Amended in Assembly June 9, 2014

Amended in Senate April 21, 2014

Senate Bill No. 1281

Introduced by Senator Pavley

February 21, 2014

An act to amend Section 3227 of, and to add begin delete Section end delete begin insert Sections 3226.3, end insert 3226.5 begin insert , and 3226.7 end insert to, the Public Resources Code, relating to oil and gas.

LEGISLATIVE COUNSEL’S DIGEST

SB 1281, as amended, Pavley. Oil and gas production: water use begin insert : end insert reporting.

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. Existing law requires the owner of any well to file with the State Oil and Gas Supervisor a monthly statement that provides certain information relating to the well, including what disposition was made of the water produced from each field. Existing law provides that a person who fails to comply with specific laws relating to the regulation of oil or gas operations, including failing to furnish a report or record, is guilty of a misdemeanor.

This bill would declare that it is the policy of the state that oil and gas field exploration, development, and production shall begin delete use end delete begin insert use, end insert or treat and begin delete use end delete begin insert use, end insert water produced though oil field activities and begin insert other end insert recycled water to the extent feasible. begin insert The bill would require, in the event, and duration, of a declared state of emergency because of a drought, new oil and gas field, exploration, development, and production, as defined, to use recycled water and would prohibit the use of water from an unmanaged groundwater basin. end insert The bill would require the monthly statement to the supervisor to include the source and begin delete amount end delete begin insert volume end insert of begin delete fluid or gas injected into each well, as provided, and the source and amount of end delete begin insert any end insert water begin insert reported, including water end insert used to generate begin insert or make up the composition of any end insert injected fluid or gas begin insert , as provided end insert . The bill would also require the statement to include additional information, including the treatment of water and the use of treated or recycled water in oil and gas field activities, as provided. begin insert The bill would require the division, among other things, to use a standardized form or format to facilitate reporting. end insert Because a violation of the bill’s reporting requirements by an owner or operator would be a crime, the bill would impose a state-mandated local program.

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.  

The Legislature finds and declares begin delete both end delete begin insert all end insert of the
following:

(a) Existing state policy promotes the use of recycled water in
industry where feasible.

(b) Water of previously unsuitable quality may now be used or
treated and used in some oil and gas industry processes due to
technological advancement.

begin insert

(c) Information facilitating an analysis of the water used or
produced by each well would improve understanding of water use
in the state’s oil and gas fields.

end insert begin insert

(d) In the event of extreme water scarcity, untreated high-quality
water should not be used for new oil and gas exploration,
development, or production. According to the Department of Water
Resources, groundwater resources throughout the state are at
historically low levels.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 3226.3 is added to the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

begin insert

begin insert 3226.3. end insert   

The division shall annually provide to the State Water
Resources Control Board and the California regional water quality
control boards an inventory of all unlined oil and gas field sumps.

end insert

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

Section 3226.5 is added to the Public Resources Code,
to read:

3226.5.  

It is the policy of the state that oil and gas field
exploration, development, and production shall begin delete use end delete begin insert use, end insert or treat
and begin delete use end delete begin insert use, end insert water produced through oil field activities and begin insert other end insert
recycled water to the extent feasible. The use and reuse of water
initially unsuitable for drinking or irrigation purposes is
encouraged.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 3226.7 is added to the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

begin insert

begin insert 3226.7. end insert   

(a) In the event, and for the duration, of a declared
state of emergency, pursuant to Article 13 (commencing with
Section 8625) of Chapter 7 of Division 1 of Title 2 of the
Government Code, because of a drought, new oil and gas field
exploration, development, and production shall use recycled water,
as defined in subdivision (n) of Section 13050 of the Water Code.

(b) New oil and gas field exploration, development, and
production shall not use water obtained from a groundwater basin
that is not managed in accordance with Division 6 (commencing
with Section 10000) of the Water Code.

(c) For purposes of this section, “new oil and gas field
exploration, development, and production” means any oil field
activity that requires the division to issue a new permit or notice
of intention pursuant Section 3203.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 5. end insert   

Section 3227 of the Public Resources Code is amended
to read:

3227.  

begin insert (a) end insert begin insert   end insert The owner of any well shall file with the supervisor,
on or before the last day of each month, for the last preceding
calendar month, a statement, in the form designated by the
supervisor, showing all of the following:

begin delete

(a)

end delete

begin insert (1) end insert  The amount of oil and gas produced from each well during
the period indicated, together with the gravity of the oil, the amount
of water produced from each well, estimated in accordance with
methods approved by the supervisor, and the number of days during
which fluid was produced from each well.

begin delete

(b)

end delete

begin insert (2) end insert  The number of wells drilling, producing, injecting, or idle,
that are owned or operated by the person.

begin delete

(c)

end delete

begin insert (3) end insert  What disposition was made of the gas produced from each
field, including the names of persons, if any, to whom the gas was
delivered, and any other information regarding the gas and its
disposition that the supervisor may require.

begin delete

(d)

end delete

begin insert (4) end insert  The begin delete source and the end delete amount of fluid or gas injected into each
well used for enhanced recovery, underground storage of
hydrocarbons, or waste water disposal, begin delete including the source and
the amount of water used to generate injected fluid or gas, end delete and any
other information regarding those wells that the supervisor may
require.

begin insert

(5) The source of water, and volume of any water, reported in
paragraph (4), including the water used to generate or make up
the composition of any injected fluid or gas. Water volumes shall
be reported by water source if more than one water source is used.
The volume of untreated water suitable for drinking or irrigation
purposes shall be reported.

end insert begin delete

(e)

end delete

begin insert (6) end insert  The treatment of water and the use of treated or recycled
water in oil and gas field activities, including, but not limited to,
exploration, development, and production.

begin delete

(f)

end delete

begin insert (7) end insert  The specific disposition of all water used in or generated by
oil and gas field activities, including water produced from each
well begin insert reported pursuant to paragraph (1) end insert .

begin delete

Any

end delete

begin insert (b) end insert begin insert   end insert begin insert Any end insert operator that produces oil by the application of mining
or other unconventional techniques shall file a report with the
supervisor, on or before March 1 of each year, showing the amount
of oil produced by those techniques in the preceding calendar year.

begin delete

Upon

end delete

begin insert (c) end insert begin insert   end insert begin insert Upon end insert request and making a satisfactory showing therefor,
a longer filing period may be established by the supervisor for any
particular owner or operator.

begin insert

(d) The division shall use a standardized form or format to
facilitate reporting required pursuant to this section.

end insert begin insert

(e) For purposes of this section, the following terms have the
following meanings:

end insert begin insert

(1) “Source of water” or “water source” means any of the
following:

end insert begin insert

(A) The well or wells, if commingled, from which the water was
produced or extracted.

end insert begin insert

(B) The water supplier, if purchased or obtained from a supplier.

end insert begin insert

(C) The point of diversion of surface water.

end insert begin insert

(2) “Specific disposition of all water” means the identification
of the ultimate specific disposal method or method of recycling or
re-use of the water. This includes, but is not limited to, the
identification of any treatment or recycling method used, injection
of the water into specific injection or disposal well or wells, if
commingled, discharge of the water to surface water or sumps,
and sale or transfer of the water to a named entity. Temporary
on-site storage of water shall not constitute a specific disposition
of water.

end insert begin insert

(3) “Recycled water” has the same meaning as that term is
defined in subdivision (n) of Section 13050 of the Water Code.

end insert

begin delete SEC. 4. end delete
begin insert SEC. 6. end insert   

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.