California Senate Bill SB711 Amended / Bill

 BILL NUMBER: SB 711AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 25, 2012 AMENDED IN ASSEMBLY SEPTEMBER 1, 2011 AMENDED IN ASSEMBLY JUNE 14, 2011 INTRODUCED BY Senator Rubio (Coauthor: Senator Calderon) FEBRUARY 18, 2011 An act  to add Section 3016 to   to amend Sections 3008, 3205.2, and 3227 of, and to add Section 3011 to,  the Public Resources Code, relating to public resources. LEGISLATIVE COUNSEL'S DIGEST SB 711, as amended, Rubio. Public resources: oil and gas: underground injection of gas. Existing law establishes the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation and provides the division with the authority to regulate oil and gas wells and production facilities.  Existing law defines "well" to mean, among other things, a well drilled for the purpose of disposing of waste fluids from an oil or gas field. Existing law requires a person engaging in the operation of a class II commercial wastewater disposal well to file an indemnity bond with the State Oil and Gas Supervisor.   This bill would revise this definition of "well" to mean a well used for the purposes of disposing of waste fluids brought to the surface in connection with conventional oil or gas production and may be commingled with wastewater from gas plants that are an integral part of production operations, unless those wastewaters are classified as hazardous waste at the time of injection.   Existing law requires an operator of a well to file with the supervisor a report containing, among other things, information on the disposition of the water produced from an oil or gas field, the amount of fluid injected into a well used for enhanced recovery, and wastewater disposal.   This bill would require a person engaging in the operation of a class II commercial waste fluid disposal well to file with the supervisor an indemnity bond. The bill would require an operator of a well to file with the supervisor a report containing information on the disposal of fluid and the composition of fluid in an oil or gas field, and additionally require the report to include the composition of fluid injected into a well.   This bill would authorize the division to permit the underground injection of a gas, as defined, including the constituents associated with the gas that are produced in downhole in connection with exploration, development, or production operations for the purposes of disposal.  Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   (a) The Legislature finds and declares both of the following:   (1) The federal Safe Drinking Water Act (42 U.S.C. Sec. 300h et seq.) was enacted to protect underground sources of drinking water from contamination caused by underground injection of waste and other substances. The federal regulations implementing the federal act refer to wells that inject fluid associated with oil and gas production operations as class II injection wells (40 C.F.R. Sec. 146.5 (b)). In California, wells used to inject fluids associated with oil and gas production operations are regulated by the Division of Oil, Gas, and Geothermal Resources (DOGGR) under Chapter 1 (commencing with Section 3000) of Division 3 of the Public Resources Code. In 1982, DOGGR entered into a primacy agreement with the United States Environmental Protection Agency pursuant to Section 1425 of the federal act providing DOGGR with primacy in regulation of class II injection wells in California.   (2) Clarification is needed to confirm the extent of the state's regulatory authority over wells used to dispose of waste fluids, including gas, from an oil or gas field.   (b) In enacting this measure, it is the intent of the Legislature to establish the policy of the state as all of the following:   (1) This measure is to be interpreted and implemented consistent with the United States Environmental Protection Agency's interpretation regarding fluids that are authorized to be injected into class II injection wells in the federal regulations and the guidance documents.   (2) The use of the term "conventional" in Section 3008 of the Public Resources Code should be interpreted, consistent with the United States Environmental Protection Agency's interpretation and guidance documents, to include all forms of primary, secondary, and tertiary oil or natural gas production.   (3) The use of the phrase "wastewater from gas plants" in Section 3008 of the Public Resources Code should be interpreted, consistent with the United States Environmental Protection Agency's interpretation and guidance documents, to include any form of waste fluid intrinsically derived from the process of removing produced water, gas, or other constituents from the product stream as part of primary field operations, if these fluids are not regulated as hazardous waste at the time of injection.   (c) It is further the intent of the Legislature, in enacting this measure:   (1) To ensure that DOGGR's authority to regulate waste fluid disposal wells is consistent and coextensive with what is allowed for a class II injection well under the federal act.   (2) To validate all previous approvals granted by DOGGR for conducting class II waste fluid disposal operations consistent with Section 146.5(b)(1) of Title 40 of the Code of Federal Regulations and that those operations should be regulated by DOGGR pursuant to Chapter 1 (commencing with Section 3000) of Division 3 of the Public Resources Code.   SEC. 2.   Section 3008 of the   Public Resources Code   is amended to read:  3008. (a) "Well" means  any  an  oil or gas well or well for the discovery of oil or gas;  any   a  well on lands producing or reasonably presumed to contain oil or gas;  any   a  well  drilled   used  for the purpose of injecting fluids  or gas  for stimulating oil or gas recovery, repressuring or pressure maintenance of oil or gas reservoirs, or disposing of waste fluids  from an oil or gas field; any  brought to the surface in connection with conventional oil or gas production and that may be commingled with wastewater from gas plants that are an integral part of production operation, unless those wastewaters are classified as hazardous waste at the time of injection; a  well used to inject or withdraw gas from an underground storage facility; or  any   a  well drilled within or adjacent to an oil or gas pool for the purpose of obtaining water to be used in production stimulation or repressuring operations. (b) "Prospect well" or "exploratory well" means  any   a  well drilled to extend a field or explore a new, potentially productive reservoir. (c) "Active observation well" means a well being used for the sole purpose of gathering reservoir data, such as pressure or temperature in a reservoir being currently produced or injected by the operator, and the data is gathered at least once every three years. (d) "Idle well" means  any   a  well that has not produced oil or natural gas or has not been used for injection for six consecutive months of continuous operation during the last five or more years. An idle well does not include an active observation well. (e) "Long-term idle well" means  any   a  well that has not produced oil or natural gas or has not been used for injection for six consecutive months of continuous operation during the last 10 or more years. A long-term idle well does not include an active observation well.  (f) "Monitoring well" means a well used for the purposes of measuring reservoir pressures and temperatures; tracking subsurface fluid movement; or determining the physical, chemical, biological, or radiological properties of subsurface fluid.   SEC. 3.   Section 3011 is added to the   Public Resources Code   , to read:   3011. "Fluid" means a material or substance that flows or moves whether in a semisolid, liquid, sludge, gas, or other form or state and includes both hydrocarbon and nonhydrocarbon gases.   SEC. 4.   Section 3205.2 of the   Public Resources Code   is amended to read:  3205.2. (a) Notwithstanding Section 3204,  any   a  person who engages in the operation of a class II commercial  wastewater   waste fluid  disposal well, as defined in subdivision (d), shall file an indemnity bond with the supervisor for fifty thousand dollars ($50,000) for each well so used. The bond shall cover all operations of drilling, redrilling, deepening, altering casing, maintaining, or abandoning the well and attendant facilities. The bond shall be executed by the person as the principal, and by an authorized surety company as the surety, and, except for differences in the amount, shall be in substantially the same language and upon the same conditions as provided in Section 3204. (b) A blanket bond submitted under subdivision (a) or (c) of Section 3205 may be used in lieu of the bond required in subdivision (a), except that the termination and cancellation shall be in accordance with subdivision (c) of this section. (c) Notwithstanding Section 3207,  any   a  bond issued in compliance with this section may be terminated and canceled and the surety relieved of all obligations  thereunder   under the bond  when the well is properly abandoned or another valid bond has been substituted  therefor   for the bond  . (d) A class II commercial  wastewater   waste fluid  disposal well is a well that is used to dispose of oilfield  wastewater   waste fluid  for a fee and that is regulated by the division pursuant to this chapter and Subpart F (commencing with Section 147.250) of Part 147 of Title 40 of the Code of Federal Regulations.  SEC. 5.   Section 3227 of the   Public Resources Code   is amended to read:  3227. (a)    The owner of  any   a  well shall file with the supervisor, on or before the last day of each month, for the last preceding calendar month, a statement, in the form designated by the supervisor, showing all of the following:  (a)   (1)  The amount of oil and gas produced from each well during the period indicated, together with the gravity of the oil, the amount of water produced from each well, estimated in accordance with methods approved by the supervisor, and the number of days during which fluid was produced from each well.  (b)   (2)  The number of wells drilling, producing, injecting, or idle, that are owned or operated by the person.  (c)   (3)  What disposition was made of the gas produced from each field, including the names of persons, if any, to whom the gas was delivered, and  any  other information regarding the gas and its disposition that the supervisor may require.  (d)   (4)  What disposition was made of the  water   fluid  produced from each field, and the  composition and  amount of fluid or gas injected into each well used for enhanced recovery, underground storage of hydrocarbons, or waste  water   fluid  disposal and  any  other information regarding those wells that the supervisor may require.  Any   (b)     An  operator that produces oil by the application of mining or other unconventional techniques shall file a report with the supervisor, on or before March 1 of each year, showing the amount of oil produced by those techniques in the preceding calendar year.  Upon   (c)     Upon  request and making a satisfactory showing  therefor   for the request , a longer filing period may be established by the supervisor for any particular owner or operator.  SECTION 1.   Section 3016 is added to the Public Resources Code, to read: 3016. The division shall have the authority to permit the underground injection of gas, as defined in Section 3007, including the constituents associated with the gas that are produced from downhole in connection with exploration, development, or production operations for the purposes of disposal.