Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including gas corporations. The Natural Gas Pipeline Safety Act of 2011, within the Public Utilities Act, designates the commission as the state authority responsible for regulating and enforcing federal law with respect to intrastate gas pipeline transportation and pipeline facilities. Existing law requires the Office of Environmental Health Hazard Assessment to evaluate the environmental and health risks posed by various substances.

This bill, if sufficient moneys are recovered by the commission and appropriated for the purpose of these provisions, would require the commission to authorize a study by the Office of Environmental Health Hazard Assessment of the long-term health impacts of the significant natural gas leak from the Aliso Canyon natural gas storage facility located in the County of Los Angeles that started approximately October 23, 2015, as specified. The bill would require the commission to publish and transmit the report by the Office of Environmental Health Hazard Assessment and its ongoing findings to the appropriate policy committees of the Legislature on a biennial basis, on or before January 1 of every even-numbered year, from 2018 until 2028. The bill would require the commission, consistent with its authority to bring enforcement actions, to order Southern California Gas Company to pay for the study. The bill would repeal these provisions on January 1, 2029.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including gas corporations. The Natural Gas Pipeline Safety Act of 2011, within the Public Utilities Act, designates the commission as the state authority responsible for regulating and enforcing federal law with respect to intrastate gas pipeline transportation and pipeline facilities. Existing law requires the Office of Environmental Health Hazard Assessment to evaluate the environmental and health risks posed by various substances.

This bill, if sufficient moneys are recovered by the commission and appropriated for the purpose of these provisions, would require the commission to authorize a study by the Office of Environmental Health Hazard Assessment of the long-term health impacts of the significant natural gas leak from the Aliso Canyon natural gas storage facility located in the County of Los Angeles that started approximately October 23, 2015, as specified. The bill would require the commission to publish and transmit the report by the Office of Environmental Health Hazard Assessment and its ongoing findings to the appropriate policy committees of the Legislature on a biennial basis, on or before January 1 of every even-numbered year, from 2018 until 2028. The bill would require the commission, consistent with its authority to bring enforcement actions, to order Southern California Gas Company to pay for the study. The bill would require the commission to prohibit Southern California Gas Company from recovering any of those costs in any rate approved by the commission. The bill would repeal these provisions on January 1, 2029.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including gas corporations. The Natural Gas Pipeline Safety Act of 2011, within the Public Utilities Act, designates the commission as the state authority responsible for regulating and enforcing federal law with respect to intrastate gas pipeline transportation and pipeline facilities. Existing law requires the Office of Environmental Health Hazard Assessment to evaluate the environmental and health risks posed by various substances.

This bill bill, if sufficient moneys are recovered by the commission and appropriated for the purpose of these provisions, would require the commission to authorize a study by the Office of Environmental Health Hazard Assessment of the long-term health impacts of the significant natural gas leak from the Aliso Canyon natural gas storage facility located in the County of Los Angeles that started approximately October 23, 2015, as specified. The bill would require the commission to publish and transmit the report by the Office of Environmental Health Hazard Assessment and its ongoing findings to the appropriate policy committees of the Legislature on a biennial basis, on or before January 1 of every even-numbered year, from 2018 until 2028. The bill would require the commission, consistent with its authority to bring enforcement actions, to order Southern California Gas Company to pay for the study. The bill would require the commission to prohibit Southern California Gas Company from recovering any of those costs in any rate approved by the commission. The bill would repeal these provisions on January 1, 2029.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including gas corporations. The Natural Gas Pipeline Safety Act of 2011, within the Public Utilities Act, designates the commission as the state authority responsible for regulating and enforcing federal law with respect to intrastate gas pipeline transportation and pipeline facilities. Existing law provides for the administration of various programs addressing public health by the State Department of Public Health. Existing law requires the Office of Environmental Health Hazard Assessment to evaluate the environmental and health risks posed by various substances.

This bill would require the commission and the department to jointly authorize a study by the Office of Environmental Health Hazard Assessment of the long-term health impacts of the significant natural gas leak from the Aliso Canyon natural gas storage facility located in the County of Los Angeles that started approximately October 23, 2015, as specified. The bill would require the commission to publish and transmit the report by the Office of Environmental Health Hazard Assessment and its ongoing findings to the appropriate policy committees of the Legislature on a biennial basis, on or before January 1 of every even-numbered year, from 2018 until 2032. 2028. The bill would require the commission, consistent with its authority to bring enforcement actions, to order Southern California Gas Company to pay for the study. The bill would require the commission to prohibit Southern California Gas Company from recovering any of those costs in any rate approved by the commission. The bill would repeal these provisions on January 1, 2029.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including gas corporations. The Natural Gas Pipeline Safety Act of 2011, within the Public Utilities Act, designates the commission as the state authority responsible for regulating and enforcing federal law with respect to intrastate gas pipeline transportation and pipeline facilities. Existing law provides for the administration of various programs addressing public health by the State Department of Public Health.

This bill would require the commission and the department to jointly study the long-term health impacts of the significant natural gas leak from the Aliso Canyon natural gas storage facility located in the County of Los Angeles that started approximately October 23, 2015, as specified. The bill would require the commission to report its ongoing findings to the Legislature on a biennial basis, on or before January 1 of every even-numbered year, from 2018 until 2032.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1903 (Wilk) - Aliso Canyon gas leak: health impact study

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1903 requires the California Public Utilities Commission (CPUC) to authorize the Office of Environmental Health Hazard Assessment (OEHHA) to study the long-term health impacts of the natural gas leak at the Aliso Canyon Natural Gas Storage Facility (Aliso Canyon) if funding is available.

Fiscal Impact:

Approximately $12.9 million for the first three years for OEHHA to perform the required evaluations and studies.

Ongoing annual costs of $3.3 million for OEHHA from the fourth year until

December 31, 2028.

Minor costs to the CPUC; however, the CPUC notes that the cumulative fiscal impact of the Aliso Canyon bill package is significant.

Background:

Regulation of natural gas storage wells. Although natural gas storage facilities are subject to the overall utilities jurisdiction of the CPUC, natural gas storage wells and associated piping and equipment fall under the jurisdiction of Department of Conservation’s Division of Oil, Gas and Geothermal Resources (DOGGR). Natural gas storage wells represent a small component of the overall Underground Injection Control (UIC) program (approximately 400 wells out of 52,000 statewide), which generally covers permitting, inspection, enforcement, mechanical integrity testing, plugging and abandonment oversight, data management, and public outreach. DOGGR has acknowledged widespread failures in the implementation of its UIC program, and has released a “Renewal Plan” to guide its commitment to reform. DOGGR has received personnel and funding through recent budgets to improve program implementation, data management, enforcement, and other functions.

Aliso Canyon gas leak impacts. On October 23, 2015, Southern California Gas Company (SoCalGas) discovered a significant natural gas leak from “Standard Sesnon 25” (SS 25) well at the Aliso Canyon. The Aliso Canyon is located adjacent to the community of Porter Ranch within the city of Los Angeles. Several days passed before SoCalGas disclosed to the community that a significant uncontrolled leak was occurring. The leak lasted for four months, resulted in the relocation of more than 5,000 households (at SoCal Gas’s expense), and resulted in hundreds of public health complaints. In addition to the public health concerns, ARB’s initial coarse estimates indicate that about 95,000 metric tons of methane was released into the air, adding approximately 20% to the statewide methane emissions during the duration of the leak.

The Administration’s Response. On January 6, 2016, Governor Brown issued a proclamation that declared the Aliso Canyon situation an emergency. The emergency proclamation detailed the administration's efforts to help stop the leak and directed further action to protect public health and safety, ensure accountability, and strengthen oversight of gas storage facilities. Among other things, the proclamation specifically directed OEHHA to convene an independent panel of scientific and medical experts to review public health concerns stemming from the gas leak and evaluate whether additional measures are needed to protect public health beyond those already put in place.

During and after the gas leak, OEHHA evaluated the health hazards and risks posed by the gas leak. Among other things, OEHHA’s evaluation concluded that the available air sample data does not indicate an acute health hazard, and current measured exposures to benzene (a cancer-causing chemical) are below the level of concern for chronic health effects.

The 2016-17 Budget includes $13.8 million and 57 positions to implement the Governor’s emergency proclamation, enhance efforts to improve public safety statewide, and strengthen oversight of gas storage facilities.

California Energy Commission: $1.7 million and three positions to monitor, model, and analyze the interaction of electricity and natural gas systems for reliability (Public Interest Research, Development, and Demonstration Fund).

Department of Conservation: $4.2 million and 20 positions to support increased regulatory activities (Oil, Gas and Geothermal Resources Fund).

Air Resources Board (ARB): $2.3 million and four positions to provide air quality monitoring near oil and gas operations (Oil, Gas and Geothermal Resources Fund).

Office of Environmental Health Hazards Assessment: $350,000 and two positions to support ARB's air quality monitoring (Oil, Gas and Geothermal Resources Fund).

California Public Utilities Commission: $1.5 million and 10 positions for increased workload related to regulating natural gas facilities and $1.7 million) and 11 positions to create the Division of Safety Advocates (Public Utilities Commission Utilities Reimbursement Account).

The Local Response. On February 2, 2016, SoCal Gas confirmed in writing its commitment to provide funding for reasonable costs to conduct a health study on potential impacts of the Aliso Canyon gas leak, as required by the Order for Abatement issued by the South Coast Air Quality Management District (SCAQMD). The order requires that the study is conducted by a third-party approved by the SCAQMD and SoCalGas, and that an advisory committee will be established to evaluate field data, analysis methods, and results. The scope of work proposes that the study: perform a literature search; identify of chemicals (or constituents) of potential concern associated with the release; determine the potential areas of concern and exposure point concentrations; generate chronic toxicity values for the widely-used natural gas odorants tetrahydrothiophene and tert-butylmercaptan; estimate chronic cancer risks and noncancer hazard indices; identify and describe key uncertainties; and prepare a written report. According to the SCAQMD, it is currently in contract negotiations with the National Academy of Sciences to conduct the initial phase of the study, which will determine subsequent phases of the study.

Proposed Law:

This bill:

1. Requires the CPUC to authorize OEHHA to study the long-term health impacts of the Aliso Canyon, if sufficient funds are available for the study.
2. Requires the study to evaluate the health impacts on individuals who resided within a 12-mile radius of the Aliso Canyon when the leak occurred and to evaluate the impact exposure to chemicals, such as methane, benzene, and mercaptan, had on residents.
3. Requires the CPUC to publish and provide a copy of the report to the relevant policy committees in the legislature.
4. Requires the CPUC to order SoCalGas to pay for the study.
5. Allows the CPUC to include the costs of the study in any penalties assessed on SoCal Gas.
6. Sunsets the provisions of the bill on January 1, 2029.

Related Legislation:

SB 380 (Pavley, Chapter 14, Statutes of 2016,) extends the Administration’s moratorium on injection at the Aliso Canyon facility until the wells are determined to be safe, and is currently before the Assembly Appropriations Committee.

SB 887 (Pavley, 2016) provides a framework for reforming oversight of natural gas storage facilities. The bill mandates minimum standards for equipment inspections, monitoring, and testing; training of personnel; leak monitoring; response planning; reporting; and information sharing. This bill is pending Assembly Appropriations Committee.

SB 888 (Allen, 2016) establishes the Governor’s Office of Emergency Services as the lead state responder in the event of a natural gas leak and bar leak-related costs from being borne by rate payers. This bill is pending Assembly Appropriations Committee.

SB 1383 (Lara, 2016) establishes goals for the emissions of short-lived climate pollutants (including methane). This bill is pending Assembly Appropriations Committee.

SB 1441 (Leno, 2016) prohibits the commission from allowing gas corporations to seek or receive recovery from ratepayers for the value of natural gas lost to the atmosphere during the extraction, production, storage, processing, transportation, and delivery of the natural gas. This bill is pending Assembly Appropriations Committee.

AB 1882 (Williams, 2016) prevents the approval of underground injection well projects without concurrence of the State Water Resources Control Board. This bill was held in Assembly Appropriations Committee.

AB 1902 (Wilk, 2016) establishes a three-year statute of limitations for Aliso Canyon leak-related civil actions. This bill was held in Assembly Judiciary Committee.

AB 1904 (Wilk, 2016) requires the Office of Environmental Health Hazard Assessment to undertake a study of odorants. This bill is pending Senate Environmental Quality Committee as an urgency measure.

AB 1905 (Wilk, 2016) requires an independent science study of natural gas storage facilities. This bill was held in Assembly Appropriations Committee.

Staff Comments:

This bill is one of three bills introduced by the author to study the health impacts of Aliso Canyon. Also, as indicated above, is one of many efforts throughout the state to assess and address health impacts resulting from the Aliso Canyon, most notably the SCAQMD effort described above. It is unclear how the study required in this bill will complement or otherwise impact the SCAQMD study.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Ben Hueso, Chair

2015 - 2016 Regular

Bill No: Hearing Date: 6/13/2016

SUBJECT:

DIGEST: This bill requires completion of a study of the long-term effects on health caused by the prolonged leak at the Aliso Canyon natural gas storage facility.

ANALYSIS:

Existing law:

1. Authorizes the California Public Utilities Commission (CPUC) to regulate private corporations that own, operate, control, or manage a line, plant, or system for the transportation or the production, generation, transmission, or furnishing of heat, power, or storage directly or indirectly to or for the public. Authorizes the CPUC to fix rates, establish rules, examine records, issue subpoenas, administer oaths, take testimony, punish for contempt, and prescribe a uniform system of accounts for all public utilities, including electrical and gas corporations, subject to its jurisdiction. (Article 12 of the California Constitution)
2. Requires that all charges demanded or received by any public utility for any product, commodity or service be just and reasonable, and that every unjust or unreasonable charge is unlawful. (Public Utilities Code §451)
3. Prohibits a gas corporation from recovering any fine or penalty in any rate approved by the CPUC. (Public Utilities Code §959)

This bill:

1. Directs the CPUC to authorize and the Office of Environmental Health Hazard Assessment (OEHHA) to undertake a study of the long-term health effect of the natural gas leak from the Aliso Canyon natural gas storage facility that occurred in 2015.
2. Requires the study to include, at least, the following:
   1. An investigation of the impact of the natural gas leak on the health of persons who resided within a 12-mile radius of the Aliso Canyon natural gas storage facility in the County of Los Angeles between October 23, 2015, and the date when the State Oil and Gas Supervisor has determined that the gas well safety review conducted pursuant to Order 1109, issued by the State Oil and Gas Supervisor on March 4, 2016, is complete.
   2. An evaluation of the impact on residents due to exposure to chemicals, including, but not limited to, methane, benzene, and mercaptan.
3. Directs CPUC to transmit the study and ongoing findings to the appropriate policy committees of the Legislature on a biennial basis, on or before January 1 of every even-numbered year, from 2018 until 2028.
4. Directs the CPUC to order Southern California Gas Company (SoCalGas) to pay for the study and to prohibit SoCalGas from recovering any of the costs of the study in any rate approved by the CPUC.
5. States that if the CPUC penalizes SoCalGas for its responsibilities related to the natural gas leak at the Aliso Canyon natural gas storage facility, the CPUC may include the costs of the study.
6. Conditions the requirement that CPUC authorize the study upon CPUC having recovered sufficient moneys to pay the costs of the entire study and the Legislature having appropriated those moneys for the study.

Background

Aliso Canyon Gas Storage Facility leak – a disaster. On October 23, 2016, the SoCalGas discovered a leak from a well at the company’s Aliso Canyon Gas Storage Facility. The Division of Oil, Gas and Geothermal Resources (DOGGR) – the state agency responsible for regulating Aliso Canyon’s natural gas storage wells – reports that it was informed of the leak soon after its discovery. Other state and local agencies, as well as nearby residents threatened by the leak, were notified sometime later.

For more than 100 days, the well continued to dump tons of methane gas into the atmosphere, along with irritants and other substances. According to the California Air Resource Board (ARB), the leak emitted almost 100,000 tons of methane, a potent greenhouse gas (GHG), adding approximately 20 percent to statewide methane emissions over its duration. Many resident from nearby Porter Ranch suffered noxious odors. Others reported more serious health effects, including nose bleeds, rashes and respiratory problems. Hundreds were relocated from their homes. Despite assurances from public health agencies, many fear the leak’s long term effects on health and wellbeing.

The investigation into the cause of the leak continues. The Attorney General, ARB, the City of Los Angeles and the County of Los Angeles have formally accused SoCalGas of violating California laws. The CPUC, which regulates the rates of SoCalGas, is considering penalties against the gas company.

Bill requires study of health effects of leak, limits cost recovery. This bill directs CPUC to authorize and the OEHHA to undertake a study of the long-term health effect of the natural gas leak, provided CPUC has recovered sufficient moneys to pay the costs of the entire study and the Legislature has appropriated those moneys for the study. This direction to the CPUC is appropriate, considering the gas was released by a facility owned by SoCalGas, a public utility regulated by the CPUC.

This bill also includes provisions concerning the ability of SoCalGas to recover the cost of the study from ratepayers. These provisions are inappropriate – the CPUC reports such a requirement might be unlawful – because they seek to punish SoCalGas without establishing wrongdoing. It may be the case that the various investigations into the Aliso Canyon leak reveal wrongdoing or negligence on the part of SoCalGas. And the CPUC will likely punish any such wrongdoing and negligence through fines and penalties against SoCalGas. Existing statute prohibits the gas company from recovering from ratepayers the cost of such fines and penalties.

The cost of the study required by this bill, however, is not punitive. The CPUC should retain the discretion to determine if the cost of the study is just, reasonable and recoverable from the gas company’s ratepayers. Therefore, the author may wish to amend the bill to delete the provision that prohibit SoCalGas from recovering any of the costs of the study in any rate approved by the CPUC, as follows:

SECTION 1.

 Section 911.3 is added to the Public Utilities Code, to read:

(a) If moneys are appropriated as specified in subdivision (d), the commission shall authorize a study by the Office of Environmental Health Hazard Assessment of the long-term health impacts of the significant natural gas leak from the Aliso Canyon natural gas storage facility located in the County of Los Angeles that started approximately October 23, 2015. The study shall include, but is not limited to, both of the following:

(1) An investigation of the impact of the natural gas leak on the health of persons who resided within a 12-mile radius of the Aliso Canyon natural gas storage facility in the County of Los Angeles between October 23, 2015, and the date when the State Oil and Gas Supervisor has determined that the gas well safety review conducted pursuant to Order 1109, issued by the State Oil and Gas Supervisor on March 4, 2016, is complete.

(2) An evaluation of the impact on residents due to exposure to chemicals, including, but not limited to, methane, benzene, and mercaptan.

(b) The commission shall publish and transmit the report by the Office of Environmental Health Hazard Assessment and its ongoing findings to the appropriate policy committees of the Legislature on a biennial basis, on or before January 1 of every even-numbered year, from 2018 until 2028.

(c) (1) Consistent with its authority to bring enforcement actions under this part, the commission shall order Southern California Gas Company to pay for the study described in subdivision (a).

(2) The commission shall prohibit Southern California Gas Company from recovering any of the costs ordered to be paid pursuant to paragraph (1) in any rate approved by the commission.

(3) (2) If the commission penalizes Southern California Gas Company for its responsibilities related to the natural gas leak at the Aliso Canyon natural gas storage facility, the commission may include the costs of the study described in subdivision (a) in any penalty assessment.

(d) The commission shall authorize and the Office of Environmental Health Hazard Assessment shall undertake the study described in subdivision (a) only if the commission has recovered sufficient moneys to pay the costs of the entire study pursuant to subdivision (c) and the Legislature has appropriated those moneys for the purpose of this section.

(e) This section shall remain in effect only until January 1, 2029, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2029, deletes or extends that date.

Double Referral. Should this bill be approved by the committee, it will be re-referred to the Senate Committee on Environmental Quality for its consideration.

Prior/Related Legislation

SB 380 (Pavley, Chapter 14, Statutes of 2016) placed a moratorium on injecting natural gas into the Aliso Canyon gas storage facility and establishes requirements for resuming natural gas injections at the facility.

AB 2798 (Gatto, 2016) expands the types of information a person proposing to build a thermal powerplant must provide to the CEC to newly include 1) the sources of the fuels to be used and 2) the extent to which the facility will increase or decrease reliance on underground natural gas storage. The bill passed the Assembly 78-0 and is under consideration by this committee.

SB 888 (Allen, 2015) establishes the California Office of Emergency Services (Cal OES) as the lead agency for emergency response to a large ongoing leak or release of natural gas and associated gases from a natural gas storage facility that poses a significant present or potential hazard to the public health and safety, property, or to the environment. The bill passed the Senate 28-10 and is pending referral in the Assembly.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Common Sense Kids Action

Los Angeles Unified School District

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the author:

A study must be done to figure out whether there are long-term health risks from the Aliso Canyon gas leak. Under existing law, the CPUC has regulatory authority over public utilities, including gas corporations. The Natural Gas Pipeline Safety Act of 2011, within the Public Utilities Act, designates the CPUC as the state authority responsible for regulating and enforcing federal law with respect to intrastate gas pipeline transportation and pipeline facilities. Existing law requires the OEHHA to evaluate the environmental and health risks posed by various substances.

-- END --

(Without Reference to File)

ASSEMBLY THIRD READING

ATR Bill Id:AB 1903

Author:(Wilk)

As Amended Ver:May 31, 2016

Majority vote

SUMMARY: Requires the California Public Utilities Commission (CPUC) to authorize a study of the long-term health impacts associated with the natural gas leak from the Aliso Canyon facility (facility), to be conducted by the Office of Environmental Health Hazard Assessment (OEHHA). Specifically, this bill:

1. Requires an investigation of the impact of the natural gas leak on the health of persons residing within a 12-mile radius of the facility from the date of the leak until the gas well safety review is complete.
2. Requires the study to include an evaluation of the impact on residents due to exposure to chemicals, including, but not limited to, methane, benzene, and mercaptan.
3. Requires CPUC to publish and transmit the OEHHA report to the appropriate Legislative policy committees biennially beginning January 1, 2018, until 2028.
4. Requires CPUC to order Southern California Gas Company (SoCalGas) to pay for the study and prohibits SoCalGas from recovering any of the costs from rates.
5. Authorizes CPUC to include the costs of the study in any penalty assessment if SoCalGas is penalized.
6. Sunsets the provisions on January 1, 2029.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Increased costs over the first three years of $12.5 million for OEHHA to perform the various evaluations and studies.
2. Ongoing annual costs of $3.3 million for OEHHA until from the fourth year until December 31, 2028.
3. CPUC costs are minor and absorbable.

This bill requires SoCalGas to pay for the costs of the study.

COMMENTS:

1. Purpose: According to the author, residents of Porter Ranch have many questions regarding the Aliso Canyon facility gas leak and the long-term health impacts. This bill requires the CPUC and OEHHA to study and report on potential long-term health impacts.
2. Aliso Canyon Gas Leak: The Aliso Canyon Gas Storage Facility is owned by the SoCalGas and is located in Los Angeles County just north of Porter Ranch. SoCalGas is a gas corporation regulated by the CPUC.

On October 23, 2015, SoCalGas detected a methane gas leak at its Aliso Canyon Gas Storage Facility at Well # SS-25. Following an initial evaluation and several attempts to stop the leak, SoCalGas began drilling a relief well in order to plug the leaking well. The initial attempts to plug the leak failed, and the leak lasted 112 days before being permanently capped on February 18, 2016.

A study in the journal Science confirmed that the methane gas leak was not only the largest in California's history, but also the second largest in the nation. According to the lead author of the study, as much as 60 metric tons of methane spewed from the leak each hour.

The leak displaced over 5,000 households, requiring families to move into temporary housing and hotels provided by SoCalGas.

Since October 25, 2016, no natural gas has been injected into the facility.

However, on April 13, 2016, residents living near the natural gas storage field complained of a strong odor. The Governor's Office of Emergency Services (OES) reported it received a complaint about a gas and petroleum leak at 8:25 a.m. Saturday, April 16, 2016 from SoCalGas at the facility. Saturday's leak from a well-known as Standard Sesnon 1-21 was stopped at 10:25 a.m. after it had spewed less than 50 gallons of oil spray and an unknown amount of natural gas, according to an OES document.

1. Chronology of Events and State Response: Following the detection of the leak, in November and December 2015, the Department of Conservation's Division of Oil, Gas and Geothermal Resources (DOGGR) and the CPUC issued orders establishing a moratorium on natural gas injection at Aliso Canyon. The orders included requirements to provide data, retain evidence, and track the costs of the effort to plug the well. Additionally, the Air Resources Board (ARB) began collecting and publishing data on methane emissions caused by the leak.

On January 6, 2016, the Governor issued a Proclamation directing various state entities to oversee SoCalGas' actions to stop the leak, protect public safety, ensure accountability and strengthen oversight of natural gas storage facilities.

On February 11, 2016, SoCalGas announced it had temporarily controlled the flow of natural gas at the leaking well and would continue to work in coordination with DOGGR and other agencies during the process of permanently sealing the well.

On February 18, 2016, DOGGR confirmed the leaking well was permanently sealed and taken out of service.

On March 4, 2016, DOGGR issued an order to SoCal Gas to follow a comprehensive safety review, upgrade equipment and detection devices, and plug and abandon wells as specified. This order prohibits the Supervisor from lifting the injection prohibition until all specified requirements have been met.

On March 28, 2016, the CPUC, DOGGR, ARB, and California Energy Commission (CEC) issued an update on the status of state actions taken in response to the gas leak.

1. Governor's Emergency Proclamation and Budget Proposals: In addition to the provisions in this bill, the Governor's Proclamation required DOGGR to issue emergency regulations and required all gas storage facilities in the state to undertake specific actions to protect against uncontrolled has leaks. Additionally, the Proclamation: a) requires ARB to expand its monitoring of emissions in the community; b) requires the Office of Environmental Health Hazzard Assessment (OEHHA) to review health concerns and determine if additional measures are necessary; and c) requires the CPUC and CEC, in coordination with the ISO, to take all steps necessary to ensure energy reliability during the moratorium.

On April 1, 2016, the Governor revised his proposed January budget to include additional augmentations to the following agencies to implement the directed actions and improve public safety statewide:

1. CEC – $1,739,000 and three positions to monitor, model and analyze the interaction of electricity and natural gas systems for reliability (Public Interest Research, Development, and Demonstration Fund);
2. DOGGR – $4,172,000 and 20 positions to support increased regulatory activities and $1 million to increase efforts to remediate orphan wells (Oil, Gas and Geothermal Resources Fund);
3. ARB – $2,276,000 and four positions to provide air quality monitoring near oil and gas operations (Oil, Gas and Geothermal Resources Fund);
4. OEHHA – $350,000 and 2 positions to support ARB's air quality monitoring (Oil, Gas and Geothermal Resources Fund);
5. CPUC – $1,479,000 and 10 positions for increased workload related to regulating natural gas facilities and $1,694,000 and 11 positions to create the Division of Safety Advocates (Public Utilities Commission Utilities Reimbursement Account).
6. Related Legislation: Numerous bills have been introduced to respond to the Aliso Canyon Gas Storage Facility leak.

AB 1902 (Wilk) of the current legislative session: would have extended the statute of limitations for civil actions resulting from exposure to hazardous materials from the Aliso Canyon gas leak. This bill failed passage in the Assembly Judiciary Committee.

AB 1904 (Wilk) of the current legislative session: requires OEHHA to evaluate and report to the Legislature on natural gas odorants and potential alternatives by January 1, 2018. Pending in the Assembly.

AB 1905 (Wilk) of the current legislative session: requires the Secretary of the Natural Resources Agency to conduct and complete an independent scientific study on natural gas injection and storage practices by July 1, 2017. This bill failed passage in the Assembly Appropriations Committee.

SB 380 (Pavley), Chapter 14, Statutes of 2016: continues the moratorium on injecting natural gas into the Aliso Canyon gas storage facility, requires DOGGR to complete a gas storage well comprehensive safety review (safety review), and requires the CPUC to determine the feasibility of minimizing or eliminating use of the facility.

SB 887 (Pavley) of the current legislative session: requires DOGGR to prescribe standards for natural gas storage wells and requires annual inspections. Pending in the Assembly.

Analysis Prepared by: Sue Kateley / U. & C. / (916) 319-2083 FN: 0003359

Date of Hearing: April 27, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1903

Author:(Wilk) – As Amended Ver:April 4, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the California Public Utilities Commission (PUC) to authorize a study of the long-term health impacts associated with the natural gas leak from the Aliso Canyon facility (facility), to be conducted by the Office of Environmental Health Hazard Assessment (OEHHA). Specifically, this bill:

1. Requires an investigation of the impact of the natural gas leak on the health of persons residing within a 12-mile radius of the facility from the date of the leak until the gas well safety review is complete.
2. Requires the study to include an evaluation of the impact on residents due to exposure to chemicals, including, but not limited to, methane, benzene, and mercaptan.
3. Requires PUC to publish and transmit the OEHHA report to the appropriate Legislative policy committees biennially beginning January 1, 2018, until 2028.
4. Requires PUC to order Southern California Gas Company (SoCalGas) to pay for the study and prohibits SoCalGas from recovering any of the costs from rates.
5. Authorizes PUC to include the costs of the study in any penalty assessment if SoCalGas is penalized.
6. Sunsets the provisions on January 1, 2029.

FISCAL EFFECT:

1. Increased costs over the first three years of $12.5 million for OEHHA to perform the various evaluations and studies.
2. Ongoing annual costs of $3.3 million for OEHHA until from the fourth year until December 31, 2028
3. PUC costs are minor and absorbable.

This bill requires SoCalGas to pay for the costs of the study but does not provide a mechanism for OEHHA reimbursement.

COMMENTS:

1. Purpose. According to the author, residents of Porter Ranch have many questions regarding the Aliso Canyon facility gas leak and the long-term health impacts. This bill requires the PUC and OEHHA to study and report on potential long-term health impacts.
2. Aliso Canyon Gas Leak. The Aliso Canyon Gas Storage Facility is owned by the SoCalGas and is located in Los Angeles County just north of Porter Ranch. SoCalGas is a gas corporation regulated by the PUC.

On October 23, 2015, SoCalGas detected a methane gas leak at its Aliso Canyon Gas Storage Facility at Well # SS-25. Following an initial evaluation and several attempts to stop the leak, SoCalGas began drilling a relief well in order to plug the leaking well. The initial attempts to plug the leak failed, and the leak lasted 112 days before being permanently capped on February 18, 2016.

A study in the journal Science confirmed that the methane gas leak was not only the largest in California's history, but also the second largest in the nation. According to the lead author of the study, as much as 60 metric tons of methane spewed from the leak each hour.

The leak displaced over 5,000 households, requiring families to move into temporary housing and hotels provided by SoCalGas.

Since October 25, 2016, no natural gas has been injected into the facility.

However, on April 13, 2016, residents living near the natural gas storage field complained of a strong odor. The Governor’s Office of Emergency Services (OES) reported it received a complaint about a gas and petroleum leak at 8:25 a.m. Saturday, April 16, 2016 from SoCalGas at the facility. Saturday’s leak from a well known as Standard Sesnon 1-21 was stopped at 10:25 a.m. after it had spewed less than 50 gallons of oil spray and an unknown amount of natural gas, according to an OES document.

1. Chronology of Events and State Response. Following the detection of the leak, in November and December 2015, DOGGR and the PUC issued orders establishing a moratorium on natural gas injection at Aliso Canyon. The orders included requirements to provide data, retain evidence, and track the costs of the effort to plug the well. Additionally, the Air Resources Board (ARB) began collecting and publishing data on methane emissions caused by the leak.

On January 6, 2016, the Governor issued a Proclamation directing various state entities to oversee SoCalGas' actions to stop the leak, protect public safety, ensure accountability and strengthen oversight of natural gas storage facilities.

On February 11, 2016, SoCalGas announced it had temporarily controlled the flow of natural gas at the leaking well and would continue to work in coordination with DOGGR and other agencies during the process of permanently sealing the well.

On February 18, 2016, DOGGR confirmed the leaking well was permanently sealed and taken out of service.

On March 4, 2016, DOGGR issued an order to SoCal Gas to follow a comprehensive safety review, upgrade equipment and detection devices, and plug and abandon wells as specified. This order prohibits the Supervisor from lifting the injection prohibition until all specified requirements have been met.

On March 28, 2016, the PUC, DOGGR, ARB, and CEC issued an update on the status of state actions taken in response to the gas leak.

1. Governor's Emergency Proclamation and Budget Proposals. In addition to the provisions in this bill, the Governor's Proclamation required DOGGR to issue emergency regulations and required all gas storage facilities in the state to undertake specific actions to protect against uncontrolled has leaks. Additionally, the Proclamation: 1) requires ARB to expand its monitoring of emissions in the community; 2) requires the Office of Environmental Health Hazzard Assessment (OEHHA) to review health concerns and determine if additional measures are necessary; and 3) requires the PUC and CEC, in coordination with the ISO, to take all steps necessary to ensure energy reliability during the moratorium.

On April 1, 2016 the Governor revised his proposed January budget to include additional augmentations to the following agencies to implement the directed actions and improve public safety statewide:

1. CEC – $1,739,000 and three positions to monitor, model and analyze the interaction of electricity and natural gas systems for reliability (Public Interest Research, Development, and Demonstration Fund);
2. DOGGR – $4,172,000 and 20 positions to support increased regulatory activities and $1 million to increase efforts to remediate orphan wells (Oil, Gas and Geothermal Resources Fund);
3. ARB – $2,276,000 and four positions to provide air quality monitoring near oil and gas operations (Oil, Gas and Geothermal Resources Fund);
4. OEHHA – $350,000 and 2 positions to support ARB's air quality monitoring (Oil, Gas and Geothermal Resources Fund);
5. PUC – $1,479,000 and 10 positions for increased workload related to regulating natural gas facilities and $1,694,000 and 11 positions to create the Division of Safety Advocates (Public Utilities Commission Utilities Reimbursement Account).
6. Related Legislation. Numerous bills have been introduced to respond to the Aliso Canyon Gas Storage Facility leak. AB 1902 (Wilk) would have extended the statute of limitations for civil actions resulting from exposure to hazardous materials from the Aliso Canyon gas leak. This bill failed in the Judiciary Committee.

AB 1904 (Wilk) requires OEHHA to evaluate and report to the Legislature on natural gas odorants and potential alternatives by January 1, 2018. This bill is on suspense in this committee.

AB 1905 (Wilk) requires the Secretary of the Natural Resources Agency to conduct and complete an independent scientific study on natural gas injection and storage practices by July 1, 2017. This bill is on suspense in this committee.

SB 380 (Pavley) continues the moratorium on injecting natural gas into the Aliso Canyon gas storage facility, requires the Division of Oil, Gas and Geothermal Resources (DOGGR) to complete a gas storage well comprehensive safety review (safety review), and requires the California Public Utilities Commission (PUC) to determine the feasibility of minimizing or eliminating use of the facility. This bill is pending on the Assembly floor.

SB 887 (Pavley) requires DOGGR to prescribe standards for natural gas storage wells and requires annual inspections. This bill is pending in the Senate Appropriations Committee.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: March 30, 2016

ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE

Mike Gatto, Chair

ABPCA Bill Id:AB 1903 (

Author:Wilk) – As Introduced Ver:February 11, 2016

SUBJECT: Aliso Canyon gas leak: health impact study

SUMMARY: Requires the California Public Utilities Commission (CPUC) and Department of Public Health to prepare and publish biennial studies on long term health impacts related to the gas leak at the Aliso Canyon Gas Storage Facility. Specifically, this bill:

1. Requires biennial studies on long term health impacts related to the gas leak at the Aliso Canyon Gas Storage Facility for those persons who resided within a 12-mile radius of the Aliso Canyon Natural Gas Storage Facility during a specified time period.
2. Requires the study to include an evaluation of the impact on residents due to exposure to chemicals, including, but not limited to, methane, benzene, and mercaptan.
3. Requires the study to be published biennially beginning January 1, 2018, through 2032.
4. Specifies the intent of the Legislature to pay for the cost of these studies from any monies collected from penalties assessed against the Southern California Gas Company (SoCalGas).
5. Sunsets the statute on January 1, 2033.

EXISTING LAW:

1. Authorizes the CPUC to regulate private corporations that own, operate, control, or manage a line, plant, or system for the transportation or the production, generation, transmission, or furnishing of heat, power, or storage directly or indirectly to or for the public. (California Constitution, Article XII, Section 3)
2. Authorizes the CPUC to regulate gas corporations, including underground storage. (Public Utilities Code Sections 216(a), 221, 222, 227, and 228)
3. Authorizes the CPUC to require that utility charges are just and reasonable and requires utilities to maintain facilities as necessary to promote safety, health, comfort, and convenience of patrons, employees, and the public. (Public Utilities Code Section 451)
4. Authorizes the CPUC to do all things, whether specifically designated in this part or in addition thereto, which are necessary and convenient in the exercise of such power and jurisdiction. (Public Utilities Code Section 701)
5. Establishes that the CPUC is responsible for regulating and enforcing intrastate gas pipeline transportation and pipeline facilities pursuant to Chapter 601 (commencing with Section 60101) of Subtitle VIII of Title 49 of the United States Code, including the development, submission, and administration of a state pipeline safety program certification for natural gas pipelines pursuant to Section 60105 of that chapter. (Public Utilities Code Section 955(b))
6. Requires gas storage facilities to receive a Certificate of Public Convenience and Necessity (CPCN) before constructing a gas storage facility. Requires that the CPUC grant a CPCN on the grounds that the present or future public convenience and necessity requires or will require the gas storage facility. (Public Utilities Code Section 1001, et seq.)
7. Authorizes the CPUC to investigate, as part of the rate proceeding for any gas corporation, impediments to the in-state production and storage of natural gas and encourage in-state production or storage of natural gas unless the CPUC finds it likely that it will result in consequences adverse to the interests of gas customers. (Public Utilities Code Section 1001, et seq.)

Directs the Department of Conservation, Division of Oil, Gas and Geothermal Resources (DOGGR) to:

Supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production so as to prevent, as far as possible, damage to life, health, property, and natural resources; damage to underground oil and gas deposits from infiltrating water and other causes; loss of oil, gas, or reservoir energy, and damage to underground and surface waters suitable for irrigation or domestic purposes by the infiltration of, or the addition of, detrimental substances.

Supervise the drilling, operation, maintenance, and abandonment of wells so as to permit the owners or operators of the wells to utilize all methods and practices known to the oil industry for the purpose of increasing the ultimate recovery of underground hydrocarbons and which, in the opinion of the supervisor, are suitable for this purpose in each proposed case.

Encourage the wise development of oil and gas resources to best meet oil and gas needs in this state. (Public Resources Code Section 3106)

1. Requires the Department of Conservation to maintain surveillance over underground gas storage facilities to insure that the original reserves are not lost, that drilling of new wells is conducted properly, and that no damage occurs to the environment by reason of injection and withdrawal of gas. (Public Resources Code Section 3403.5)

FISCAL EFFECT: Unknown.

COMMENTS:

1. Author's Statement: "Residents of Porter Ranch have many questions as it relates to the Aliso Canyon facility gas leak. One question in particular was: What are the long-term health impacts?

"In order to address the question, Assembly Bill 1903 would require the [CPUC] and Department of Public Health to study the long-term health impacts of the Aliso Canyon gas storage facility gas leak."

1. Background: A leak was discovered on October 23, 2015, at a natural gas well located at the Aliso Canyon storage facility, owned and operated by SoCalGas. SoCalGas made several unsuccessful well "kill" attempts. On December 4, 2015, SoCalGas began drilling a relief well to intercept and cap the leaking well near the bottom of the well. Through November and December 2015 DOGGR and the CPUC issued orders to establish a moratorium on natural gas injection at Aliso Canyon, provide data, retain evidence, and track costs of the effort to plug the well. The Air Resources Board began collecting and publishing data on methane emissions caused by the leak.

On January 6, 2016, the Governor issued a Proclamation^[1] directing various state entities to oversee SoCalGas' actions to stop the leak, protect public safety, ensure accountability and strengthen oversight of natural gas storage facilities. Relevant to this bill, portions of the Governor's Proclamation:

• 1. Ordered DOGGR to continue its prohibition against SoCalGas injecting any gas into the Aliso Canyon Storage Facility until a comprehensive review of the safety of the storage wells and the air quality of the surrounding community utilizing independent experts is completed; and
  2. Tasked the California Energy Commission in coordination with CPUC to maintain energy reliability during this incident.

On February 11, 2016, SoCalGas announced it had temporarily controlled the flow of natural gas at the leaking well and will continue to work in coordination with DOGGR and other agencies during the process of permanently sealing the well.

1. Exposure Period for the Study: The current version of this bill establishes a study group to include persons who resided within a 12-mile radius between October 23, 2015, and an unspecified date. The leaking well was permanently sealed on February 12, 2016. DOGGR has ordered SoCalGas to conduct a safety review of the wells at Aliso Canyon.

Following the sealing of the leaking well, the Los Angeles County Department of Public Health reported^[2] that while a reduction in the number of odor reports from residents was observed, "the measured levels of methane have occasionally been elevated above what would be expected in the area, suggesting there could be other local sources of natural gas being released. This could explain the occurrence of intermittent odors and recurring symptoms experienced by some residents upon returning to their homes. Further study is required to understand this phenomenon."

The Los Angeles Department of Public Health also reports that while many of the temporarily relocated residents have re-occupied their homes without incident, some residents are reporting symptoms, including headache; stomach upset; dizziness; and eye, nose, and skin irritation, sometimes in the absence of odors after the well was sealed.

The author may wish to consider an amendment to include persons who resided within the 12-mile radius for the period of October 23, 2015, and the date when DOGGR determines the safety review is complete.

1. Public Health Experts involved with Aliso Canyon Health Assessment: The Office of Environmental Health Hazard Assessment (OEHHA) has been tasked by the Governor's Office to convene an independent panel of scientific and medical experts to review public health concerns stemming from the gas leak and evaluate whether additional measures are needed to protect public health beyond those already put in place. The panel of experts has been formed. It is comprised of eight recognized experts from six universities within the University of California system. The panel includes experts in medicine, toxicology, epidemiology and exposure sciences.

The author may wish to consider an amendment to instead direct OEHHA to prepare the biennial studies.

1. Penalties pay for the studies: The current version of the bill declares legislative intent to have the CPUC order SoCalGas to pay for the studies from penalties assessed against SoCalGas. The CPUC has not yet completed its investigation of the cause of the leak nor has it opened a proceeding on the subject. It can take many years before a proceeding reaches a conclusion. As a result, the outcome of the proceeding and whether or not there will be penalties, or how much those penalties will be, can only be speculated at this point.

In order to ensure that the studies are funded, regardless of the outcome of a future proceeding, the author may wish to consider an amendment to direct the CPUC to require SoCalGas to fund the studies and that the funding not be paid by ratepayers

1. Sunset date: This bill currently sunsets the study in 2032.

The author may wish to consider an amendment to sunset the study in 2028, which would allow for a 10-year study period and five reports. If the studies indicate a need for ongoing studies, this sunset can be extended at a later date.

1. Double referred: This bill is double referred to the Assembly Health Committee.
2. Suggested amendments: The author may wish to consider the following amendments:
   1. Replace the Department of Public Health and instead task the OEHHA with the requirement to perform the studies.
   2. Specify the persons to be studied to be those residents who were within a 12-mile radius for the period between October 23, 2015, and the date when DOGGR determines the well safety review is complete.
   3. Require the CPUC to order SoCalGas to fund the studies and specify that the CPUC cannot approve a request by SoCalGas to collect monies for these studies from ratepayers.
   4. Reduce the period of the study to 10 years and reduce the sunset of the statute accordingly.

Section 911.3 is added to the Public Utilities Code, to read:

911.3.  (a) The commission and the State Department of Public Health jointly The commission shall authorize a study of the long-term health impacts by the Office of Environmental Health Hazard Assessment of the significant natural gas leak from the Aliso Canyon natural gas storage facility located in the County of Los Angeles that started approximately October 23, 2015. The study shall include, but is not limited to, both of the following:

(1) An investigation of the impact of the natural has gas leak on the health of persons who resided within a 12-mile radius of the Aliso Canyon natural gas storage facility in the County of Los Angeles between October 23, 2015, and the date when the Department of Conservation Supervisor of the Division of Oil Gas and Geothermal Resources has determined that its gas well safety review pursuant to Order 1109, issued March 4, 2016, is complete.

(2) An evaluation of the impact on residents due to exposure to chemicals, including, but not limited to, methane, benzene, and mercaptan.

(b) (1) The commission shall publish and transmit the report by the Office of Environmental Health Hazard Assessment and its ongoing findings to the appropriate policy committees of the Legislature on a biennial basis, on or before January 1 of every even-numbered year, from 2018 until 2032 2028.

(2) The report shall be submitted in compliance with Section 9795 of the Government Code.

(c) It is the intent of the Legislature that the study conducted pursuant to subdivision (a) should be paid for out of moneys collected from any penalties assessed against Southern California Gas Company pursuant to this part in regards to the natural gas leak at the Aliso Canyon natural gas storage facility located in the County of Los Angeles.

(1) The commission shall order Southern California Gas Company to pay for studies conducted pursuant to subdivision (a).

(2) The commission shall not allow Southern California Gas Company to recover the cost of these studies conducted pursuant to subdivision (a) in any rate approved by the commission.

(3) If the commission penalizes Southern California Gas Company for its responsibilities related to the natural gas leak at the Aliso Canyon Natural Gas Storage Facility it may include the costs of these studies conducted pursuant to subdivision (a) in any penalty assessment.

(d) This section shall remain in effect only until January 1, 2033 2029, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 20332029, deletes or extends that date.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

Analysis Prepared by: Sue Kateley / U. & C. / (916) 319-2083

1. https://www.gov.ca.gov/news.php?id=19264 ↑

2. http://file.lacounty.gov/bc/q1_2016/cms1_240709.pdf ↑