BILL ANALYSIS �
SB 1319
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: SB 1319
AUTHOR: Pavley
AMENDED: April 21, 2014
FISCAL: Yes HEARING DATE: April 30, 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):
a) Created the Office of Spill Prevention and Response
(OSPR) in the Department of Fish and Wildlife (DFW).
b) Requires 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.
c) Established the Oil Spill Prevention and
Administrative Fund (OSPAF) and the Oil Spill Response
Trust Fund (OSRTF) to pay for OSPR activities.
d) Created the Oil Spill Technical Advisory Committee
(TAC) to provide recommendations to the OSPR
administrator and other specified state entities
regarding implementation of the act.
e) Established the Oiled Wildlife Care Network (OWCN) to
create a network of rescue and rehabilitation stations
for sea birds, sea otters, and other marine mammals.
The OWCN also focuses on proactive oiled wildlife search
and collection rescue efforts.
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f) Requires the Office of Emergency Services (OES) to be
contacted in the event of an oil spill.
2) Under the California Emergency Services Act (Gov �8550 et
seq.), established OES. OES is responsible for:
a) Coordinating response to major disasters in support
of local Government.
b) Assuring the state's readiness to respond to and
recover from all hazards (natural, manmade, war-caused
emergencies and disasters).
c) Assisting local Governments in their emergency
preparedness, response, recovery, and hazard mitigation
efforts.
3) Under the National Oil and Hazardous Substances Pollution
Contingency Plan (NCP, 40 CFR 300), requires the federal
Government to:
a) Develop a national and regional response capability
for spills from oil or other hazardous substances.
b) Promote overall coordination among the hierarchy of
emergency response organizations and response or
contingency plans.
4) Under regulations developed by the federal Pipeline and
Hazardous Materials Safety Administration (49 U.S.C.
Chapter 51) for hazardous materials transportation and
inspection of shipments by rail:
a) Requires hazardous shipments to be inspected when
they are accepted for transportation or placed in a
train in conjunction with other routine inspections.
b) Allows states to develop and enforce their own
hazardous regulatory scheme as long as the regulation is
consistent with federal law.
This bill :
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1) Removes the current sunset date for the 6.5[ fee and allows
OSPR to increase the fee if necessary. Fee collection is
expanded to include crude oil deliveries at refineries.
(Gov �8670.40)
2) Extends OSPR's current program, which is focused on marine
oil spills, to all waters of the state, inland oil spills.
a) Requires OSPR to revise its oil spill contingency
plan for oil spills of any quantity in waters of the
state by January 1, 2017.
b) Revises the definition of oil spill to a spill of any
amount into waters of the state.
c) Requires OSPR to consider public health impacts in
developing its contingency plans.
d) Allows funds from the OSRTF to be used for an oil
spill in any waters of the state.
e) Expands the jurisdiction of OSPR to include
facilities associated with rail transport of crude oil
and revises the definition of mobile transfer units to
incorporate truck activity beyond service at marine
terminals, as specified. All facilities are required to
obtain Certificates of Financial Responsibility.
f) Provides for additional agencies that can participate
in oil spill response and cleanup.
g) Requires oil spill contingency plans to be approved
within 30 days, and, if rejected, resubmitted within 30
days.
3) Requires the development of a risk-based monitoring program
for non-vessel handling and transport of oil and
establishes regulations to provide best achievable
protection. (Gov �8670.32.5)
4) Requires the review of the preparedness of unified program
agencies every five years. (Gov �8670.35)
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5) Provides for the administrator to ask for up to $2.5
million of the OSPAF to be used for the OWCN annually for
appropriation through the budget. (Gov �8670.40.5)
6) Expands the TAC to include individuals with expertise in
train transportation and requires the TAC to monitor modes
of crude oil transportation and the composition of crude
oil. (Gov �8670.54)
7) Requires enhanced reporting of crude oil movements and
establishes state policy that local communities be notified
about crude oil transport to the extent allowable by
federal law. (Gov ��8670.29 and 8670.90)
COMMENTS :
1) Purpose of Bill . According to the author, "Significant
shifts in the mode of transportation of crude oil into and
within California are expected to occur in the near future.
[?] This shift in transportation mode - with an
accompanying shift in the source of the oil being refined
in the state - means that the nature of the risks
associated with oil spills as well as the likely locations
of spills is also changing. It is time to update
California's oil spill preparation, prevention and
response.
"SB 1319 incorporates the Brown Administration's proposal
through the budget process to expand the
Lempert-Keene-Seastrand Oil Spill Prevention and Response
Act to all waters of the state and all modes of oil
transportation."
2) Background on OSPR . Two major crude oil spills from
tankers influenced state law for emergency response
following marine oil spills: the Exxon Valdez spill in
Alaska on March 24, 1989, and the American Trader spill
near Huntington Beach on February 7, 1990. As a result,
the Legislature passed the Lempert-Keene-Seastrand Oil
Spill Prevention and Response Act in 1990. This Act covers
all aspects of marine oil spill prevention and response in
California. In 1991 the Office of Spill Prevention and
Response (OSPR) opened, headed by the Administrator.
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When a spill occurs, OSPR deploys a field response team of
wardens, environmental specialists, and oil spill
prevention specialists to evaluate the incident and direct
response efforts. When there is not an ongoing incident,
OSPR collaborates with other organizations to develop oil
spill contingency plans. OSPR also conducts drills and
exercises to promote readiness in the event of a spill.
Although OSPR has authority to respond to marine oil spills
and inland oil spills near state water, it can only use
money from the OSPAF to respond to marine spills. If an
inland spill occurs in an area distant from state waters,
the primary responsible agencies are OES and DFW, although
neither agency has a dedicated fund for oil spill response
and cleanup.
3) Funding for OSPR . OSPR is funded by a per-barrel fee on
any oil delivered at marine terminals within the state and
a fee on non-tank vessels. The per-barrel fee has varied
over the years, but currently the cap is 6.5[. After
January 1, 2015, the fee will return to 5[.
OSPR has recently faced challenges of rising costs to
maintaining protection from oil spills, inflation, and
changes in how oil enters California (see comment 6). DFW
estimates that the OSPAF already has a $2-3 million
structural deficit. This deficit will be intensified
following the fee sunset; DFW projects a 47% decline in
annual revenue by 2016.
4) Budget change proposal . The Brown Administration has
proposed significant changes to the existing oil spill
prevention and response program through the FY 2014-15
Budget to address the expected increase of crude oil
transport by rail. The proposed DFW Budget Change Proposal
(BCP) expands the current oil spill prevention and response
program focused on marine waters inland to include all
waters of the state. The Administration's proposal would
require the implementation of a statewide inland oil spill
program encompassing oil-related facilities and oil
transporters.
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To implement and fund the new inland program, OSPR would add
38 positions with an ongoing appropriation of $6.2 million
annually. Revenue for the program is provided by removing
the January 1, 2015, sunset date on the 6.5[ cap on the
per-barrel fee for oil delivered at marine terminals and
extending the fee to include all crude oil delivered to
refineries in California by any transportation method. The
planned changes require legislative action and extensive
budgetary trailer bill language accompanies the BCP. This
bill is based on the budgetary trailer bill language.
The Legislative Analyst's Office has recommended support for
the proposal, although it recommends that a risk-based fee,
if feasible, be implemented that covers the cost of the
entire oil spill program and that the requested positions
be funded for one-half year only.
5) Senate Hearing on Emergency Response to Rail Accidents
Regulatory Framework . On March 19, 2014, the Senate
Committees on Environmental Quality and Natural Resources
and Water held an oversight hearing on Emergency
Preparedness for Rail Accidents. During that hearing,
representatives from OSPR, OES, Department of Forestry and
Fire Protection (Cal FIRE), Department of Toxic Substances
Control (DTSC), and the Sacramento County Certified Unified
Program Agencies (CUPA) testified on their responsibilities
and preparedness in the event of a rail accident.
At the hearing, the agencies stated that while there is
significant cooperation at the state level, the
coordination with local agencies can be lacking. The CUPAs
are typically the first responders after an accident.
Although immediate response by a CUPA is likely in the
event of an urban spill, local CUPA staff in rural parts of
the state may not be able to respond for hours or until the
next day.
Testimony from OSPR highlighted the complete approach it
currently has for prevention, preparedness, and response
for a marine oil spill. However, OSPR testified that there
are significant gaps in all three of these areas for an
inland oil spill. Although prevention of a spill from a
train (see comments 6 and 7) is largely regulated by the
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Federal Rail Administration and the Public Utilities
Commission, there are substantial regulatory gaps in
preparedness. In addition, OSPR highlighted the lack of
dedicated state resources for response.
6) Transportation of oil . OSPR states that 65% of
California's crude oil supply arrives by tankers
originating from Alaska or overseas. The remaining 35% is
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).
7) 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
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.
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8) Policy concerns .
a) Inland oil spills . The provisions of the bill are
somewhat contradictory as they relate to inland oil
spills. The bill currently defines inland oil spills as
spills that affect waters of the state, and it provides
a funding structure for those spills. The bill also
requires OSPR to implement activities related to oil
spill response for any oil spill in the state. However,
OSPR has no defined funding if an oil spill of any size
occurs in a region that is not adjacent to state waters.
Who would be responsible for such a spill, and how
would prevention, response, and remediation be paid for?
The bill also identifies the need for OSPR to protect
valuable natural resources in California. It is not
clear how this will be accomplished if a natural
resource is not located near water.
b) Other hazardous spills . The bill only identifies
emergency preparedness and response to oil spills. Who
is responsible for a non-oil hazardous materials spill?
What happens if a spill combines crude oil with another
hazardous material? And are emergency plans being
prepared to ensure adequate response?
c) Boats, trains, and automobiles . The bill identifies
the transportation of high volumes of crude oil by
vessel, railroad, truck or pipeline in California. The
provisions of the bill address how transportation of
crude oil by train should be taken into consideration in
developing the state's emergency response plan.
However, similar provisions to address truck
transportation of crude oil are not consistent
throughout the bill.
In addition, the bill requires all facilities to address
requirements for spill prevention and response. If rail
lines across the state are included in the definition of
facility, how is it feasible to meet this requirement
for the 5800 miles of Class I rail lines in California?
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d) Neighbor notification and federal preemption . The
bill requires, to the extent possible under federal law,
for local communities to be notified of the quantities
and properties of crude oil passing through their areas
in a timely manner (Gov ��8670.29 and 8670.90). The
railroads have challenged similar requirements in the
past, and the Ninth Circuit Court of Appeals concluded
in 2003 that the California Public Utilities Commission
(CPUC) rules regarding train composition and
notification were preempted by federal law in several
areas.
9) Amendments needed .
a) An amendment is needed to specify who should review
contingency plans for facilities or local Governments
located inland (Gov �8670.36).
b) An amendment is needed to include persons with
expertise in crude oil transportation by trucks to the
TAC (Gov �8670.54).
c) Additional amendments are needed to ensure
transportation of crude oil by trucks is appropriately
accounted for in the bill.
10)Related legislation . The Lempert-Keene-Seastrand Oil Spill
Prevention and Response Act (SB 2040, Chapter 1248, 1990)
established OSPR.
AB 2911 (Wolk) Chapter 565, Statutes of 2008, gave OSPR the
authority to respond to inland spills that affect inland
waters.
AB 1112 (Huffman) Chapter 583, Statutes of 2011, raised the
per-barrel fee from 5[ to 6.5[, with a sunset provision
that will reduce the fee back to 5[ on January 1, 2015.
The bill also added new responsibilities for OSPR to
oversee vessel-to-vessel fuel transfers.
AB 881 (Chesbro) of 2013 would increase the per-barrel fee to
7[ and change the cap for the non-tank vessel fee. The
bill is currently on the Senate inactive file.
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SOURCE : Author
SUPPORT : California League of Conservation Voters
Clean Water Action
Environmental Working Group
Environment California
Surfrider Foundation
OPPOSITION : None on file