SB 551

Bill Subjects

Abstract

Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law requires the department to report on October 1, 2020, to the Legislature on the number of hazardous wells, idle-deserted wells, deserted facilities, and hazardous facilities remaining, the estimated costs of abandoning or decommissioning those wells and facilities, and a timeline for future abandonment and decommissioning of those wells and facilities with a specific schedule of goals. This bill would extend that reporting date from October 1, 2020, to April 1, 2021. The bill would require the division, in collecting the information for the report, to conduct field inspections of hazardous wells, idle-deserted wells, deserted facilities, and hazardous facilities and to include information in the report from the field inspections that can be used to prioritize those wells and facilities in the specific schedule of goals. Existing law requires the State Oil and Gas Supervisor, on or before July 1, 2019, and annually thereafter until July 1, 2026, to prepare and transmit to the Legislature a comprehensive report containing specified information on the status of idle and long-term idle wells for the preceding calendar year. This bill would require the division, for the report due on or before July 1, 2021, and each report thereafter, to conduct inspections of production facilities attendant to long-term idle wells to ensure compliance with the applicable statutory requirements. The bill would require information summarizing violations and pertinent findings in these inspections to be included in the applicable reports. Under existing law, a person who fails to comply with requirements relating to the regulation of oil or gas operations is guilty of a misdemeanor. This bill would require the division, commencing July 1, 2022, to begin requiring each operator of an oil or gas well to submit a report to the supervisor that demonstrates the operator's total liability to plug and abandon all wells and to decommission all attendant production facilities, including site remediation, on a schedule determined by the supervisor. The bill would require the supervisor to set the schedule in a manner that staggers the initial reports by operators to ensure that some reporting commences on July 1, 2022, that at least 12 of required operators will have submitted their initial report by July 1, 2024, that all initial reporting is completed by July 1, 2026, and that followup reporting is required for each operator on a continual basis that is no less frequent than every 5 years after the initial report. The bill would require the division to develop criteria, including certain requirements, to be used by operators for estimating costs to plug and abandon wells and decommission attendant production facilities, including site remediation. If the supervisor determines that the operator has failed to use the requisite criteria or has otherwise provided estimates in the report that are neither credible nor accurate, the bill would authorize the supervisor to request the operator to submit revised estimates for review and approval on a timely schedule to be determined by the supervisor. Because a violation of these reporting requirements by an operator 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.