New Legislation Affecting the Oil and Gas Industry

New Legislation Introduced Affecting the Oil and Gas Industry

Monday Morning Report, March 2, 2015

As the deadline for legislative bill introductions came and went last week, California’s oil and gas industry will have their hands full in addressing proposals that impact producer’s survival.

California State Senator Fran Pavley has introduced four bills that will be debated throughout the legislative session and Assemblyman Das Williams has introduced a measure of his own.
Senator Pavley’s core of support comes from the environmental community and her early bill list reflects her base.  Below is a brief breakdown of her four measures along with those of her Assembly counterparts, Das Williams and Anthony Rendon:

SB 13 (Pavley)
The bill specifies that the State Water Resources Control Board (SWRCB) is authorized to designate a high-priority or medium-priority basin as a probationary basin. SB 13 provides a local agency or groundwater sustainability agency 90 or 180 days, as prescribed, to remedy certain deficiencies that caused SWRCB to designate the basin as a probationary basin. The bill further authorizes the SWRCB to develop an interim plan for certain probationary basins one year after the designation of the basin as a probationary basin.

SB 20 (Pavley)
SB 20 seeks to make all information on wells public via a report. There is a cost but who will pay the fees is the question being posed.

SB 32 (Pavley)
SB 32 proposes to reduce GHG’s to the equivalent to 80% below 1990 levels. CARB will make further recommendations for future reductions beyond 2050.

SB 248 (Pavley)
This bill would require all operations on or in the well of any form to be systematically, completely, and accurately described and recorded in the well history.

AB 356 (Williams)
Proposal requires groundwater monitoring near Class II injection wells in order to protect underground sources of drinking water from oil and gas wastewater disposal and enhanced oil recovery (EOR) treatments.

AB 1490 (Rendon)
Bill prohibits a well operator from conducting a well stimulation treatment following the occurrence of an earthquake magnitude of 2.0 or higher on a well that is within a radius of an unspecified distance from the epicenter of the earthquake until DOGGR completes a certain evaluation and is satisfied that the well stimulation treatment does not create a heightened risk of seismic activity.

AB 1501 (Rendon)
AB 1501 requires an air district to establish an emission standard for methane from a well stimulation treatment, and to issue a permit to an operator to enforce that standard.  Operator would also be required to monitor the well stimulation treatment for methane leaks.

CIPA will address all of the aforementioned measures and seek the best outcome on behalf of its membership. Whether the association will push to have the bills amended, propose a meaningful compromise or kill them outright remains to be seen.  Groundwater monitoring, injection well oversight, further reduction of GHG’s, and well reporting history are issues that will be front and center during the session.  

Multiple environmental groups have also filed a legal petition asking California Governor Jerry Brown (D) to ban hydraulic fracturing for oil and natural gas.  Their motivation includes some “not so clear facts” that producers “were allowed by the state” to inject wastewater from 140 wells into protected waters, a fact disproved by scientists and regulators alike. Governor Brown has 30 days to respond to the petition.

For more information, please contact P. Anthony Thomas.