The amendments proposed in AB 1738 include nonsubstantive changes to the definition of an idle well, which is identified as any well that has not produced oil or natural gas for a consecutive period of 24 months or has not been utilized for other specific purposes such as enhanced oil recovery or pressure management. This classification is significant as it influences the regulatory requirements for well maintenance and abandonment, ultimately affecting the operational practices of oil and gas producers in California.
Summary
Assembly Bill 1738, introduced by Assembly Member Kalra, focuses on amending the definition of 'idle well' within Section 3008 of the Public Resources Code. The bill aims to clarify terminology used in the regulation of oil and gas wells by the Division of Oil, Gas, and Geothermal Resources, under the Department of Conservation. Specifically, it addresses the criteria that determine when a well is classified as idle, ensuring consistency in how these definitions are applied across various regulatory contexts.
Contention
As this bill makes primarily nonsubstantive changes to existing definitions, it has not engendered significant public controversy or debate. However, industry stakeholders may scrutinize these definitions to assess any impacts on existing idle wells, especially for those that have been offline for extended periods. The clarity provided by the bill could lead to increased regulatory compliance requirements for operators of such wells, which might in turn affect operational costs and actions taken by companies in managing their well inventory.
The temporary exemption for oil and gas wells employing a system to avoid flaring, an exemption from gross production tax for gas produced from certain enhanced oil recovery projects, and the definition of development incentive well; to provide an effective date; and to provide an expiration date.