Amended in Senate May 27, 2014

Amended in Senate May 6, 2014

Amended in Senate April 21, 2014

Amended in Senate April 10, 2014

Amended in Senate March 27, 2014

Senate Bill No. 1132

Introduced by Senators Mitchell and Leno

(Principal coauthors: Assembly Members Ammiano and Levine)

(Coauthors: Senators Corbett, DeSaulnier, Hancock, Jackson, Lieu, and Wolk)

(Coauthors: Assembly Members Bloom, Chesbro, Gordon, begin insert Skinner, end insert Stone, and Williams)

February 20, 2014

An act to amend Sections 3157 and 3160 of, and to repeal and add Section 3161 of, the Public Resources Code, relating to oil and gas.

LEGISLATIVE COUNSEL’S DIGEST

SB 1132, as amended, Mitchell. Oil and gas: well stimulation treatments.

Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, stimulation, and abandonment of oil and gas wells in the state. The State Oil and Gas Supervisor, or supervisor, supervises the drilling, operation, maintenance, stimulation, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field regarding safety and environmental damage. Existing law requires an operator, prior to performing a well stimulating treatment, as defined, on a well, to obtain approval from the supervisor or district deputy. Under existing law, a person who violates any prohibition specific to the regulation of oil or gas operations is guilty of a misdemeanor.

Existing law requires the Secretary of the Natural Resources Agency, on or before January 1, 2015, to cause to be conducted, and completed, an independent scientific study on well stimulation treatments, including acid well stimulation and hydraulic fracturing treatments. Existing law requires the division to finalize and implement regulations regulating well stimulation treatments by January 1, 2015.

This bill would revise the definition of “well stimulation treatment.” The bill would require the scientific study to be conducted and completed no later than June 30, 2016, and to consider additional elements, including, among other things, evaluating various potential direct, indirect, and cumulative health and environmental effects of onshore and offshore well stimulation and well stimulation treatment-related activities, as specified. The bill would also prohibit all well stimulation treatments until (1) the Secretary of the Natural Resources Agency convenes a committee to review the scientific study, as specified, (2) the Governor issues a determination that specific measures are in place to ensure that well stimulation treatments do not begin delete contribute to the deterioration of environmental conditions in a way that threatens public health and welfare or to the environmental and economic sustainability of the state, end delete begin insert create adverse impacts to public and environmental health or, if the well stimulation treatments result in adverse impacts to public and environmental health, the impacts are identified and sufficiently mitigated to avoid significant adverse impacts to public and environmental health at the local, regional, or statewide level, end insert and (3) the division prepares an environmental impact report, as provided. Because a violation of the bill’s requirements would be a crime, the bill would impose a state-mandated local program. This bill would require the division to finalize the regulations regulating well stimulation treatments by June 30, 2015.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

(a) The Legislature finds and declares all of the
following:

(1) The state has historically failed to appropriately monitor or
track well stimulation activity and to study its effects.

(2) Well stimulation and well stimulation-related activities may
release chemicals, including methanol, crystalline silica dust,
hydrochloric and hydrofluoric acid, xylene, 2-butoxyethanol,
naphthalene, ethylbenzene, 2-propanol, volatile organic
compounds, and particulate matter. These materials may be
released at levels that are harmful and may have an adverse impact
on the state’s air quality and public health and safety. Many parts
of California already suffer from poor air quality.

(3) Well stimulation and well stimulation-related activities can
involve the use of hundreds of chemicals, some of which are known
to be carcinogenic or could otherwise be harmful to human health.

(4) Exposure to the chemicals used in well stimulation and well
stimulation-related activities may pose a widespread and significant
risk to public health and safety and the environment.

(5) Well stimulation and well stimulation-related activities may
involve the use of substantial amounts of freshwater. California is
currently experiencing one of the worst droughts in the state’s
history and faces a scarcity of freshwater resources.

(6) Well stimulation and well stimulation-related activities may
result in the emission of greenhouse gases, such as carbon dioxide
and methane. Furthermore, well stimulation and well
stimulation-related activities may lead to a dramatic increase in
the overall amount of recoverable oil and gas in the state. The
expansion of oil and gas activity and the process of well stimulation
both could threaten to undermine the state’s goal of reducing
greenhouse gas emissions.

(7) The disposal of wastewater resulting from well stimulation
and well stimulation-related activities into underground injection
wells in other states has been linked to increased earthquake
activity.

(8) Fracking and other forms of well stimulation have occurred
disproportionately near communities consisting largely of people
of color, low-income households, non-English-speaking
households, and persons already experiencing high levels of water
or air pollution or water scarcity.

(9) Well stimulation and well stimulation-related activities may
harm wildlife, including species that are protected under federal
and state endangered species laws.

(b) It is the intent of the Legislature in enacting this act to protect
the public health and welfare of the state.

SEC. 2.  

Section 3157 of the Public Resources Code is amended
to read:

3157.  

(a) For purposes of this article, “well stimulation
treatment” means any treatment of a well designed to enhance oil
and gas production or recovery by increasing the permeability of
the formation or the flow of fluid through the well. Well stimulation
treatments include, but are not limited to, hydraulic fracturing
treatments and acid well stimulation treatments.

(b) Well stimulation treatments do not include steam flooding,
water flooding, or cyclic steaming and do not include routine well
cleanout work, routine well maintenance, routine removal of
formation damage due to drilling, bottom hole pressure surveys,
or routine activities that do not affect the integrity of the well or
the formation.

(c) Well stimulation treatments do not include gas storage
projects that are subject to Section 1724.9 of Title 14 of the
California Code of Regulations.

SEC. 3.  

Section 3160 of the Public Resources Code is amended
to read:

3160.  

(a) The Secretary of the Natural Resources Agency shall
cause to be conducted, and completed, no later than June 30, 2016,
an independent scientific study on well stimulation treatments,
including, but not limited to, hydraulic fracturing and acid well
stimulation treatments. The scientific study shall evaluate the
hazards and risks and potential hazards and risks that well
stimulation treatments and well stimulation treatment-related
activities pose to natural resources and public, occupational, and
environmental health and safety. The scientific study shall do all
of the following:

(1) Follow the well-established standard protocols of the
scientific profession, including, but not limited to, the use of
recognized experts, peer review, and publication. The study shall
be based solely on the best available scientific, health,
environmental, and statistical information.

(2) (A) Identify all onshore areas with existing and potential
conventional and unconventional oil and gas reserves and gas
storage projects where well stimulation treatments are likely to
spur or enable oil and gas exploration and production, or gas
storage.

(B) Identify offshore areas, within the jurisdiction of the
division, with existing and potential conventional and
unconventional oil and gas reserves where well stimulation
treatments are likely to spur or enable oil and gas exploration and
production.

(3) (A) Evaluate all aspects and effects of well stimulation
treatments, including, but not limited to, the well stimulation
treatment, additive and water transportation to and from the well
site, mixing, storage, and handling of the well stimulation treatment
fluids and additives onsite, the use and potential for use of nontoxic
additives and the use or reuse of treated or produced water in well
stimulation treatment fluids, and flowback fluids and the handling,
treatment, and disposal of flowback fluids and other materials, if
any, generated by the treatment. Specifically, the potential for the
use of recycled water in well stimulation treatments, including
appropriate water quality requirements and available treatment
technologies, shall be evaluated. Well stimulation treatments
include, but are not limited to, hydraulic fracturing and acid well
stimulation treatments.

(B) Review and evaluate acid matrix stimulation treatments,
including the range of acid volumes applied per treated foot and
total acid volumes used in treatments, types of acids, acid
concentration, and other chemicals used in the treatments.

(C) Evaluate all potential direct, indirect, and cumulative health
and environmental effects of onshore well stimulation treatments
and well stimulation treatment-related activities.

(D) Evaluate all potential direct, indirect, and cumulative health
and environmental effects of offshore well stimulation treatments
and well stimulation treatment-related activities that are within the
jurisdiction of the division.

(E) Evaluate all direct, indirect, and cumulative health and
environmental effects of the full lifecycle of oil and gas
exploration, development, and production, including flowback
fluids and other byproducts that would result from allowing well
stimulation treatments within the state.

(F) Evaluate the extent of the increase in oil and gas
development, refining processes, and end-use combustion that
would result from allowing well stimulation treatments within the
state.

(4) (A) Consider potential water contamination, including
groundwater and surface water, potential depletion of water
resources, potential effects on water sustainability, and the ultimate
disposition, transport, transformation, and toxicology of well
stimulation treatments, including acid well stimulation fluids,
hydraulic fracturing fluids, and waste hydraulic fracturing fluids,
and acid well stimulation in the environment.

(B) Consider surface contamination, potential noise and light
pollution, as well as actual and potential induced seismicity.

(C) Consider atmospheric emissions, including potential
greenhouse gas emissions, the potential degradation of air quality,
and the potential impacts of well stimulation and increased oil and
gas activity on the state’s efforts to meet its greenhouse gas
reduction targets under the California Global Warming Solutions
Act of 2006 (Division 25.5 (commencing with Section 38500) of
the Health and Safety Code).

(5)  Identify and evaluate the geologic features present in the
vicinity of a well, including the well bore, that should be taken
into consideration in the design of a proposed well stimulation
treatment.

(6) Identify and evaluate all of the following, as they relate to
well stimulation:

(A) The potential impacts of well stimulation treatments on
private property, including home values and direct damage to
property and land.

(B) The potential human health risk for each chemical used in
well stimulation treatments.

(C) The potential economic costs and harms of increased oil
and gas operations in the state as a result of well stimulation
treatments, including, but not limited to, the resulting economic
costs to the agricultural sector and the tourism industry.

(D) The potential effects on communities most likely to be
negatively affected by the impacts of well stimulation, including,
but not limited to, all of the following:

(i) Communities consisting largely of people of color.

(ii) Communities consisting largely of low-income individuals.

(iii) Communities consisting largely of non-English-speaking
households.

(iv) Communities already experiencing high levels of water or
air pollution, or water scarcity.

(E) Potential harm to the public health and welfare of the state’s
residents and the state’s environment, both cumulatively and
specific to each region where well stimulation treatments may
occur.

(F) The potential effect of increased traffic due to increased oil
and gas activity as a result of well stimulation treatments, including
air emissions from vehicle traffic, and road expansion and
deterioration.

(G) The potential effect on pipeline infrastructure due to
increased oil and gas activity as a result of well stimulation
treatments, including potential pipeline leakage.

(H) Potential impacts on wildlife, including harm to endangered
or threatened species, native plants, and habitat, including habitat
fragmentation.

(I) Whether existing emergency planning, procedures, and
resources adequately and fully ensure public safety in the event
of an emergency.

(J) Potential risks to worker safety.

(7) Include a hazard assessment and risk analysis addressing
occupational and environmental exposures to well stimulation
treatments, including hydraulic fracturing treatments, hydraulic
fracturing treatment-related processes, acid well stimulation
treatments, acid well stimulation treatment-related processes, and
the corresponding impacts on public health and safety with the
participation of the Office of Environmental Health Hazard
Assessment.

(8) Clearly identify where additional information is necessary
to inform and improve the analyses.

(b) The Secretary of the Natural Resources Agency shall notify
the Joint Legislative Budget Committee and the chairs of the
Assembly Natural Resources, Senate Environmental Quality, and
Senate Natural Resources and Water Committees on the progress
of the independent scientific study on well stimulation and related
activities. The first progress report shall be provided to the
Legislature on or before April 1, 2014, and progress reports shall
continue every four months thereafter until the independent study
is completed, including a peer review of the study by independent
scientific experts.

(c) (1) (A) On or before January 1, 2015, the division, in
consultation with the Department of Toxic Substances Control,
the State Air Resources Board, the State Water Resources Control
Board, the Department of Resources Recycling and Recovery, and
any local air districts and regional water quality control boards in
areas where well stimulation treatments, including acid well
stimulation treatments and hydraulic fracturing treatments may
occur, shall adopt rules and regulations specific to well stimulation
treatments. The rules and regulations shall include, but are not
limited to, revisions, as needed, to the rules and regulations
governing construction of wells and well casings to ensure integrity
of wells, well casings, and the geologic and hydrologic isolation
of the oil and gas formation during and following well stimulation
treatments, and full disclosure of the composition and disposition
of well stimulation fluids, including, but not limited to, hydraulic
fracturing fluids, acid well stimulation fluids, and flowback fluids.

(B) The rules and regulations shall additionally include
provisions for an independent entity or person to perform the
notification requirements pursuant to paragraph (6) of subdivision
(e), for the operator to provide for baseline and followup water
testing upon request as specified in paragraph (7) of subdivision
(e).

(C) (i) In order to identify the acid matrix stimulation treatments
that are subject to this section, the rules and regulations shall
establish threshold values for acid volume applied per treated foot
of any individual stage of the well or for total acid volume of the
treatment, or both, based upon a quantitative assessment of the
risks posed by acid matrix stimulation treatments that exceed the
specified threshold value or values in order to prevent, as far as
possible, damage to life, health, property, and natural resources
pursuant to Section 3106.

(ii) On or before January 1, 2020, the division shall review and
evaluate the threshold values for acid volume applied per treated
foot and total acid volume of the treatment, based upon data
collected in the state, for acid matrix stimulation treatments. The
division shall revise the values through the regulatory process, if
necessary, based upon the best available scientific information,
including the results of the independent scientific study pursuant
to subparagraph (B) of paragraph (3) of subdivision (a).

(2) Full disclosure of the composition and disposition of well
stimulation fluids, including, but not limited to, hydraulic fracturing
fluids and acid stimulation treatment fluids, shall, at a minimum,
include:

(A) The date of the well stimulation treatment.

(B) A complete list of the names, Chemical Abstract Service
(CAS) numbers, and maximum concentration, in percent by mass,
of each and every chemical constituent of the well stimulation
treatment fluids used. If a CAS number does not exist for a
chemical constituent, the well owner or operator may provide
another unique identifier, if available.

(C) The trade name, the supplier, concentration, and a brief
description of the intended purpose of each additive contained in
the well stimulation treatment fluid.

(D) The total volume of base fluid used during the well
stimulation treatment, and the identification of whether the base
fluid is water suitable for irrigation or domestic purposes, water
not suitable for irrigation or domestic purposes, or a fluid other
than water.

(E) The source, volume, and specific composition and
disposition of all water, including, but not limited to, all water
used as base fluid during the well stimulation treatment and
recovered from the well following the well stimulation treatment
that is not otherwise reported as produced water pursuant to Section
3227. Any repeated reuse of treated or untreated water for well
stimulation treatments and well stimulation treatment-related
activities shall be identified.

(F) The specific composition and disposition of all well
stimulation treatment fluids, including waste fluids, other than
water.

(G) Any radiological components or tracers injected into the
well as part of, or in order to evaluate, the well stimulation
treatment, a description of the recovery method, if any, for those
components or tracers, the recovery rate, and specific disposal
information for recovered components or tracers.

(H) The radioactivity of the recovered well stimulation fluids.

(I) The location of the portion of the well subject to the well
stimulation treatment and the extent of the fracturing or other
modification, if any, surrounding the well induced by the treatment.

(d) (1) Through the consultation process described in paragraph
(1) of subdivision (c), the division shall collaboratively identify
and delineate the existing statutory authority and regulatory
responsibility relating to well stimulation treatments and well
stimulation treatment-related activities of the Department of Toxic
Substances Control, the State Air Resources Board, any local air
districts, the State Water Resources Control Board, the Department
of Resources Recycling and Recovery, any regional water quality
control board, and other public entities, as applicable. This shall
specify how the respective authority, responsibility, and notification
and reporting requirements associated with well stimulation
treatments and well stimulation treatment-related activities are
divided among each public entity.

(2) On or before January 1, 2015, the division shall enter into
formal agreements with the Department of Toxic Substances
Control, the State Air Resources Board, any local air districts where
well stimulation treatments may occur, the State Water Resources
Control Board, the Department of Resources Recycling and
Recovery, and any regional water quality control board where well
stimulation treatments may occur, clearly delineating respective
authority, responsibility, and notification and reporting
requirements associated with well stimulation treatments and well
stimulation treatment-related activities, including air and water
quality monitoring, in order to promote regulatory transparency
and accountability.

(3) The agreements under paragraph (2) shall specify the
appropriate public entity responsible for air and water quality
monitoring and the safe and lawful disposal of materials in
landfills, include trade secret handling protocols, if necessary, and
provide for ready public access to information related to well
stimulation treatments and related activities.

(4) Regulations, if necessary, shall be revised appropriately to
incorporate the agreements under paragraph (2).

(e) (1) Notwithstanding any other law or regulation, prior to
performing a well stimulation treatment, the operator shall apply
for a permit to perform a well stimulation treatment with the
supervisor or district deputy. The well stimulation treatment permit
application shall contain the pertinent data the supervisor requires
on printed forms supplied by the division or on other forms
acceptable to the supervisor. The information provided in the well
stimulation treatment permit application shall include, but is not
limited to, the following:

(A) The well identification number and location.

(B) The time period during which the well stimulation treatment
is planned to occur.

(C) A water management plan that shall include all of the
following:

(i) An estimate of the amount of water to be used in the
treatment. Estimates of water to be recycled following the well
stimulation treatment may be included.

(ii) The anticipated source of the water to be used in the
treatment.

(iii) The disposal method identified for the recovered water in
the flowback fluid from the treatment that is not produced water
included in the statement pursuant to Section 3227.

(D) A complete list of the names, Chemical Abstract Service
(CAS) numbers, and estimated concentrations, in percent by mass,
of each and every chemical constituent of the well stimulation
fluids anticipated to be used in the treatment. If a CAS number
does not exist for a chemical constituent, the well owner or operator
may provide another unique identifier, if available.

(E) The planned location of the well stimulation treatment on
the well bore, the estimated length, height, and direction of the
induced fractures or other planned modification, if any, and the
location of existing wells, including plugged and abandoned wells,
that may be impacted by these fractures and modifications.

(F) A groundwater monitoring plan. Required groundwater
monitoring in the vicinity of the well subject to the well stimulation
treatment shall be satisfied by one of the following:

(i) The well is located within the boundaries of an existing oil
or gas field-specific or regional monitoring program developed
pursuant to Section 10783 of the Water Code.

(ii) The well is located within the boundaries of an existing oil
or gas field-specific or regional monitoring program developed
and implemented by the well owner or operator meeting the model
criteria established pursuant to Section 10783 of the Water Code.

(iii) Through a well-specific monitoring plan implemented by
the owner or operator meeting the model criteria established
pursuant to Section 10783 of the Water Code, and submitted to
the appropriate regional water board for review.

(G) The estimated amount of treatment-generated waste
materials that are not reported in subparagraph (C) and an identified
disposal method for the waste materials.

(2) (A) At the supervisor’s discretion, and if applied for
concurrently, the well stimulation treatment permit described in
this section may be combined with the well drilling and related
operation notice of intent required pursuant to Section 3203 into
a single combined authorization. The portion of the combined
authorization applicable to well stimulation shall meet all of the
requirements of a well stimulation treatment permit pursuant to
this section.

(B) Where the supervisor determines that the activities proposed
in the well stimulation treatment permit or the combined
authorization have met all of the requirements of Division 13
(commencing with Section 21000), and have been fully described,
analyzed, evaluated, and mitigated, no additional review or
mitigation shall be required.

(C) The time period available for approval of the portion of the
combined authorization applicable to well stimulation is subject
to the terms of this section, and not Section 3203.

(3) (A) The supervisor or district deputy shall review the well
stimulation treatment permit application and may approve the
permit if the application is complete. An incomplete application
shall not be approved.

(B) A well stimulation treatment or repeat well stimulation
treatment shall not be performed on any well without a valid permit
that the supervisor or district deputy has approved.

(C) In considering the permit application, the supervisor or
district deputy shall evaluate the quantifiable risk of the well
stimulation treatment.

(4) The well stimulation treatment permit shall expire one year
from the date that the permit is issued.

(5) Within five business days of issuing a permit to perform a
well stimulation treatment, the division shall provide a copy of the
permit to the appropriate regional water quality control board or
boards and to the local planning entity where the well, including
its subsurface portion, is located. The division shall also post the
permit on the publicly accessible portion of its Internet Web site
within five business days of issuing a permit.

(6) (A) It is the policy of the state that a copy of the approved
well stimulation treatment permit and information on the available
water sampling and testing be provided to every tenant of the
surface property and every surface property owner or authorized
agent of that owner whose property line location is one of the
following:

(i) Within a 1,500 foot radius of the wellhead.

(ii) Within 500 feet from the horizontal projection of all
subsurface portions of the designated well to the surface.

(B) (i) The well owner or operator shall identify the area
requiring notification and shall contract with an independent entity
or person who is responsible for, and shall perform, the notification
required pursuant to subparagraph (A).

(ii) The independent entity or person shall identify the
individuals notified, the method of notification, the date of the
notification, and a list of those notified, and shall provide this
information to the division.

(iii) The performance of the independent entity or person shall
be subject to review and audit by the division.

(C) A well stimulation treatment shall not commence before 30
calendar days after the permit copies pursuant to subparagraph (A)
are provided.

(7) (A) A property owner notified pursuant to paragraph (6)
may request water quality sampling and testing from a designated
qualified contractor on any water well suitable for drinking or
irrigation purposes and on any surface water suitable for drinking
or irrigation purposes as follows:

(i) Baseline measurements prior to the commencement of the
well stimulation treatment.

(ii) Followup measurements after the well stimulation treatment
on the same schedule as the pressure testing of the well casing of
the treated well.

(B) The State Water Resources Control Board shall designate
one or more qualified independent third-party contractor or
contractors that adhere to board-specified standards and protocols
to perform the water sampling and testing. The well owner or
operator shall pay for the sampling and testing. The sampling and
testing performed shall be subject to audit and review by the State
Water Resources Control Board or an applicable regional water
quality control board, as appropriate.

(C) The results of the water testing shall be provided to the
division, appropriate regional water quality control board, and the
property owner or authorized agent. A tenant notified pursuant to
paragraph (6) shall receive information on the results of the water
testing to the extent authorized by his or her lease and, where the
tenant has lawful use of the groundwater or surface water identified
in subparagraph (A), the tenant may independently contract for
similar groundwater or surface water testing.

(8) The division shall retain a list of the entities and property
owners notified pursuant to paragraphs (5) and (6).

(9) The operator shall provide notice to the division at least 72
hours prior to the actual start of the well stimulation treatment in
order for the division to witness the treatment.

(f) If a well stimulation treatment is performed, a supplier that
performs any part of the treatment or provides additives directly
to the operator for a well stimulation treatment shall furnish the
operator with information suitable for public disclosure needed
for the operator to comply with subdivision (g). This information
shall be provided as soon as possible but no later than 30 days
following the conclusion of the well stimulation treatment.

(g) (1) Within 60 days following cessation of a well stimulation
treatment, the operator shall post or cause to be posted to an
Internet Web site, designated or maintained by the division and
accessible to the public, all of the well stimulation fluid
composition and disposition information required to be collected
pursuant to the rules and regulations adopted under subdivision
(c), including well identification number and location. This shall
include the collected water quality data, which the operator shall
report electronically to the State Water Resources Control Board.

(2) (A) The division shall develop an Internet Web site for
operators to report the information required under this section. The
Internet Web site shall be capable of organizing the reported
information in a format, such as a spreadsheet, that allows the
public to easily search and aggregate, to the extent practicable,
each type of information required to be collected pursuant to
subdivision (c) using search functions on that Internet Web site.
The Internet Web site shall be functional within two years of the
Department of Technology’s approval of a feasibility study report
or appropriation authority to fund the development of the Internet
Web site, whichever occurs latest, but no later than January 1,
2016.

(B) The division may direct reporting to an alternative Internet
Web site developed by the Ground Water Protection Council and
the Interstate Oil and Gas Compact Commission in the interim
until approval or appropriate authority pursuant to subparagraph
(A) occur. Prior to the implementation of the division’s Internet
Web site, the division shall obtain the data reported by operators
to the alternative Internet Web site and make it available in an
organized electronic format to the public no later than 15 days
after it is reported to the alternative Internet Web site.

(h) The operator is responsible for compliance with this section.

(i) (1) All geologic features within a distance reflecting an
appropriate safety factor of the fracture zone for well stimulation
treatments that fracture the formation and that have the potential
to either limit or facilitate the migration of fluids outside of the
fracture zone shall be identified and added to the well history.
Geologic features include seismic faults identified by the California
Geologic Survey.

(2) For the purposes of this section, the “fracture zone” is
defined as the volume surrounding the well bore where fractures
were created or enhanced by the well stimulation treatment. The
safety factor shall be at least five and may vary depending upon
geologic knowledge.

(3) The division shall review the geologic features important to
assessing well stimulation treatments identified in the independent
study pursuant to paragraph (5) of subdivision (a). Upon
completion of the review, the division shall revise the regulations
governing the reporting of geologic features pursuant to this
subdivision accordingly.

(j) (1) Public disclosure of well stimulation treatment fluid
information claimed to contain trade secrets is governed by Section
1060 of the Evidence Code, or the Uniform Trade Secrets Act
(Title 5 (commencing with Section 3426) of Part 1 of Division 4
of the Civil Code), and the California Public Records Act (Chapter
3.5 (commencing with Section 6250) of Division 7 of Title 1 of
the Government Code).

(2) Notwithstanding any other law or regulation, none of the
following information shall be protected as a trade secret:

(A) The identities of the chemical constituents of additives,
including CAS identification numbers.

(B) The concentrations of the additives in the well stimulation
treatment fluids.

(C) Any air or other pollution monitoring data.

(D) Health and safety data associated with well stimulation
treatment fluids.

(E) The chemical composition of the flowback fluid.

(3) If a trade secret claim is invalid or invalidated, the division
shall release the information to the public by revising the
information released pursuant to subdivision (g). The supplier shall
notify the division of any change in status within 30 days.

(4) (A) If a supplier believes that information regarding a
chemical constituent of a well stimulation fluid is a trade secret,
the supplier shall nevertheless disclose the information to the
division in conjunction with a well stimulation treatment permit
application, if not previously disclosed, within 30 days following
cessation of well stimulation on a well, and shall notify the division
in writing of that belief.

(B) A trade secret claim shall not be made after initial disclosure
of the information to the division.

(C) To comply with the public disclosure requirements of this
section, the supplier shall indicate where the trade secret
information has been withheld and provide substitute information
for public disclosure. The substitute information shall be a list, in
any order, of the chemical constituents of the additive, including
CAS identification numbers. The division shall review and approve
the supplied substitute information.

(D) This subdivision does not permit a supplier to refuse to
disclose the information required pursuant to this section to the
division.

(5) In order to substantiate the trade secret claim, the supplier
shall provide information to the division that shows all of the
following:

(A) The extent to which the trade secret information is known
by the supplier’s employees, and others involved in the supplier’s
business and outside the supplier’s business.

(B) The measures taken by the supplier to guard the secrecy of
the trade secret information.

(C) The value of the trade secret information to the supplier and
its competitors.

(D) The amount of effort or money the supplier expended
developing the trade secret information and the ease or difficulty
with which the trade secret information could be acquired or
duplicated by others.

(6) If the division determines that the information provided in
support of a request for trade secret protection pursuant to
paragraph (5) is incomplete, the division shall notify the supplier
and the supplier shall have 30 days to complete the submission.
An incomplete submission does not meet the substantive criteria
for trade secret designation.

(7) If the division determines that the information provided in
support of a request for trade secret protection does not meet the
substantive criteria for trade secret designation, the department
shall notify the supplier by certified mail of its determination. The
division shall release the information to the public, but not earlier
than 60 days after the date of mailing the determination, unless,
prior to the expiration of the 60-day period, the supplier obtains
an action in an appropriate court for a declaratory judgment that
the information is subject to protection or for a preliminary
injunction prohibiting disclosure of the information to the public
and provides notice to the division of the court order.

(8) The supplier is not required to disclose the trade secret
information to the operator.

(9) Upon receipt of a request for the release of trade secret
information to the public, the following procedure applies:

(A) The division shall notify the supplier of the request in
writing by certified mail, return receipt requested.

(B) The division shall release the information to the public, but
not earlier than 60 days after the date of mailing the notice of the
request for information, unless, prior to the expiration of the 60-day
period, the supplier obtains an action in an appropriate court for a
declaratory judgment that the information is subject to protection
or for a preliminary injunction prohibiting disclosure of the
information to the public and provides notice to the division of
that action.

(10) The division shall develop a timely procedure to provide
trade secret information in the following circumstances:

(A) To an officer or employee of the division, the state, local
governments, including, but not limited to, local air districts, or
the United States, in connection with the official duties of that
officer or employee, to a health professional under any law for the
protection of health, or to contractors with the division or other
government entities and their employees if, in the opinion of the
division, disclosure is necessary and required for the satisfactory
performance of a contract, for performance of work, or to protect
health and safety.

(B) To a health professional in the event of an emergency or to
diagnose or treat a patient.

(C) In order to protect public health, to any health professional,
toxicologist, or epidemiologist who is employed in the field of
public health and who provides a written statement of need. The
written statement of need shall include the public health purposes
of the disclosure and shall explain the reason the disclosure of the
specific chemical and its concentration is required.

(D) A health professional may share trade secret information
with other persons as may be professionally necessary, in order to
diagnose or treat a patient, including, but not limited to, the patient
and other health professionals, subject to state and federal laws
restricting disclosure of medical records including, but not limited
to, Chapter 2 (commencing with Section 56.10) of Part 2.6 of
Division 1 of the Civil Code.

(E) For purposes of this paragraph, “health professional” means
any person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions
Code, the Osteopathic Initiative Act, the Chiropractic Initiative
Act, or the Emergency Medical Services System and the
Prehospital Emergency Medical Care Personnel Act (Division 2.5
(commencing with Section 1797) of the Health and Safety Code).

(F) A person in possession of, or with access to, confidential
trade secret information pursuant to the provisions of this
subdivision may disclose this information to any person who is
authorized to receive it. A written confidentiality agreement shall
not be required.

(k) A well granted confidential status pursuant to Section 3234
shall not be required to disclose well stimulation treatment fluid
information pursuant to subdivision (g) until the confidential status
of the well ceases. Notwithstanding the confidential status of a
well, it is public information that a well will be or has been subject
to a well stimulation treatment.

(l) The division shall perform random periodic spot check
inspections to ensure that the information provided on well
stimulation treatments is accurately reported, including that the
estimates provided prior to the commencement of the well
stimulation treatment are reasonably consistent with the well
history.

(m) Where the division shares jurisdiction over a well or the
well stimulation treatment on a well with a federal entity, the
division’s rules and regulations shall apply in addition to all
applicable federal laws and regulations.

(n) This article does not relieve the division or any other agency
from complying with any other provision of existing laws,
regulations, and orders.

(o) Well stimulation treatments used for routine maintenance
of wells associated with underground storage facilities where
natural gas is injected into and withdrawn from depleted or partially
depleted oil or gas reservoirs pursuant to subdivision (a) of Section
3403.5 are not subject to this section.

(p) The division shall finalize the regulations governing this
article on or before June 30, 2015.

SEC. 4.  

Section 3161 of the Public Resources Code is repealed.

SEC. 5.  

Section 3161 is added to the Public Resources Code,
to read:

3161.  

(a) All well stimulation treatments shall be prohibited
until the scientific study pursuant to Section 3160 is completed
and all of the requirements of this section are met.

(b) No later than six months after the scientific study is
complete, the Secretary of the Natural Resources Agency shall
convene a committee to review the scientific study. The committee
shall include a representative from all of the following:

(1) The Natural Resources Agency.

(2) The California Environmental Protection Agency.

(3) The State Air Resources Board.

(4) The State Water Resources Control Board.

(5) The State Department of Public Health.

(c) (1) After reviewing the scientific study as required under
subdivision (b), the committee shall issue a tentative report,
available to the public, evaluating the scientific study using the
best scientific, health, environmental, and statistical information
available, that shall include, but is not limited to, all of the
following findings:

(A) Whether the scientific study is based solely on the best
scientific, health, environmental, and statistical information
available, and meets all of the requirements of subdivision (a) of
Section 3160.

(B) Whether the regulations adopted pursuant to subdivision
(c) of Section 3160 are sufficient to ensure that the begin delete damage and end delete
risks associated with well stimulation treatments, and the increased
oil and gas development as a result of these treatments, do not
begin delete contribute to the deterioration of environmental conditions in a
way that threatens public health and welfare or the environmental
and economic sustainability of the state. end delete begin insert create adverse impacts
to public and environmental health or, if the well stimulation
treatments result in adverse impacts to public and environmental
health, the impacts are identified and sufficiently mitigated to
avoid significant adverse impacts to public and environmental
health at the local, regional, or statewide level. end insert

(C) Whether there are measures in place to ensure that well
stimulation treatments, and the increased oil and gas development
as a result of these treatments, will not impede progress for
achieving the greenhouse gas reduction targets under the California
Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code).

(D) Whether other specific measures are in place to ensure that
well stimulation treatments within the state do not begin delete contribute to
the deterioration of environmental conditions in a way that
threatens public health and welfare or the environmental and
economic sustainability of the state. end delete begin insert create adverse impacts to
public and environmental health or, if the well stimulation
treatments result in adverse impacts to public and environmental
health, the impacts are identified and sufficiently mitigated to
avoid significant adverse impacts to public and environmental
health at the local, regional, or statewide level. end insert

(2) The public shall have 60 days to submit comments to the
committee regarding the tentative report and the committee shall
give full consideration to all of the comments received.

(3) (A) If the findings in the report conclude that well
stimulation treatments begin delete contribute to the deterioration of
environmental conditions in a way that threatens public health and
welfare or to the environmental and economic sustainability of the
state, end delete begin insert create adverse impacts to public and environmental health
or, if the well stimulation treatments result in adverse impacts to
public and environmental health, the impacts are identified and
not sufficiently mitigated to avoid significant adverse impacts to
public and environmental health at the local, regional, or statewide
level, end insert the committee may require an additional study to address
any areas of concern and the prohibition on well stimulation
treatments pursuant to subdivision (a) shall remain in effect.

(B) If the findings in the report conclude that well stimulation
treatments do not begin delete contribute to the deterioration of environmental
conditions in a way that threatens public health and welfare or to
the environmental and economic sustainability of the state, end delete begin insert create
adverse impacts to public and environmental health or, if the well
stimulation treatments result in adverse impacts to public and
environmental health, the impacts are identified and sufficiently
mitigated to avoid significant adverse impacts to public and
environmental health at the local, regional, or statewide level, end insert the
committee shall certify the report as final.

(d) Upon certification by the committee, the report shall be
provided to the Governor and the appropriate committees of the
Legislature.

(e) (1) Upon receipt of the report, the Governor shall make a
determination as to whether specific measures are in place to ensure
that well stimulation treatments within the state do not begin delete contribute
to the deterioration of environmental conditions in a way that
threatens public health and welfare or to the environmental and
economic sustainability of the state, end delete begin insert create adverse impacts to
public and environmental health or, if the well stimulation
treatments result in adverse impacts to public and environmental
health, the impacts are identified and sufficiently mitigated to
avoid significant adverse impacts to public and environmental
health at the local, regional, or statewide level, end insert and shall provide
specific findings of this determination to the Legislature.

(2) If the Governor’s determination concludes that there are not
specific measures in place as described in paragraph (1), the
prohibition on well stimulation treatments pursuant to subdivision
(a) shall remain in effect.

(3) If the Governor’s determination concludes that there are
specific measures in place as described in paragraph (1), the
prohibition of well stimulation treatments pursuant to subdivision
(a) shall end on the date provided in subdivision (g).

(f) (1) The division shall prepare an environmental impact
report (EIR) pursuant to the California Environmental Quality Act
(Division 13 (commencing with Section 21000)), in order to
provide the public with detailed information regarding any potential
environmental impacts of well stimulation in the state.

(2) Any environmental review conducted by the division shall
fully comply with all of the following requirements:

(A) The EIR shall be certified by the division as the lead agency,
no later than July 1, 2015.

(B) The EIR shall address the issue of activities that may be
conducted as defined in Section 3157 and that may occur at oil
wells in the state existing prior to, and after, the effective date of
this section.

(C) The EIR shall not conflict with an EIR conducted by a local
lead agency that is certified on or before July 1, 2015. This
subparagraph does not prohibit a local lead agency from conducting
its own EIR.

(g) (1) This section shall become inoperative 90 days after the
date the Governor issues a determination pursuant to paragraph
(3) of subdivision (e).

(2) This section shall be repealed on January 1 immediately
following the date it becomes inoperative under paragraph (1).

(h) This section does not impair or infringe any existing property
rights or interests.

(i) The division shall not approve as complete any Interim Well
Stimulation Treatment Notice forms, or make any other approval
to authorize a well stimulation treatment, on or after January 1,
2015.

(j) This section does not preempt a local government’s land use
authority to regulate or prohibit oil and gas operations, including
well stimulation treatments and related activities.

SEC. 6.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.