Bill Text: CA AB3019 | 2023-2024 | Regular Session | Amended

California Assembly Bill 3019

Bill Title: Oil and gas wells: Hazardous and Idle-Deserted Well Abatement Fund.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2024-04-25 - Re-referred to Com. on APPR. [AB3019 Detail]

Download: California-2023-AB3019-Amended.html

Amended IN Assembly April 24, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 3019

Introduced by Assembly Member Bains
(Coauthor: Assembly Member Bryan)

February 16, 2024

An act to amend Section 3206 of the Public Resources Code, relating to oil and gas.

LEGISLATIVE COUNSEL'S DIGEST

AB 3019, as amended, Bains. ~~Idle~~ Oil and gas wells: Hazardous and Idle-Deserted Well Abatement ~~Fund: legacy oil and gas wells: skilled and trained workforce.~~ Fund.

Existing law establishes the Geologic Energy Management Division in the Department of Conservation, under the direction of the State Oil and Gas Supervisor, who is required to supervise the drilling, operation, maintenance, and abandonment of oil and gas wells, as provided. Existing law requires the operator of any idle well to either (1) no later than May 1 of each year, for each idle well that was an idle well at any time in the last calendar year, file with the supervisor an annual fee according to a specified schedule of fees based on the length of time a well has been idle, or (2) file a plan with the supervisor to provide for the management and elimination of all long-term idle wells. Existing law also establishes the Hazardous and Idle-Deserted Well Abatement Fund in the State Treasury for the deposit of those idle well fees, and continuously appropriates moneys in the fund to the department for expenditure to mitigate a hazardous or potentially hazardous condition, by well plugging and abandonment, decommissioning the production facilities, or both, at a well of an operator, as provided.

Existing law establishes requirements that apply when a public entity is required by statute or regulation to obtain an enforceable commitment that a bidder, contractor, or other entity will use a skilled and trained workforce to complete a contract or project, as provided.

This bill would require the department to make available at least 25% of the funds to be expended each year from the Hazardous and Idle-Deserted Well Abatement Fund to a county in which there are at least 100 ~~legacy~~ orphaned or deserted oil and gas ~~wells, as defined,~~ wells and that attests to the department that it can plug and abandon those wells more quickly than the department can, as provided. The bill would also require the department, upon becoming aware of liquid or gas leaking from ~~a legacy~~ an orphaned or deserted oil and gas well, to immediately make available at least 10% of the funds to be expended each year from the fund to the county in which the well is located, if the county attests to the department that it can plug and abandon the well more quickly than the department can, as provided. The bill would require the department to distribute funds amongst eligible counties based on the number of wells that would be plugged and abandoned by the county and the cost estimate to plug and abandon the wells. The bill would require the expenditure of all money from the fund to comply with those skilled and trained workforce requirements, as provided.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

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

SECTION 1.

Section 3206 of the Public Resources Code is amended to read:

3206.

(a) The operator of any idle well shall do either of the following:

(1) No later than May 1 of each year, for each idle well that was an idle well at any time in the last calendar year, file with the supervisor an annual fee equal to the sum of the following amounts:

(A) One hundred fifty dollars ($150) for each idle well that has been an idle well for three years or longer, but less than eight years.

(B) Three hundred dollars ($300) for each idle well that has been an idle well for eight years or longer, but less than 15 years.

(C) Seven hundred fifty dollars ($750) for each idle well that has been an idle well for 15 years or longer, but less than 20 years.

(D) One thousand five hundred dollars ($1,500) for each idle well that has been an idle well for 20 years or longer.

(2) File a plan with the supervisor to provide for the management and elimination of all long-term idle wells.

(A) For the purposes of the plan required by this paragraph, elimination of an idle well shall be accomplished when the well has been properly abandoned in accordance with Section 3208, or it has been shown to the division’s satisfaction that, since the well became an idle well, the well has maintained production of oil or gas or been used for injection for a continuous six-month period.

(B) A plan filed pursuant to this paragraph shall meet all of the following requirements and conditions:

(i) The plan shall specify the time period that it covers. The plan and any renewal of the plan shall cover a time period of no more than five years and shall be subject to approval by the supervisor who may prioritize the order in which idle wells are addressed.

(ii) The plan shall be reviewed for performance annually by the supervisor, and be subject to amendment by the supervisor, or by the operator with the approval of the supervisor.

(iii) The required rate of long-term idle well elimination shall be based upon the number of idle wells under the control of an operator on January 1 of each year, as specified in clause (iv). If the operator has eliminated more wells than required in the prior two years, the supervisor may deduct from the new requirement the net total of long-term idle wells eliminated in excess of those previously required. In addition, the supervisor may require additional well testing requirements as part of the plan.

(iv) Unless and until the operator has no long-term idle wells, the plan shall require that operators with 250 or fewer idle wells eliminate at least 4 percent of their long-term idle wells each year, and, in no case, less than one long-term idle well; operators with 251 to 1,250, inclusive, idle wells eliminate at least 5 percent of their long-term idle wells each year, and, in no case, less than one long-term idle well; and operators with more than 1,250 idle wells eliminate at least 6 percent of their long-term idle wells each year, and, in no case, less than one long-term idle well.

(v) An operator who fails to comply with the plan, as determined by the supervisor after the annual performance review, is not eligible to use the requirements of this paragraph, for purposes of compliance with this section, for any of its idle wells. That operator may not propose a new idle well plan for the next five years. An operator may appeal to the director pursuant to Article 6 (commencing with Section 3350) regarding the supervisor’s rejection of a plan and plan amendments and the supervisor’s determination of the operator’s failure to comply with a plan. If the supervisor’s determination that the operator failed to comply with the plan is not timely appealed, or if the director upholds the supervisor’s determination upon appeal, then the operator shall immediately file the fees required under paragraph (1) for each year that the operator failed to comply with the plan.

(b) (1) All fees received under this section shall be deposited in the Hazardous and Idle-Deserted Well Abatement Fund, which is hereby created in the State Treasury. Notwithstanding Section 13340 of the Government Code, the moneys in the Hazardous and Idle-Deserted Well Abatement Fund are hereby continuously appropriated to the department for expenditure without regard to fiscal year, to mitigate a hazardous or potentially hazardous condition, by well plugging and abandonment, decommissioning the production facilities, or both, at a well of an operator subject to the requirements of this section.

(2) (A) The department shall make available at least 25 percent of the funds to be expended each year pursuant to paragraph (1) to a county that meets both of the following requirements:

(i) There are at least 100 ~~legacy~~ orphaned or deserted oil and gas wells located in the county.

(ii) The county attests to the department that it can plug and abandon those wells more quickly than the department can.

(B) If multiple counties meet the conditions described in clauses (i) and (ii) of subparagraph (A), the department shall make available at least 25 percent of the funds to be expended each year pursuant to paragraph (1) to be distributed between those counties.

(C) The department shall distribute the funds pursuant to subparagraph (B) amongst eligible counties based on the number of wells that would be plugged and abandoned by the county and based on the cost estimate to plug and abandon the wells pursuant to subparagraph (C) of paragraph (1) of subdivision (a) of Section 3206.3, unless information pursuant to Section 3205.7 is available.
~~(C)~~

(D) The funding requirements of this paragraph shall not apply if no counties meet the conditions described in clauses (i) and (ii) of subparagraph (A).

(3) (A) The department shall, upon becoming aware of liquid or gas leaking from ~~a legacy~~ an orphaned or deserted oil and gas well, immediately make available at least 10 percent of the funds to be expended each year pursuant to paragraph (1) to the county in which the well is located, if the county attests to the department that it can plug and abandon the well more quickly than the department can.

(B) (i) If a county described in subparagraph (A) plugs and abandons ~~a legacy~~ an orphaned or deserted oil and gas well that is leaking liquid or gas before receiving funds from the department, the department shall, to the extent allowable under existing law, reimburse the county for all costs incurred from plugging and abandoning the well, consistent with clause (ii).

(ii) The department shall not be required to expend more than 10 percent of the funds to be expended each year pursuant to paragraph (1) to reimburse a county, or multiple counties as described in subparagraph (C), for costs already incurred from plugging and abandoning ~~legacy~~ orphaned or deserted oil and gas wells that are leaking liquid or gas.

(iii) If the cost to a county described in clause (i), or to multiple counties as described in subparagraph (C), to plug and abandon the ~~legacy~~ orphaned or deserted oil and gas wells that are leaking liquid or gas exceeds 10 percent of the funds to be expended each year pursuant to paragraph (1), the department may, in its discretion, reimburse the county for some or all of the costs incurred.

(C) If multiple counties meet the condition described in subparagraph (A), the department shall immediately make available at least 10 percent of the funds to be expended each year pursuant to paragraph (1) to the counties in which the leaking ~~legacy~~ orphaned or deserted oil and gas wells are located, to be distributed between those counties, consistent with subparagraph (B).

(D) The department shall distribute the funds pursuant to subparagraph (C) amongst eligible counties based on the number of wells that would be plugged and abandoned by the county and based on the cost estimate to plug and abandon the wells pursuant to subparagraph (C) of paragraph (1) of subdivision (a) of Section 3206.3, unless information pursuant to Section 3205.7 is available.

(4) The expenditure of any moneys pursuant to this section shall comply with the skilled and trained workforce requirements in Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.

(5)For purposes of this subdivision, “legacy oil and gas wells” are wells where there is little or no information on the well’s abandonment procedure and there is no viable company with the responsibility to reabandon the well should it start leaking or pose a threat to the environment or to public health and safety.

(c) Failure to file, for any well, the fee required under this section shall be conclusive evidence of desertion of the well, permitting the supervisor to order the well abandoned pursuant to Section 3237.

(d) Nothing in this section prohibits a local agency from collecting a fee for regulation of wells.

(e) This section shall become operative on January 1, 2018.