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SB-25 Oil and gas: well stimulation treatments: earthquake and leak monitoring and reporting.(2021-2022)

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Date Published: 03/07/2021 01:30 PM
SB25:v98#DOCUMENT

Amended  IN  Senate  March 07, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 25


Introduced by Senator Hurtado

December 07, 2020


An act to add Sections 3160.3 and 3160.5 to the Public Resources Code, relating to oil and gas.


LEGISLATIVE COUNSEL'S DIGEST


SB 25, as amended, Hurtado. Oil and gas: well stimulation treatments. treatments: earthquake and leak monitoring and reporting.
Existing law authorizes the Geologic Energy Management Division in the Department of Conservation to regulate the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law requires an operator proposing to perform a well stimulation treatment to apply to the State Oil and Gas Supervisor or a district deputy for a permit to perform the well stimulation treatment treatment, including hydraulic fracturing, and imposes other requirements and conditions on the use of well stimulation treatments. Under existing law, a person who fails to comply with this and other requirements relating to the regulation of oil or gas operations is guilty of a misdemeanor.
This bill would express the intent of the Legislature to enact subsequent in enacting this legislation to (1) strengthen the regulatory review process for well stimulation treatment projects to protect public health and safety, and the environment, while protecting the livelihoods of essential workers in the San Joaquin Valley, and (2) ensure that any jobs or economic activity affected by the strengthening of the regulatory review process for well stimulation treatment projects are fully compensated for, and retained, in order to ensure the employees and communities affected by these actions are not adversely affected. The bill would require the operator of a well, from the commencement of hydraulic fracturing until 30 days after the end of the hydraulic fracturing on the well, to monitor the California Integrated Seismic Network for indication of an earthquake of magnitude 2.7 or greater occurring within a radius of 5 times the axial dimensional stimulation area. If an earthquake of magnitude 2.7 or greater is identified, the bill would require the operator to immediately notify the division and inform the division when the earthquake occurred relative to the hydraulic fracturing operations, and would prohibit any further hydraulic fracturing to be done within the radius until the division has completed a certain evaluation and is satisfied that hydraulic fracturing within that radius does not create a heightened risk of seismic activity. Within 72 hours of the occurrence of an unauthorized release of certain fluids, the bill would require the operator of the well to provide the division a written report containing certain information related to the release. Because a violation of these requirements would be a crime, the bill would impose a state-mandated local program.
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: NOYES   Local Program: NOYES  

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


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) The Geologic Energy Management Division of the Department of Conservation has responsibility for the protection of public health, safety, and the environment in fulfilling its duty to encourage the wise development of oil and gas resources.
(2) The division supervises oil and gas operations, administers laws for the conservation of petroleum and geothermal resources, and ensures the safe development and recovery of the state’s energy resources.
(3) Permitting to approve oil and gas operations is a core function of the division and is required for oil field operations that alters the casing of a well, including drilling, reworks, redrilling, recompletions, maintenance work, abandonments, and site restorations.
(4) In 2013, the Legislature passed, and Governor Jerry Brown signed, Senate Bill 4 (Chapter 313 of the Statutes of 2013) that explicitly defined and established a comprehensive permitting process for well stimulation treatments. A well stimulation treatment is a treatment of a well designed to enhance oil and gas production or recovery by increasing permeability of a formation.
(5) Well stimulation is a short-term and noncontinual well completions process for the purpose of opening and stimulating channels for the flow of hydrocarbons, which includes hydraulic fracturing, acid fracturing, and acid matrix stimulation.
(6) Senate Bill 4 established strong public health, safety, and environmental criteria for well stimulation that included public disclosure of chemicals used, public disclosure of permits issued, extensive engineering and geological reviews, well integrity evaluations to ensure that activity is confined to a geologic zone, comprehensive poststimulation report filing and disclosures of water sources and usage, and ongoing seismic monitoring during the well stimulation treatment process.
(7) The division further increased its regulatory review process of well stimulation treatment permits by initiating a third-party scientific review of permit applications.
(8) The division retained experts at the Lawrence Livermore National Laboratory (LLNL) to assess the well stimulation treatment permit review process and evaluate the completeness of operators’ application materials and the division’s engineering and geologic analyses.
(9) LLNL scientific review of the permit applications and process found that the permitting process met statutory and regulatory requirements.
(10) As a result of LLNL’s involvement in the permit review process, the division increased its requirements of the technical models used in the permit approval process and now requires all operators to provide an Axial Dimensional Stimulation Area Narrative Report for each oilfield and fracture interval that must be validated by LLNL and conform to the permitting process.
(11) The permitting process for an operator to perform well stimulation treatment in California has been widely recognized as among the strongest safeguards and regulatory conditions in the nation.
(12) A significant percentage of California’s daily oil production is sourced from wells that were completed with well stimulation treatments.
(13) The vast majority, 97 percent, of well stimulation treatments occur in the County of Kern, with nearly all well stimulation treatment projects taking place in four oil and gas fields in unincorporated parts of the county.
(14) Well stimulation treatment projects contribute two billion five hundred million dollars ($2,500,000,000) per year to the County of Kern’s gross regional product and two hundred seventy million dollars ($270,000,000) per year in tax revenue, of which one hundred twenty million dollars ($120,000,000) goes to local government to support education, police, and fire.
(15) Thousands of people are directly employed in the oil and gas industry and the average worker earns ninety-five thousand dollars ($95,000) per year. Many more thousands are employed due to indirect and induced impacts of the oil and gas industry.
(b) It is the intent of the Legislature to enact subsequent in enacting this legislation that would to do both of the following:
(1) Strengthen the regulatory review process for well stimulation treatment projects to protect public health and safety, and the environment, while protecting the livelihoods of essential workers in the San Joaquin Valley.
(2) Ensure that any jobs or economic activity affected by the strengthening of the regulatory review process for well stimulation treatment projects are fully compensated for, and retained, in order to ensure the employees and communities affected by these actions are not adversely affected.

SEC. 2.

 Section 3160.3 is added to the Public Resources Code, to read:

3160.3.
 (a) From the commencement of hydraulic fracturing until 30 days after the end of the hydraulic fracturing on a well, the operator of the well shall monitor the California Integrated Seismic Network for indication of an earthquake of magnitude 2.7 or greater occurring within a radius of five times the axial dimensional stimulation area.
(b) If an earthquake of magnitude 2.7 or greater is identified under subdivision (a), all of the following requirements shall apply:
(1) The operator shall immediately notify the division and inform the division when the earthquake occurred relative to the hydraulic fracturing operations.
(2) The division, in consultation with the operator and the California Geological Survey, shall conduct an evaluation of all of the following:
(A) Whether there is indication of a causal connection between the hydraulic fracturing and the earthquake.
(B) Whether there is a pattern of seismic activity in the area that correlates with nearby hydraulic fracturing.
(C) Whether the mechanical integrity of any active well within the radius specified in subdivision (a) has been compromised.
(3) No further hydraulic fracturing shall be done within the radius specified in subdivision (a) until the division has completed the evaluation under paragraph (2) and is satisfied that hydraulic fracturing within that radius does not create a heightened risk of seismic activity.

SEC. 3.

 Section 3160.5 is added to the Public Resources Code, to read:

3160.5.
 Within 72 hours of the occurrence of an unauthorized release of fluid described in Section 1786 of Title 14 of the California Code of Regulations, the operator of the well shall provide the division a written report that includes all of the following information:
(a) A description of the activities leading up to the release.
(b) The type and volumes of fluid released.
(c) The cause or causes of the release.
(d) Actions taken by the operator to stop, control, and respond to the release.
(e) Steps taken and any changes in operational procedures implemented by the operator to prevent future releases.

SEC. 4.

 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.