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AB-7 Oil and gas: hydraulic fracturing.(2013-2014)

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AB7:v94#DOCUMENT

Amended  IN  Assembly  June 10, 2013
Amended  IN  Assembly  May 31, 2013
Amended  IN  Assembly  May 28, 2013
Amended  IN  Assembly  April 30, 2013
Amended  IN  Assembly  April 08, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 7


Introduced by Assembly Member Wieckowski

December 03, 2012


An act to amend Sections 3108, 3203, 3213, and 3215 of, to add Sections 3017, 3203.1, 3203.2, and 3215.5 to, and to add Article 3 (commencing with Section 3150) to Chapter 1 of Division 3 of, the Public Resources Code, relating to oil and gas.


LEGISLATIVE COUNSEL'S DIGEST


AB 7, as amended, Wieckowski. Oil and gas: hydraulic fracturing.
(1) Under existing law, the Division of Oil, Gas, and Geothermal Resources, or the division, in the Department of Conservation, regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. The State Oil and Gas Supervisor supervises the drilling, operation, maintenance, 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 of a well, before commencing the work of drilling the well, to file with the supervisor or the district deputy a written notice of intention to commence drilling, and prohibits the commencement of drilling until approval is given by the supervisor or the district deputy. Existing law requires the operator of a well to keep, or cause to be kept, a careful and accurate log, core record, and history of the drilling of the well. Within 60 days after the date of cessation of drilling, rework, or abandonment operations, the owner or operator is required to file with the district deputy certain information, including the history of work performed.
This bill would revise that procedure to instead require the operator to file an application before commencing drilling and would prohibit drilling until approval or denial of the application is given by the supervisor or district deputy within 30 working days. The bill would require, on and after January 1, 2014, additional information to be included in the application, including information regarding the chemicals, if any, to be injected into a well. This bill would additionally require the operator prior to drilling, redrilling, or deepening operations to submit proof to the supervisor that the applicable regional water quality control board has approved the disposal method and location of wastewater disposal for the well.
This bill would define, among other things, hydraulic fracturing and hydraulic fracturing fluid. The bill would require the owner or operator of a well to provide to the supervisor, or to arrange with the supplier to provide to the supervisor, specific information relating to hydraulic fracturing as a part of the history of the drilling of the well. The bill would, on or before January 1, 2015, require the division, in consultation with the Office of Environmental Health Hazard Assessment and the Department of Toxic Substances Control, to establish a process through which all chemicals used in hydraulic fracturing treatments may be studied or reviewed. The bill would provide that a supplier who provides information to the supervisor relating to hydraulic fracturing may, at the time of submission, submit to the supervisor a claim in writing that some or all of the information is protected trade secret information, as specified. The bill would require a supplier claiming trade secret protection for the chemical composition of additives used in the hydraulic treatment to disclose the composition to the division, in conjunction with a hydraulic fracturing treatment notice, but would, except as specified, prohibit those with access to the trade secret from disclosing it. Because this bill would create a new crime, it would impose a state-mandated local program.
This bill would require the supervisor, on or before January 1, 2014, and annually thereafter, to transmit to the Legislature a comprehensive report on hydraulic fracturing in the exploration and production of oil and gas resources in the state, as specified.
(2) Existing law requires the supervisor, on or before the first day of October of each year, to make public a report on specified information.
This bill would additionally require the supervisor to include information on the origin and total amount of freshwater used in each county for the production of oil and gas production, the disposal of wastewater from oil and gas production in each county, and the well casing failures in each county.
This bill would require the operator of a well, at least 30 days prior to commencing a hydraulic fracturing treatment, as defined, to provide a copy of the approved hydraulic fracturing treatment permit to every specific surface property owner owners. The bill would authorize those property owners to request the applicable regional water quality control board to perform water quality sampling and testing on any water well suitable for drinking or irrigation purposes, as specified. The bill would require a notice of intent to drill, rework, or deepen a well where hydraulic fracturing will occur to include specified information. Because a violation of these requirements is a crime, this bill would impose a state-mandated local program.
(3) 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   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) Hydraulic fracturing has been used in California for several decades to extract oil and gas and is likely to be used more extensively as the industry seeks to develop additional oil-bearing and gas-bearing formations.
(b) The Division of Oil, Gas, and Geothermal Resources in the Department of Conservation, which has the obligation to protect public health and the natural resources of the state, including groundwater resources, has the authority to regulate all oil and natural gas drilling in the state, but currently does not require the disclosure of pertinent information regarding hydraulic fracturing or ascertain all specific types of production and exploration taking place at permitted wells.
(c) Given California’s geologic, seismic complexity, and its finite and significantly compromised water resources, it is important to collect basic information about natural resource production processes. The state and the public should know when and where hydraulic fracturing is occurring and what chemicals are being used in the process.

SEC. 2.

 Section 3017 is added to the Public Resources Code, to read:

3017.
 “Hydraulic fracturing” means a well stimulation treatment that may include the application of hydraulic fracturing fluids into an underground geologic formation in order to create fractures in the formation, thereby causing or improving the production of oil or gas from a well.

SEC. 3.

 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 origin and total amount of freshwater used in each county for oil and gas production during the previous calendar year.
(5) The surface and underground destinations and total amount of disposed wastewater from oil and gas production in each county during the previous calendar year.
(6) The total number of well casing failures in each county, the exact location of these wells, the reason for the failures, and at what point the failures occurred, such as during well completion, well stimulation, or well production, during the previous calendar year.
(b) The report shall also include other information as the supervisor deems advisable.

SEC. 4.

 Article 3 (commencing with Section 3150) is added to Chapter 1 of Division 3 of the Public Resources Code, to read:
Article  3. Hydraulic Fracturing

3150.
 “Chemical Abstracts Service” means the division of the American Chemical Society that is the globally recognized authority for information on chemical substances.

3151.
 “Chemical Abstracts Service (CAS) number” means the unique identification number assigned to a chemical by the Chemical Abstracts Service.

3153.
 “Hydraulic fracturing fluid” includes water or other carrier fluids that may be mixed with physical and chemical additives for the purpose of hydraulic fracturing. The additives may, but are not required to, serve additional purposes beyond the transmission of hydraulic pressure to the geologic formation. Additives may be of any phase and may include proppants.

3154.
  “Proppants” are materials inserted or injected into the formation that are intended to prevent newly created or enhanced fractures from closing.

3155.
 “Supplier” means an entity performing hydraulic fracturing or a person supplying an additive or proppant directly to the operator for use in hydraulic fracturing on a well.

3156.
 If hydraulic fracturing is performed on a well, the owner or operator of the well shall provide to the supervisor, or shall arrange with the supplier to provide to the supervisor, and shall include in the well history maintained pursuant to Section 3213, all of the following information, except for information claimed as a trade secret pursuant to subdivision (c) of Section 3203:
(a) A complete list of the chemical constituents formulated for use in the hydraulic fracturing fluid that is injected into the well and each chemical’s associated CAS numbers. Where the CAS number does not exist, the operator or supplier may provide another unique identifier where available.
(b) The purpose of each additive contained in the hydraulic fracturing fluid.
(c) The estimated total amount of the additives in the hydraulic fracturing fluid.
(d) The estimated maximum concentration of each chemical constituent in the additive as disclosed on a material safety data sheet in the hydraulic fracturing fluid expressed as a percentage by mass.
(e) The estimated maximum concentration of each chemical constituent disclosed on a material safety data sheet in the hydraulic fracturing fluid, expressed as a percentage by mass.
(f) The amount and source of any water suitable for irrigation or domestic purposes used to conduct the hydraulic fracturing treatment of the well.
(g) The amount and disposition of water and hydraulic fracturing fluid recovered from each well where hydraulic fracturing occurred prior to the reporting of the water produced pursuant to Section 3227.
(h) Any radiological components or tracers injected into the well as part of the hydraulic fracturing process and a description of the recovery method, if any, for those components or tracers, the recovery rate, and the disposal method for recovered components or tracers.

3157.
 On or before January 1, 2015, the division, in consultation with the Office of Environmental Health Hazard Assessment and the Department of Toxic Substances Control, shall establish a process through which all chemicals used in hydraulic fracturing treatments may be studied or reviewed, a list containing any restricted or prohibited toxic chemicals, and a list containing any restricted or prohibited locations deemed extremely vulnerable to a spill or release of chemicals.

SEC. 5.

 Section 3203 of the Public Resources Code is amended to read:

3203.
 (a) The operator of any well, before commencing the work of drilling the well, shall file with the supervisor or the district deputy an application to commence drilling. Drilling shall not commence until approval or denial of the application is given by the supervisor or the district deputy within 30 working days. If operations have not commenced within one year of receipt of the application, the application shall be deemed canceled. The 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 supervisor may require other pertinent information to supplement the application.
(b) (1) On and after January 1, 2014, in addition to the information required in the application under subdivision (a), the application shall additionally include all of the following information:
(A) The type of exploration and production techniques that the operator will use at the well or wells.
(B) A complete list of the chemicals, if any, that will be injected into the well for hydraulic fracturing or other production enhancement methods in the exploration or production process or processes. This list of chemicals shall include all of the following information:
(i) The name of the chemical.
(ii) The purpose of the chemical in the production or exploration process.
(iii) The Chemical Abstract Service numbers for the chemical.
(iv) The estimated total amount of the chemical used.
(2) If any of the information required pursuant to paragraph (1) changes over the course of the exploration and production process, the operator shall immediately notify the supervisor.
(c) (1) A supplier may claim trade secret protection for the chemical composition of additives pursuant to 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).
(2) If a supplier believes that information regarding a chemical constituent of a hydraulic fracturing fluid is a trade secret, the supplier shall nevertheless disclose the information to the division in conjunction with a hydraulic fracturing treatment notice, if not previously disclosed, within 30 days following cessation of hydraulic fracturing on a well, and shall notify the division in writing of that belief.
(3) The supplier is not required to disclose trade secret information to the operator.
(4) This subdivision does not permit a supplier to refuse to disclose the information required pursuant to this section to the division.
(5) To comply with the public disclosure requirements of this section, the supplier shall indicate where trade secret information has been withheld and the specific name of a chemical constituent shall be replaced with the chemical family name or similar descriptor associated with the trade secret chemical information.
(6) Except as provided in subparagraph (B) of paragraph (8), the division shall protect from disclosure any trade secret designated as such by the supplier, if that trade secret is not a public record.
(7) The supplier shall notify the division in writing within 30 days of any changes to information provided to the division to support a trade secret claim.
(8) Upon receipt of a request for the release of information to the public, which includes information the supplier has notified the division is a trade secret and is not a public record, 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 commences 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.
(9) (A) Except as provided in subparagraph (B) of paragraph (8), trade secret information is not a public record and shall not be disclosed to anyone except to an officer or employee of the division, the state, 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 the state and its 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) A health professional may share trade secret information with other persons as may be professionally necessary, including, but not limited to, the patient and other health professionals. Confidentiality of the trade secret information shall be maintained. The holder of the trade secret may request a confidentiality agreement consistent with the requirements of this subdivision to whom this information is disclosed as soon as circumstances permit. If necessary, a procedure for timely disclosure by the division in the event of an emergency shall be identified.
(10) For the purposes of this subdivision, the definitions provided in Article 3 (commencing with Section 3150) shall apply when appropriate.
(d) After the completion of any well, this section also applies, as far as it may be applied, to the deepening or redrilling of the well, an operation involving the plugging of the well, or any operations permanently altering in any manner the casing of the well. The number or designation of a well, and the number or designation specified for a well in an application filed as required by this section, shall not be changed without first obtaining a written consent of the supervisor.
(e) If an operator fails to comply with an order of the supervisor, the supervisor may deny approval of proposed well operations until the operator brings its existing well operations into compliance with the order. If an operator fails to pay a civil penalty, remedy a violation that it is required to remedy to the satisfaction of the supervisor pursuant to an order issued under Section 3236.5, or to pay any charges assessed under Article 7 (commencing with Section 3400), the supervisor may deny approval to the operator’s proposed well operations until the operator pays the civil penalty, remedies the violation to the satisfaction of the supervisor, or pays the charges assessed under Article 7 (commencing with Section 3400).
(f) This section does not apply to routine pressure tests to monitor the integrity of wells and well casings.
(g) Prior to the approval of the commencement of any drilling, redrilling, or deepening of a well, the operator shall submit written proof to the supervisor that a waste discharge report has been filed with the applicable regional water quality control board pursuant to Section 13260 of the Water Code for the disposal of the wastewater for the well.

SEC. 6.

 Section 3203.1 is added to the Public Resources Code, to read:

3203.1.
 (a) At least 30 days prior to commencing a hydraulic fracturing treatment, the operator shall provide a copy of the approved hydraulic fracturing treatment permit to every surface property owner. owner or authorized agent of that owner whose property line location is one of the following:
(1) Within a 1,500 foot radius of the wellhead.
(2) Within 500 feet from the horizontal projection of all subsurface portions of the designated well to the surface.
(b) (1) A property owner notified pursuant to subdivision (a) may request the applicable regional water quality control board to perform water quality sampling and testing on any water well suitable for drinking or irrigation purposes and on any surface water suitable for drinking or irrigation purposes as follows:
(A) Baseline measurements prior to the commencement of the hydraulic fracturing treatment.
(B) Followup measurements after the hydraulic fracturing treatment on the same schedule as the pressure testing of the well casing of the hydraulically fractured well.
(2) The regional water quality control board may contract with an independent third party that adheres to board-specified standards and protocols to perform the water sampling and testing.
(3) The regional water quality control board shall retain and archive sufficient samples collected pursuant to this subdivision to permit a reasonable number of additional analyses.

SEC. 7.

 Section 3203.2 is added to the Public Resources Code, to read:

3203.2.
 A notice of intent to drill, rework, or deepen a well where hydraulic fracturing will occur shall include all of the following information:
(a) A description of the estimated quantity of water planned to be used in the hydraulic fracturing process.
(b) The source or sources of water to be used.
(c) A groundwater monitoring plan to the appropriate regional water quality control board. The groundwater monitoring plan shall include, at a minimum, all of the following information:
(1) The current water quality of the groundwater basin through which the well will be drilled that is sufficient to characterize the quality of the aquifer and identify the zone of influence of the proposed well.
(2) Water quality data or a plan to obtain data for monitoring wells regarding the presence and concentration of the constituents to be used in, or that can be influenced by, the drilling process for the period of active use.
(3) An emergency monitoring plan that will be implemented in the case of well casing failure or any other event which has the potential to contaminate groundwater.
(d) Water quality monitoring data shall be submitted electronically to the State Water Resources Control Board geotracker database and any public data registry identified by the division for disclosure of hydraulic fracturing data.
(e) This section shall not apply if the appropriate regional water quality control board confirms that the proposed well will not penetrate or will not be located within the zone of influence of an aquifer that is designated for a beneficial use.

SEC. 8.

 Section 3213 of the Public Resources Code is amended to read:

3213.
 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, the results of production and other tests during drilling operations, and the information required pursuant to Section 3156.

SEC. 9.

 Section 3215 of the Public Resources Code is amended to read:

3215.
 (a) Within 60 days after the date of cessation of drilling, rework, hydraulic fracturing, or abandonment operations, or the date of suspension of operations, the owner or operator shall file with the district deputy, in a form approved by the supervisor, true copies of the log, core record, and history of work performed, and, if made, true and reproducible copies of all electrical, physical, or chemical logs and tests. Upon a showing of hardship, the supervisor may extend the time within which to comply with this section for a period not to exceed 60 additional days.
(b) (1) The supervisor shall post the information provided pursuant to Section 3156 and that is not claimed as a trade secret pursuant to subdivision (c) of Section 3203 to existing Internet maps on the division’s Internet Web site, and shall make that information available to the public in a way that the information is associated with each specific well where chemicals are injected for purposes of hydraulic fracturing.
(2) For purposes of complying with the posting requirements of paragraph (1), the supervisor may use an existing public Internet Web site administered by the Ground Water Protection Council or the Interstate Oil and Gas Compact Commission if all of the following are met:
(A) The information is transmitted and posted to the public Internet Web site in a form and manner approved by the supervisor and includes the information provided to the supervisor pursuant to Section 3156, except for trade secret information pursuant to subdivision (c) of Section 3203.
(B) There is an electronic link from the wells represented on the division’s existing internet maps that allows members of the public to view the information about specific wells based on their location.
(C) On and after January 1, 2014, the Chemical Disclosure Registry allows for the division staff and the public to aggregate data and search and sort the registry for information by geographic area, ingredient, Chemical Abstract Service number, time period, and operator.
(D) Members of the public are permitted to copy, reproduce, modify, republish, upload, post, transmit, or distribute the information without restriction.

SEC. 10.

 Section 3215.5 is added to the Public Resources Code, to read:

3215.5.
 (a) Notwithstanding Section 10231.5, on or before January 1, 2014, and annually thereafter, the supervisor shall prepare and transmit to the Legislature a comprehensive report regarding hydraulic fracturing in oil and gas exploration and production in California, using the information provided pursuant to Section 3156. Where the information involves trade secret protection, the supervisor shall only use information provided pursuant to paragraph (5) of subdivision (c) of Section 3203 to complete the report. The report shall additionally include, but is not limited to, the following relevant information:
(1) Aggregated data detailing the volumes of hydraulic fracturing fluid used during hydraulic fracturing, identifying whether it is water suitable for irrigation or domestic purposes, water not suitable for irrigation or domestic purposes, or something other than water.
(2) Aggregated data detailing the disposition of hydraulic fracturing fluid used to conduct hydraulic fracturing.
(3) Aggregated data detailing the volumes of each chemical used in hydraulic fracturing treatments in the state, in each county, and by each company, during the preceding year.
(4) The number of emergency responses to a spill or release.
(5) The number of well failures.
(6) Based on a representative sampling of information submitted to the division pursuant to Section 3156 and subdivision (c) of Section 3203, the percentage of chemical information withheld within the representative sample as trade secret information.
(b) A report to the Legislature pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.

SEC. 11.

 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.