic reduction in the amount of oil arriving by
tanker (43% predicted supply).
3) Crude oil transportation by rail . The rapid expansion of
crude oil transportation by rail, coupled with a series of
derailments and explosions over the past year, has raised
concerns about the safety of rail transport of hazardous
materials.
Train accidents involving large crude oil spills resulting in
large fires and explosions have made headlines in the past
year. According to data from the Pipeline and Hazardous
Materials Safety Administration (PHMSA), the amount of
crude oil spilled from rail cars in 2013 exceeded that
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spilled in the preceding four decades. In 2013, 1.15
million gallons of crude oil were spilled, compared with
about 800,000 gallons spilled from rail cars between 1975
and 2012.
One of the most serious of these recent accidents was the
Lac-M�gantic derailment that occurred in the town of
Lac-M�gantic in Canada on July 6, 2013. In this accident,
a 74-car freight train carrying crude oil from the Bakken
formation derailed in the downtown area, killing 47 people
and destroying more than 30 buildings when multiple tank
cars exploded and burned. In addition, the Chaudi�re River
was contaminated by 26,000 gallons of crude oil.
4) OSPR Trailer Bill Cleanup . In response to the growing
concern about oil entering California by rail, SB 861
(Chapter 35, Statutes of 2014) extended the OSPR program to
response in all waters of the state by expanding the fee to
all crude oil and petroleum products entering California.
As OSPR began to develop emergency regulations to implement
the provisions of the bill, several concerns were raised
regarding the language in SB 861. As a result, this bill
aims to clarify the provisions of SB 861.
a) Regulations . SB 861 significantly expanded the
authority of OSPR. Although the emergency regulations
are expected to be finalized by the end of the year, it
was unclear as to when the final regulations needed to
be complete. A clear deadline for final regulations
alleviates this concern.
b) Federal preemption . The federal government highly
regulates rail transportation throughout the United
States and preempts state laws and regulations in
several areas. SB 861 contained several provisions that
could be interpreted to conflict with federal law. This
bill aims to clarify that state law is designed to
coordinate with federal law by stating legislative
intent.
c) Oil spill contingency plans for vessels . SB 861
expanded requirements for oil spill contingency plans
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from marine facilities to all facilities (including rail
facilities). However, many of these provisions are
preempted by federal law or covered by other federal and
state laws. As a result, this bill eliminates that
language and instead specifies that plans should include
provisions for vessels that are in the operational
control of the facility for loading and unloading.
d) Double collection of fees . SB 861 expanded the fee
collection site from marine terminals to refineries in
order to capture crude oil and petroleum products
entering the state (such as by rail) or extracted within
California. In cases where crude oil first arrived at a
marine terminal and was then delivered to a refinery,
the language could be interpreted to describe a process
for double-billing on the same oil. This bill seeks to
clarify that crude oil or petroleum products will only
be billed once after they enter California.
5) Policy concerns . The bill covers crude oil and petroleum
products that enter California or are extracted within the
state. Should the ban on oil exportation from the United
States ever be lifted, the Legislature may want to revisit
this language to include the exportation of oil that
crosses waters of the state in order to ensure a
comprehensive prevention and response program for oil
spills in California.
SOURCE : Natural Resources Agency
SUPPORT : Unknown
OPPOSITION : BNSF Railway Company
Union Pacific Railroad Company