BILL NUMBER: SB 248 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 5, 2015
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Pavley
FEBRUARY 18, 2015
An act to amend Sections 3108, 3213, and 3227 of, to add Sections
3011, 3106.3, 3113, 3114, 3213.5, and 3227.2 to, and to add Article
2.5 (commencing with Section 3130) to Chapter 1 of Division 3 of, the
Public Resources Code, relating to oil and gas.
LEGISLATIVE COUNSEL'S DIGEST
SB 248, as amended, Pavley. Oil and gas.
(1) Existing law requires the Division of Oil, Gas, and Geothermal
Resources in the Department of Conservation to regulate the
drilling, operation, maintenance, and abandonment of wells and the
operation, maintenance, and removal or abandonment of tanks and
facilities attendant to oil and gas production. Existing law requires
the State Oil and Gas Supervisor, on or before the first day of
October of each year, to make public a report on specified
information.
This bill would require the supervisor to establish an inspection
protocol and schedule of all activities regulated pursuant to these
provisions and would require the total number of inspections and
results of the inspections to be included in the above-referenced
report. The bill would require the division's regulations,
field rules, notices, manuals, and other requirements to be reviewed
and revised, as needed, through a public process at least once every
10 years.
The bill would require the division to develop and implement a
data management plan on or before January 1 of an unspecified year,
to ensure that required well data and well-related submissions are
retained and readily available to the public and that publicly
available data are machine readable. As part of the data management
plan, the bill would require the division to post certain information
that it receives on its Internet Web site.
The bill would define "enhanced oil recovery" for purposes of
provisions relating to the regulation of oil and gas.
(2) Existing law requires an owner or operator of a well to keep,
or cause to be kept, and requires the operator to file with the
district deputy at specified times, a careful and accurate log, core
record, and history of the drilling of the well. Existing law
requires the well history to show the location and amount of
sidetracked casings, tools, or other material, the depth and quantity
of cement in cement plugs, the shots of dynamite or other
explosives, acid treatment data, the results of production and other
tests during drilling operations, and all data on well stimulation
treatments. Existing law requires the owner of any well to file with
the supervisor a monthly statement that provides certain information
relating to the well, including the amount of water produced from
each well. 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, in addition, require all operations on or in the
well of any form to be systematically, completely, and accurately
described and recorded in the well history. The bill would require
any fluid injected or emplaced in the well to be fully characterized
and reported as part of the history. The bill would require the
monthly statement to the supervisor to include the full
characterization of the chemical composition of water produced from
each well. The bill would also require the operator of a waste
disposal well to provide to the supervisor each quarter certain
information regarding waste disposal injections. Because a violation
of these requirements would be a crime, the bill would impose a
state-mandated local program.
(3) The federal Safe Drinking Water Act regulates certain wells as
Class II wells. Under existing federal law, the authority to
regulate Class II wells in California is delegated to the Division of
Oil, Gas, and Geothermal Resources. Under existing regulations, a
well operator is required to obtain approval from the supervisor or a
district deputy for a subsurface injection or disposal project,
including Class II wells, or any change in a project, as provided.
This bill would require the division, on or before January 1 of an
unspecified year, to update and revise these regulations according
to specified criteria and would require the division to consult with
independent experts and stakeholders in the development and review of
the regulations. The bill would require the regulations to include
certain requirements, including reporting requirements. The bill
would require these provisions to be liberally construed in order to
meet specified requirements and to provide public transparency. The
bill would provide that where the division shares jurisdiction over
an injection well with a federal entity, the division's
rules and regulations are to apply in addition to all applicable
federal laws and regulations. The bill would require an injection
well subject to specified emergency regulations of the division
regarding aquifer exemptions to immediately cease injection
operations if the well is not in compliance by the applicable
regulatory deadline. Because a violation of these requirements
would be a crime, the bill would impose a state-mandated local
program. The bill would require specified existing injection wells
and well projects to be brought into compliance with these
regulations on or before January 1 of an unspecified year.
(4) 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 all of the
following:
(a) A 2011 audit of the Division of Oil, Gas, and Geothermal
Resources' injection well program commissioned by the United State
Environmental Protection Agency highlighted numerous problems with
the program.
(b) The division has repeatedly acknowledged that it has failed to
follow applicable regulations in permitting injection wells and that
its injection well regulations are out of date. Among other reasons,
the division has cited antiquated data management practices.
(c) The division's ability to regulate depends upon full
understanding and knowledge of practices occurring under its
jurisdiction.
(d) Public transparency and regulatory accountability are
necessary to restore the public's confidence in the division.
SEC. 2. Section 3011 is added to the Public Resources Code, to
read:
3011. "Enhanced oil recovery" means any process to enhance the
displacement of oil or other hydrocarbons from a reservoir
other than primary recovery and includes the use of an immiscible,
miscible, chemical, thermal, biological, or physical process or any
combination thereof. For purposes of this section, "primary recovery"
means oil or other hydrocarbon production that uses natural
reservoir energy to displace hydrocarbons from the reservoir into the
wellbore and up to the surface. reservoir, including,
but not limited to, the injection or subsurface emplacement of fluids
or other materials into the productive strata, the
application of pressure, heat, or other means for the reduction of
viscosity of the hydrocarbons, and the supplying of additional motive
force.
SEC. 3. Section 3106.3 is added to the Public Resources Code, to
read:
3106.3. The supervisor shall establish an inspection protocol and
schedule for all activities regulated pursuant to Section 3106. The
inspection protocol and schedule shall be available to the public on
the division's Internet Web site.
SEC. 4. Section 3108 of the Public Resources Code is amended to
read:
3108. (a) On or before the first day of October of each year the
supervisor shall make public, for the benefit of all interested
persons, a report in writing showing:
(1) The total amounts of oil and gas produced in each county in
the state during the previous calendar year.
(2) The total cost of the division for the previous fiscal year.
(3) The total amount delinquent and uncollected from any
assessments or charges levied pursuant to this chapter.
(4) The total number of inspections and the results of the
inspections.
(b) The report shall also include other information as the
supervisor deems advisable.
SEC. 5. Section 3113 is added to the Public Resources Code, to
read:
3113. (a) It is the policy of the state that the division
regularly review and update its regulations, field rules, notices,
manuals, and other requirements to ensure that technological advances
and other changes in the exploration, development, and production of
oil and gas are incorporated in order to ensure that life, health,
property, and natural resources are protected pursuant to Section
3106.
(b) The division's regulations, field rules, notices, manuals, and
other requirements shall be reviewed and revised, as needed, through
a public process at least once every 10 years.
(c) The supervisor shall prepare and transmit reports to the
Legislature describing the results of the reviews required by this
section and any changes made or planned to the division's
regulations, field rules, notices, manuals, and other requirements. A
report required by this subdivision shall be submitted in compliance
with Section 9795 of the Government Code.
(d) The division shall develop and disseminate in a timely manner
training materials related to any changes made pursuant to this
section.
SEC. 6. Section 3114 is added to the Public Resources Code, to
read:
3114. (a) On or before January 1, ____, the division shall
develop and implement a data management plan to ensure that required
well data and well-related submissions are retained and readily
available to the public and that publicly available data are machine
readable. As part of the data management plan, the division shall
make available to the public on its Internet Web site all of the
following:
(1) Any notice received pursuant to Section 3203 within five days
of receipt.
(2) Any changes in status of any notice received pursuant to
Section 3203 within five days of the change.
(3) The log, history, and core record of a well within 10 days of
receipt.
(b) The division shall consult with local, state, and federal
regulators in the development of the data management plan to
facilitate timely sharing of data.
SEC. 7. Article 2.5 (commencing with Section 3130) is added to
Chapter 1 of Division 3 of the Public Resources Code, to read:
Article 2.5. Injection Wells
3130. (a) On or before January 1, ____, the division shall update
and revise its regulations for all injection wells and well projects
for which the division has received primacy from the United States
Environmental Protection Agency pursuant to Section 1425 of the
federal Safe Drinking Water Act (42 U.S.C. Sec. 300h-4).
(b) In adopting regulations pursuant to this section, the division
shall, in consultation with independent experts and stakeholders
through a public process, do all of the following:
(1) Develop best management practices for injection wells and well
projects.
(2) Review cement and cementing requirements, including factors
influencing the aging of cement.
(3) Review and identify impacts of injection on the geologic
formation specific to each type of enhanced oil recovery, waste
disposal, and other well-related processes, including when fracturing
of the formation occurs.
3131. The regulations developed pursuant to Section 3130 shall
ensure that the integrity of the well, wellbore, and formation are
maintained. In order to accomplish this requirement, the regulations
shall do both of the following:
(a) Be specific to each type of injection well and well project
used for any purpose, including, but not limited to, enhanced oil
recovery and waste disposal.
(b) Include any operation, treatment, process, and activity
performed to enhance oil recovery on, in, or in the vicinity of, any
well, wellbore, or hydrocarbon-bearing formation.
3132. The regulations developed pursuant to Section 3130 shall
include, but are not limited to, the following:
(a) An opportunity for public participation in the well and well
project review process.
(b) Full and complete geologic and hydrologic characterization and
reporting of the formation surrounding the well, including the
fracture pressure.
(c) Full and complete characterization and reporting of all well
operations with appropriate monitoring, including of surface movement
and seismic activity.
(d) Establishment of limits on operations, and procedures to
follow in the event of surface movement and seismic activity.
3133. Injection wells and well projects existing as of December
31, ____, shall be brought into compliance with the regulations
developed pursuant to Section 3130 on or before January 1, ____.
3134. This article shall be liberally construed pursuant to
Section 3013 in order to meet the requirements of Section 3106 and to
provide public transparency.
3135. Where the division shares jurisdiction over an injection
well with a federal entity, the division's rules and regulations
shall apply in addition to all applicable federal laws and
regulations.
3136. An injection well subject to the division's emergency
regulations regarding aquifer exemptions (Sections 1760.1 and 1779.1
of Title 14 of the California Code of Regulations, effective on April
20, 2015) shall immediately cease injection operations if the well
is not in compliance by the applicable regulatory deadline.
SEC. 8. Section 3213 of the Public Resources Code is amended to
read:
3213. (a) The history shall show the location and amount of
sidetracked casings, tools, or other material, the depth and quantity
of cement in cement plugs, the shots of dynamite or other
explosives, all acid treatment data of any amount and concentration,
and the results of production and other tests during drilling
operations. All operations on or in the well of any form, including,
but not limited to, the injection or emplacement of any material in
the well for any purpose during the drilling, operation, maintenance,
or abandonment of the well shall be systematically, completely, and
accurately described and recorded in the history. All data on well
stimulation treatments pursuant to Section 3160 shall be recorded in
the history.
(b) The well history reporting requirements shall not be waived.
SEC. 9. Section 3213.5 is added to the Public Resources Code, to
read:
3213.5. The chemical composition of any fluid injected or
emplaced in the well shall be fully characterized and reported as
part of the history. The chemical composition shall include any phase
present as part of, or suspended in, the fluid. The analytical
method used in the determination shall also be reported. Analytical
methods established by the United States Environmental Protection
Agency to determine chemical composition shall be used where
applicable. For purposes of this section, fluid means a liquid or gas
of any chemical composition. Subdivision (j) of Section 3160 shall
apply to any claim of trade secret protection for information
described in this section.
SEC. 10. Section 3227 of the Public Resources Code is amended to
read:
3227. (a) 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:
(1) (A) 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.
(B) The full characterization of the chemical composition of water
produced from each well, based on a representative sample, which
shall include any phase present as part of, or suspended in, the
water, and the analytical method used in making the characterization.
Analytical methods established by the United States Environmental
Protection Agency to determine chemical composition shall be used
where applicable.
(2) The number of wells drilling, producing, injecting, or idle,
that are owned or operated by the person.
(3) 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.
(4) What disposition was made of water produced from each field
and the amount of fluid or gas injected into each well used for
enhanced recovery, underground storage of hydrocarbons, or wastewater
disposal, and any other information regarding those wells that the
supervisor may require.
(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 domestic or irrigation
purposes shall be reported. Commingled water shall be proportionally
assigned to individual wells, as appropriate.
(6) 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.
(7) (A) The specific disposition of all water used in or generated
by oil and gas field activities, including water produced from each
well reported pursuant to paragraph (1). Water volumes shall be
reported by disposition method if more than one disposition method is
used. Commingled water shall be proportionally assigned to
individual wells, as appropriate.
(B) This information shall also include the temporary onsite
storage of water, as or if appropriate, and the ultimate specific
use, disposal method or method of recycling, or reuse of this water.
(b) Any 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.
(c) (1) Upon request and making a satisfactory showing therefor, a
longer filing period may be established by the supervisor for any
particular owner or operator.
(2) Notwithstanding subdivision (a), the owner of any well shall
file with the supervisor, on a quarterly basis, a statement
containing the information required to be reported pursuant to
paragraphs (5), (6), and (7) of subdivision (a) in the form
designated by the supervisor.
(d) The division shall use a standardized form or format to
facilitate reporting required pursuant to this section.
(e) The division shall use noncustom software, as feasible, to
implement online reporting by the operator of the information
required pursuant to paragraphs (5), (6), and (7) of subdivision (a).
This information may be reported separately from other information
required to be reported pursuant to this section.
(f) For purposes of this section, the following terms have the
following meanings:
(1) "Source of water" or "water source" means any of the
following:
(A) The well or wells, if commingled, from which the water was
produced or extracted.
(B) The water supplier, if purchased or obtained from a supplier.
(C) The point of diversion of surface water.
(2) "Specific disposition of all water" means the identification
of the ultimate specific use, disposal method or method of recycling,
or reuse 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.
SEC. 11. Section 3227.2 is added to the Public Resources Code, to
read:
3227.2. (a) The operator of a waste disposal well shall provide
to the supervisor each quarter information described in subdivision
(b) from the preceding quarter that is specific to each waste
disposal injection performed at the well and that fully characterizes
each waste disposal injection performed at the well. The information
shall be reported in a machine-readable format.
(b) The information to be provided shall include, but is not
limited to, the date and time of the injection, the duration of the
injection, the volume of material injected, the rate of injection,
and the applied pressure of the injection.
SEC. 12. 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.