Today's Law As Amended

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AB-1440 Oil and gas: development.(2019-2020)



SECTION 1.

 Section 3106 of the Public Resources Code is amended to read:

3106.
 (a) The supervisor shall so supervise 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, including pipelines not subject to regulation pursuant to Chapter 5.5 (commencing with Section 51010) of Part 1 of Division 1 of Title 5 of the Government Code that are within an oil and gas field, so as to prevent, as far as possible, damage to life, health, property, and natural resources; damage to underground oil and gas deposits from infiltrating water and other causes; loss of oil, gas, or reservoir energy, energy;  and damage to underground and surface waters suitable for irrigation or domestic purposes by the infiltration of, or the addition of, detrimental substances.
(b) The  In compliance with subdivision (a), the  supervisor shall also supervise the drilling, operation, maintenance, and abandonment of wells so as to permit the owners or operators of the wells to utilize all  methods and practices known to the oil industry for the purpose of increasing the ultimate recovery of underground hydrocarbons and which,  that,  in the opinion of the supervisor, are suitable for this purpose  in each proposed case. To further the elimination of waste by increasing the recovery of underground hydrocarbons, it  It  is hereby declared as a policy of this state that the grant in an oil and gas lease or contract to a lessee or operator of the right or power, in substance, to explore for and remove all hydrocarbons from any lands in the state, in the absence of an express provision to the contrary contained in the lease or contract, is deemed to allow the lessee or contractor, or the lessee’s or contractor’s successors or assigns, to do what  subject to the requirements of subdivision (a), to use methods or processes that  a prudent operator using reasonable diligence would do, use,  having in mind the best interests of the lessor, lessee, and the  state in producing and removing hydrocarbons, including, but not limited to, the injection of air, gas, water, or other fluids into the productive strata, the application of pressure heat or other means for the reduction of viscosity of the hydrocarbons, the supplying of additional motive force, or the creating of enlarged or new channels for the underground movement of hydrocarbons into production wells, when these methods or processes employed  have been approved by the supervisor, except that nothing contained in this section imposes a legal duty upon the lessee or contractor, or the lessee’s or contractor’s successors or assigns, to conduct these operations.
(c) The supervisor may require an operator to implement a monitoring program, designed to detect releases to the soil and water, including both groundwater and surface water, for aboveground oil production tanks and facilities.
(d) To best meet oil and gas needs in this state, the  The  supervisor shall administer this division so as to encourage  help ensure  the wise development oversight  of oil and gas resources. development used to meet oil and gas needs in this state. 

SEC. 2.

 Section 6830.1 of the Public Resources Code is amended to read:

6830.1.
 It is hereby found and determined by the Legislature of the State of California as follows:
(a) That the people of the State of California have a direct and primary interest in assuring the production of the optimum quantities of oil and gas from lands owned by the state, and that a minimum of oil and gas be left wasted and unrecovered in such lands.
(b) (a)  That the state owns tide and submerged lands, which lands have been developed under oil and gas leases issued by the state to such an  extent that it is desirable that secondary operations be undertaken within such those  lands in an effort to obtain the maximum economic ultimate recovery of oil and gas from said the  lands; and that it is desirable that the carrying on of secondary recovery operations in such the  lands be encouraged, which operations the holders of such the  leases may otherwise not undertake because certain of the  leases covering such the  lands provide for the payment of graduated royalties dependent upon daily per well rates of oil production (which, which,  in the case of multiple completions, means the separately measured average daily production from each zone produced through a separate string of tubing or through casing which that  is not in communication with any other zone), zone,  which graduated royalties were established without contemplation of secondary recovery operations and the economics respecting such those  operations.
(b)  The definition relating to multiple completions set forth herein  in this section  shall apply to leases executed on or after the effective date of the amendments made to this section at the 1966 Second Extraordinary Session of the Legislature and may, with the approval of the commission, apply to oil produced from leased lands with respect to which the commission and the holder of the lease shall, on or after the effective date of such the  amendments, enter into an amendatory agreement pursuant to Section 6830.2. It is not the intention of the Legislature in enacting this paragraph subdivision  to declare the law relating to the computation of daily per well rates of oil production from multiple completions before the effective date of such the  amendments or in the absence of such  an amendatory agreement.