BILL ANALYSIS �
SB 1281
Page 1
SENATE THIRD READING
SB 1281 (Pavley)
As Amended August 20, 2014
Majority vote
SENATE VOTE :27-3
NATURAL RESOURCES 6-3 APPROPRIATIONS 10-6
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|Ayes:|Chesbro, Garcia, |Ayes:|Gatto, Bocanegra, |
| |Muratsuchi, Skinner, | |Bradford, Campos, Eggman, |
| |Stone, Williams | |Gomez, Holden, Pan, |
| | | |Quirk, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Dahle, Bigelow, Patterson |Nays:|Bigelow, Donnelly, Jones, |
| | | |Linder, Ridley-Thomas, |
| | | |Wagner |
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SUMMARY : Requires the Division of Oil, Gas and Geothermal
Resources (DOGGR) to collect information regarding unlined oil
and gas field sumps. Sets state policy for the use of water in
oil and gas production activities. Specifically, this bill :
1)Requires DOGGR to annually provide an inventory of all unlined
oil and gas field sumps to the State Water Resources Control
Board (SWRCB) and the California regional water quality
control boards.
2)Declares state policy that oil and gas field exploration,
development, and production use water produced through oil
field activities and other recycled water to the extent
feasible. Encourages the use and reuse of water initially
unsuitable for domestic or irrigation purposes.
3)Requires new oil and gas field exploration, development, and
production to use recycled water in the event, and for the
durations, of a declared state of emergency because of
drought. States that recycled water includes water that is
produced from an oil or gas well that has been treated by
separating the water from the oil, gas, or both.
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4)Prohibits new oil and gas field exploration, development, and
production from using water obtained from a groundwater basin
or high priority sub-basin if this use would compromise
existing use for domestic or irrigation purposes pursuant to
state law declaring the use of water for domestic purposes is
the highest use of water and that the next highest use is for
irrigation.
5)Excludes oil fields that produce revenue payable to the State
Lands Commission from the definition of "new oil and gas field
exploration, development, and production."
6)Requires additional information on water used during oil and
gas field activities on the monthly statement filed by an
owner of a well as specified.
7)Makes various findings and declarations.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)One-time costs in the range of at least $1 million from the
Oil, Gas, and Geothermal Administrative Fund over a period of
up to two years for the expansion of the reporting system to
include additional required information.
2)Ongoing costs of $125,000 from the Oil, Gas, and Geothermal
Administrative Fund for the management of the expanded data.
COMMENTS :
Purpose. California is suffering from one of the worst droughts
since it became a state; 2014 is the driest year in terms of
rainfall since 1850.
The author contends the amount of water used in oil and gas
field exploration, development and production is of continuing
and significant public concern. Much of California's oil and
gas production is located in arid parts of the Central Valley
and where existing groundwater may be depleted or under threat
of depletion.
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Current required water use reporting to DOGGR does not provide
sufficient information to understand the sources and uses of
water in the oil and gas fields.
This bill will clarify the use of water in the state's oil and
gas fields.
Background. A report from the California Environmental
Resources Evaluation System (CERES) highlighted groundwater
depletion in some of the principal areas of oil and gas
production in California. Specifically, the report looked at
Kern County, which pumped about three-quarters of California's
oil from over 40,000 conventional oil wells in 2010. Kern
County also has an active agricultural sector with over 800,000
acres of irrigated farmland. Although the county meets demand
through surface and groundwater sources, its strong reliance on
groundwater pumping over the last several decades has resulted
in substantial groundwater declines. Although the oil and
agricultural industries have coexisted for many years in Kern
County, elevated water use for hydraulic fracturing in the
context of massive drought could alter this course. The CERES
states there are growing concerns that the agriculture sector
will find it more lucrative to sell their water for oil
exploration than for growing crops.
Unlined Sumps. According to the Central Valley Regional Water
Board (CVRWB), produced water, which accounts for about 95% of
the fluids produced during oil well production (the other 5% is
oil), was historically disposed of by discharge to dry stream
channels or unlined surface impoundments (sumps). A sump is a
surface impoundment or excavated depression used to separate
crude oil, water, and solids in oil fields.
CVRWB is in the process of reviewing unlined sumps in its
jurisdiction. Many of the sumps are covered by out-of-date
waste discharge requirement permits, and CVRWB is working to
bring these up-to-date, where needed. This bill will require
DOGGR to collect information on unlined sumps, which would help
CVRWB revise these old permits.
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092 FN:
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