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SB-1012 Oil and gas wells: hazardous or idle-deserted wells and facilities.(2019-2020)

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Date Published: 03/26/2020 09:00 PM
SB1012:v98#DOCUMENT

Amended  IN  Senate  March 26, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 1012


Introduced by Senator Hurtado

February 14, 2020


An act to amend Section 10281.5 3258 of the Public Resources Code, relating to agricultural lands.


LEGISLATIVE COUNSEL'S DIGEST


SB 1012, as amended, Hurtado. Agricultural lands: Agricultural Protection Planning Grant Program. Oil and gas wells: hazardous or idle-deserted wells and facilities.
Existing law establishes the Geologic Energy Management Division in the Department of Conservation, under the direction of the State Oil and Gas Supervisor, who is required to supervise 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, so as to prevent damage to life, health, property, and natural resources. Existing law requires the department to report to the Legislature on April 1, 2021, on the number of hazardous wells, idle-deserted wells, deserted facilities, and hazardous facilities remaining, the estimated costs of abandoning or decommissioning those wells and facilities, and a timeline for future abandonment and decommissioning of those wells and facilities with a specific schedule of goals. Existing law requires the department to provide an update on the report to the Legislature on October 1, 2023, that describes the total costs, average costs per well and facility, the number of wells plugged and abandoned, the number of facilities decommissioned, the total number of projects completed, and any additional wells and facilities identified by the department requiring abandonment or decommissioning.
This bill would require the report and the update to identify the location of the applicable wells and facilities, including the county where they are located. The bill would require that the report and the update identify wells that are registered to an operator that has reported no active, injection, or production operations in the prior 5 years and whether the owner of the well failed to pay the required annual fee for each idle well or failed to have a valid idle well management plan on file with the supervisor. The bill would require the division to undertake all reasonable steps to recover plugging and abandonment costs for oil and gas wells, the costs for decommissioning attendant facilities, and other costs to remediate sites from the current registered owner of any well identified in the report or update as not having reported any active, injection, or production operations in the prior 5 years and that did not pay the required annual fee for an idle well or failed to have a valid idle well management plan on file with the supervisor.

Existing law establishes in the Department of Conservation the Agricultural Protection Planning Grant Program, under which a local government entity, nonprofit organization, authority, or joint powers authority may apply to the department for a planning grant to be used for the protection and preservation of farmland, grazing land, and grassland, as specified. Existing law requires the department, before awarding funds, to develop guidelines and selection criteria for awarding grants. Before adopting the guidelines and selection criteria, existing law requires the department to conduct at least 2 public workshops to receive and consider public comments and requires the department to publish the draft guidelines and selection criteria on its internet website at least 30 days before the public meetings. Existing law requires the department to follow these procedures when it revises the guidelines.

This bill would instead require the department to publish the draft guidelines and selection criteria on its internet website at least 45 days before the public meetings.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Chapter 645 of the Statutes of 2017 requires the State Lands Commission in the Natural Resources Agency, upon appropriation, to administer the coastal hazard and legacy oil and gas well removal and remediation program through the 2027-28 fiscal year.
(b) Chapter 652 of the Statutes of 2017 expanded existing programs to include the identification of, and the decommissioning, plugging, and abandonment of, hazardous and idle-deserted oil and gas wells and associated facilities in the state, in order to protect public health, safety, the environment, and natural resources.
(c) Chapter 272 of the Statutes of 2016 imposed new requirements on the management of idle oil and natural gas wells in order to promote the timely abandonment of wells and protect public health, safety, the environment, and natural resources.
(d) Chapter 771 of the Statutes of 2019 provided the Geologic Energy Management Division enhanced authority to require an operator to file additional securities to cover the reasonable costs of properly plugging and abandoning the operator’s wells based on an evaluation of specific criteria.
(e) Orphan wells are oil or gas wells that have no known responsible operator or no financially viable operator capable of plugging the well and decommissioning the well’s production facilities. The November 2018 report prepared by the California Council on Science and Technology titled “Orphan Wells in California: An Initial Assessment of the State’s Potential Liabilities to Plug and Decommission Orphan Oil and Gas Wells” at page 40, concluded that there are 2,565 idle wells registered to operators with no recorded California production or injection in the past five years. The report contends these wells have potentially been deserted and should be classified as orphan wells. The report acknowledges that additional research is needed to validate the status of these wells.
(f) In order to protect public health, safety, the environment, and natural resources and address environmental issues in the southern central valley area, it is in the interest of the state to ensure resources are dedicated to validating the status of these wells and to recover abandonment costs from the current registered operators.
(g) In order to protect public health, safety, the environment, and natural resources and address environmental justice issues, it is necessary to focus state resources for the decommissioning and plugging and abandonment of any hazardous and idle-deserted wells and associated facilities in the southern central valley area.

SEC. 2.

 Section 3258 of the Public Resources Code is amended to read:

3258.
 (a) The division shall not make expenditures pursuant to this article that exceed in any one fiscal year:
(1) Three million dollars ($3,000,000) commencing on July 1, 2018, for the 2018–19 fiscal year, and continuing for three fiscal years thereafter.
(2) One million dollars ($1,000,000), commencing with the 2022–23 fiscal year.
(b) Moneys expended pursuant to this article shall be used exclusively for plugging and abandoning hazardous or idle-deserted wells and decommissioning hazardous or deserted facilities and shall not be used for nonwell or nonproduction facility-related activities and payments.
(c) The division shall develop criteria for determining the priority of plugging and abandoning hazardous or idle-deserted wells and decommissioning hazardous or deserted facilities to be remediated pursuant to this article. The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to the development of criteria by the division pursuant to this subdivision.
(d) (1) (A) On April 1, 2021, the department shall report to the Legislature on the number of hazardous wells, idle-deserted wells, deserted facilities, and hazardous facilities remaining, the estimated costs of abandoning and decommissioning those wells and facilities, and a timeline for future abandonment and decommissioning of those wells and facilities with a specific schedule of goals. The location of the applicable wells and facilities, including the county in which they are located, shall be identified in the report.
(B) As part of the report required in subparagraph (A), the department shall provide recommendations to the Legislature for improving and optimizing the involvement of local agencies in the process of plugging and abandoning wells and decommissioning facilities. In drafting these recommendations, the department shall consider factors unique to each of the division’s districts, and shall consult with local agencies in developing recommendations.
(C) In collecting the information for the report required in subparagraph (A), the division shall conduct field inspections of hazardous wells, idle-deserted wells, deserted facilities, and hazardous facilities and include information in the report from the field inspections that can be used to prioritize those wells and facilities in the specific schedule of goals.
(2) On October 1, 2023, the department shall provide to the Legislature an update on the report required in paragraph (1) that describes the total costs, average costs per well and facility, the number of wells plugged and abandoned, the number of facilities decommissioned, the total number of projects completed, and any additional wells and facilities identified by the department requiring abandonment or decommissioning. The update shall include the location, including the county, of applicable wells, facilities, and projects identified in the report.
(3) The report and update required pursuant to this subdivision shall identify wells that are registered to an operator that has reported no active, injection, or production operations for that well in the prior five years and that did not either pay the required annual fee for each idle well or have a valid idle well management plan on file with the supervisor pursuant to subdivision (a) of Section 3206.

(3)

(4) The report and update to the report required to be submitted under this subdivision shall be submitted in compliance with Section 9795 of the Government Code.

(4)

(5) The requirement for submitting a report imposed under or update to the report required pursuant to this subdivision is inoperative on October 1, 2027, pursuant to Section 10231.5 of the Government Code.
(e) The division shall undertake all reasonable steps to recover plugging and abandonment costs for oil and gas wells, the costs for decommissioning attendant facilities, and other costs to remediate sites from the current registered owner of any well identified pursuant to this subdivision, including seeking enforcement in other state jurisdictions.

SECTION 1.Section 10281.5 of the Public Resources Code is amended to read:
10281.5.

(a)In addition to the requirements established by the department, the applicant shall demonstrate that the changes to the existing goals, objectives, policies, or programs of the city, county, or city and county that will logically result from the grant will improve protection of, or have a beneficial effect on climate change goals for, agricultural land, grazing land, or grasslands.

(b)Before awarding funds under the program, the department shall develop guidelines and selection criteria for awarding grants in accordance with all of the following:

(1)Before the adoption of the guidelines and selection criteria, the department shall conduct at least two public workshops to receive and consider public comments.

(2)The department shall publish the draft guidelines and selection criteria on its internet website at least 45 days before the public meetings.

(3)In adopting the guidelines and selection criteria, the department shall consider the comments from farming and ranching groups, agricultural land conservation groups, building and construction groups, local governments, regional agencies, and other stakeholders.

(4)Program guidelines may be revised by the department to reflect changes in program focus or need. Outreach to stakeholders shall be conducted pursuant to paragraphs (1), (2), and (3) before the department adopts changes to the guidelines.

(c)Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to the development and adoption of the guidelines and selection criteria pursuant to this section.