CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1657

Author:(Eduardo Garcia)

As Amended Ver:August 25, 2020

Majority vote

SUMMARY:

This bill requires, on or before March 1, 2021, the California Energy Commission (CEC) to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with 14 members appointed by a combination of the CEC, other state agencies, Assembly Speaker, and Senate Committee on Rules.

The Senate Amendments:

Delete the Assembly version of this bill and instead:

1. Removes all provisions from the bill relating to establishing an Office of the Salton Sea within the California Natural Resources Agency and requiring the Secretary of Natural Resources to establish a Salton Sea Oversight Committee.
2. Requires the CEC, on or before March 1, 2021, to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with 14 specified members appointed by the CEC, other state agencies, the Speaker of the Assembly, the Senate Committee on Rules, and the Governor.
3. Requires the Blue Ribbon Commission to review, investigate, and analyze certain issues and potential incentives, as described, regarding lithium extraction and use in California, and to consult, if feasible, with the United States Environmental Protection Agency and the United States Department of Energy in performing these tasks.
4. Requires the Blue Ribbon Commission to submit, on or before October 1, 2022, a report to the Legislature documenting its findings and recommendations.

COMMENTS:

Vision of California "Lithium Valley." Global demand for lithium is expected to grow as much as ten-fold over the next decade, particularly with the increasing use of lithium for batteries within multiple energy and transportation applications. Currently, virtually all of the lithium used in the United States is produced outside the country and most is mined in Argentina, Chile, China, and Australia. The only current domestic supply comes from the Silver Peak mine in Nevada. The CEC believes an increase in demand for lithium coupled with advances in processes and technologies for lithium recovery, may provide California with a unique opportunity to foster a more environmentally-sound lithium product coupled with geothermal electricity production. Increased recovery of lithium from geothermal brine is also expected to generate revenue and local in-state economic development opportunities in an economically-depressed area, and the potential to produce a world-class source of battery-grade lithium within California. Some of the most efficient battery types use lithium as a key element, and uniquely high concentrations of the dissolved soft metal are found in the brine produced by the state's geothermal hotspots. California has vast lithium deposits – potentially as much as one-third of the world's current lithium demand according to some industry estimates. Most of these deposits are located in, and around, the Salton Sea in the Imperial Valley.

Geothermal energy resources. California is home to some of the world's most abundant geothermal energy resources. The more than 40 geothermal power plants operating in the state tap into naturally-occurring superheated underground reservoirs providing more than 2,700 megawatts of renewable energy capacity, about six percent of the overall energy produced in the state. The Salton Sea presents a unique opportunity to extract lithium from the brine that is already being produced by geothermal power plants around the Salton Sea. According to some estimates, the Salton Sea is capable of producing 600 kilotons of lithium per year and those resources could be extracted in a more environmentally-friendly manner than in other lithium-producing countries. Brine extraction in the Salton Sea can be done without digging hard rock mines, as is done in Australia, or flooding huge evaporation ponds, as is done in the deserts of Chile. The opportunity to sell lithium from the brine as a byproduct of geothermal production could help reduce the cost of geothermal power and help make it more cost-competitive with other renewable energy resources, such as wind and solar.

CEC efforts. The CEC has a long history of promoting the development of geothermal energy resources and technologies, including funding research projects that demonstrate lithium and other mineral recovery from geothermal brine. At this critical point in time for lithium use and production, CEC staff are actively seeking to identify ways to resolve barriers to development and support opportunities for lithium recovery from geothermal brine within California. A focus is advancing California's unique opportunity to recover lithium from geothermal brine in support of California's clean energy future. The CEC has held workshops, tours, and funded projects to advance these efforts.

Purpose of this bill. AB 1657 establishes a Blue Ribbon Commission with 14 members appointed by a mix of a state agency (mostly by the CEC), Speaker of the Assembly, and Senate Committee on Rules. The membership is proposed to be composed of specified industry, economic, local government, environmental, including specified representation from local community in and around the Salton Sea. The goal of the Blue Ribbon Commission is to investigate financial and policy opportunities to bolster the opportunities to extract lithium in California. This bill requires a report to the Legislature by October 1, 2023, detailing the findings and recommendations of the Blue Ribbon Commission. In conducting the tasks the Blue Ribbon Commission shall consult with the United States Environmental Agency and the United States Department of Energy. A legislative bill may not be necessary to establish the Blue Ribbon Commission, as the Governor's Administration can establish such commissions without statutory direction. However, the author notes his desire to ensure such a commission is established and required to provide the specified assessment and recommendations as noted in this bill.

According to the Author:

The world demand for lithium is expected to grow as much as ten-fold in the next decade, but virtually none is produced in the United States; instead, almost all of the global supply today is mined in Argentina, Chile, China, and Australia. The existing Salton Sea geothermal plants are well positioned to become a competitive source of supply that could satisfy more than one-third of today's worldwide lithium demand. The opportunity for lithium production in California has the potential to unleash billions of dollars of new economic infrastructure development in Imperial, a county that is categorized as low-income and disadvantaged community. AB 1657 is therefore critical in finding ways of overcoming challenges of building a domestic supply of lithium in our state.

Arguments in Support:

A letter from the Board of Supervisors of Imperial County states: "Geothermal energy can help California meet its environmental and energy goals by producing lithium from geothermal brines. Selling lithium may also lower the cost of geothermal power, making it more competitive with other renewable sources of energy such as wind and solar. An in-state supply of lithium has the capability of creating new infrastructure development to Imperial Country, an area that chronically suffers from the highest unemployment rate and pollution levels in the state."

A letter from the Natural Resources Defense Council states: "As global demand for lithium continues to rise, California must look to harness its ample reserves in the Salton Sea in an environmentally sustainable manner. A promising new demonstration facility… will use a closed‐loop lithium recovery system to eliminate the need for evaporation ponds. If successful, the technology would bring much-needed jobs and investment to an economically distressed area, while providing an additional revenue stream to geothermal plant operators to add diversity to our clean energy portfolio and reduce reliance on fossil generators."

Arguments in Opposition:

None received.

FISCAL COMMENTS:

According to the Senate Appropriations Committee, the CEC estimates ongoing costs of about $175,000 annually (General Fund or special fund) and one position to provide staff and supervisory support to the Blue Ribbon Commission.

VOTES:

ASM WATER, PARKS, AND WILDLIFE: 14-0-0

YES: Gallagher, Bigelow, Choi, Chu, Dahle, Friedman, Cristina Garcia, Robert Rivas, Gloria, Kalra, Luz Rivas, Blanca Rubio, Salas, Wood

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ASSEMBLY FLOOR: 76-0-4

YES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, O'Donnell, Obernolte, Patterson, Petrie- Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wood, Rendon

ABS, ABST OR NV: Brough, Burke, Cooley, Wicks

SENATE FLOOR: 32-4-4

YES: Allen, Archuleta, Atkins, Beall, Bradford, Caballero, Chang, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

NO: Bates, Grove, Morrell, Nielsen

ABS, ABST OR NV: Borgeas, Jones, Melendez, Moorlach

UPDATED:

VERSION: August 25, 2020

CONSULTANT: Mary McDonald / U. & E. / (916) 319-2083 FN: 0003647

(Without Reference to File)

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 1657

Author:(Eduardo Garcia)

As Amended Ver:August 25, 2020

Majority vote

SUMMARY:

This bill requires, on or before March 1, 2021, the California Energy Commission (CEC) to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with 14 members appointed by a combination of the CEC, other state agencies, Assembly Speaker, and Senate Committee on Rules.

The Senate Amendments:

Delete the Assembly version of this bill and instead:

1. Removes all provisions from the bill relating to establishing an Office of the Salton Sea within the California Natural Resources Agency and requiring the Secretary of Natural Resources to establish a Salton Sea Oversight Committee.
2. Requires the CEC, on or before March 1, 2021, to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with 14 specified members appointed by the CEC, other state agencies, the Speaker of the Assembly, the Senate Committee on Rules, and the Governor.
3. Requires the Blue Ribbon Commission to review, investigate, and analyze certain issues and potential incentives, as described, regarding lithium extraction and use in California, and to consult, if feasible, with the United States Environmental Protection Agency and the United States Department of Energy in performing these tasks.
4. Requires the Blue Ribbon Commission to submit, on or before October 1, 2022, a report to the Legislature documenting its findings and recommendations.

COMMENTS:

Vision of California "Lithium Valley." Global demand for lithium is expected to grow as much as ten-fold over the next decade, particularly with the increasing use of lithium for batteries within multiple energy and transportation applications. Currently, virtually all of the lithium used in the United States is produced outside the country and most is mined in Argentina, Chile, China, and Australia. The only current domestic supply comes from the Silver Peak mine in Nevada. The CEC believes an increase in demand for lithium coupled with advances in processes and technologies for lithium recovery, may provide California with a unique opportunity to foster a more environmentally-sound lithium product coupled with geothermal electricity production. Increased recovery of lithium from geothermal brine is also expected to generate revenue and local in-state economic development opportunities in an economically-depressed area, and the potential to produce a world-class source of battery-grade lithium within California. Some of the most efficient battery types use lithium as a key element, and uniquely high concentrations of the dissolved soft metal are found in the brine produced by the state's geothermal hotspots. California has vast lithium deposits – potentially as much as one-third of the world's current lithium demand according to some industry estimates. Most of these deposits are located in, and around, the Salton Sea in the Imperial Valley.

Geothermal energy resources. California is home to some of the world's most abundant geothermal energy resources. The more than 40 geothermal power plants operating in the state tap into naturally-occurring superheated underground reservoirs providing more than 2,700 megawatts of renewable energy capacity, about six percent of the overall energy produced in the state. The Salton Sea presents a unique opportunity to extract lithium from the brine that is already being produced by geothermal power plants around the Salton Sea. According to some estimates, the Salton Sea is capable of producing 600 kilotons of lithium per year and those resources could be extracted in a more environmentally-friendly manner than in other lithium-producing countries. Brine extraction in the Salton Sea can be done without digging hard rock mines, as is done in Australia, or flooding huge evaporation ponds, as is done in the deserts of Chile. The opportunity to sell lithium from the brine as a byproduct of geothermal production could help reduce the cost of geothermal power and help make it more cost-competitive with other renewable energy resources, such as wind and solar.

CEC efforts. The CEC has a long history of promoting the development of geothermal energy resources and technologies, including funding research projects that demonstrate lithium and other mineral recovery from geothermal brine. At this critical point in time for lithium use and production, CEC staff are actively seeking to identify ways to resolve barriers to development and support opportunities for lithium recovery from geothermal brine within California. A focus is advancing California's unique opportunity to recover lithium from geothermal brine in support of California's clean energy future. The CEC has held workshops, tours, and funded projects to advance these efforts.

Purpose of this bill. AB 1657 establishes a Blue Ribbon Commission with 14 members appointed by a mix of a state agency (mostly by the CEC), Speaker of the Assembly, and Senate Committee on Rules. The membership is proposed to be composed of specified industry, economic, local government, environmental, including specified representation from local community in and around the Salton Sea. The goal of the Blue Ribbon Commission is to investigate financial and policy opportunities to bolster the opportunities to extract lithium in California. This bill requires a report to the Legislature by October 1, 2023, detailing the findings and recommendations of the Blue Ribbon Commission. In conducting the tasks the Blue Ribbon Commission shall consult with the United States Environmental Agency and the United States Department of Energy. A legislative bill may not be necessary to establish the Blue Ribbon Commission, as the Governor's Administration can establish such commissions without statutory direction. However, the author notes his desire to ensure such a commission is established and required to provide the specified assessment and recommendations as noted in this bill.

According to the Author:

The world demand for lithium is expected to grow as much as ten-fold in the next decade, but virtually none is produced in the United States; instead, almost all of the global supply today is mined in Argentina, Chile, China, and Australia. The existing Salton Sea geothermal plants are well positioned to become a competitive source of supply that could satisfy more than one-third of today's worldwide lithium demand. The opportunity for lithium production in California has the potential to unleash billions of dollars of new economic infrastructure development in Imperial, a county that is categorized as low-income and disadvantaged community. AB 1657 is therefore critical in finding ways of overcoming challenges of building a domestic supply of lithium in our state.

Arguments in Support:

A letter from the Board of Supervisors of Imperial County states: "Geothermal energy can help California meet its environmental and energy goals by producing lithium from geothermal brines. Selling lithium may also lower the cost of geothermal power, making it more competitive with other renewable sources of energy such as wind and solar. An in-state supply of lithium has the capability of creating new infrastructure development to Imperial Country, an area that chronically suffers from the highest unemployment rate and pollution levels in the state."

A letter from the Natural Resources Defense Council states: "As global demand for lithium continues to rise, California must look to harness its ample reserves in the Salton Sea in an environmentally sustainable manner. A promising new demonstration facility… will use a closed‐loop lithium recovery system to eliminate the need for evaporation ponds. If successful, the technology would bring much-needed jobs and investment to an economically distressed area, while providing an additional revenue stream to geothermal plant operators to add diversity to our clean energy portfolio and reduce reliance on fossil generators."

Arguments in Opposition:

None received.

FISCAL COMMENTS:

According to the Senate Appropriations Committee, the CEC estimates ongoing costs of about $175,000 annually (General Fund or special fund) and one position to provide staff and supervisory support to the Blue Ribbon Commission.

VOTES:

ASM WATER, PARKS, AND WILDLIFE: Vote Not Relevant

YES:

ASM APPROPRIATIONS: Vote Not Relevant

YES:

ASSEMBLY FLOOR: Vote Not Relevant

YES:

ABS, ABST OR NV:

SENATE FLOOR: 32-4-4

YES: Allen, Archuleta, Atkins, Beall, Bradford, Caballero, Chang, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

NO: Bates, Grove, Morrell, Nielsen

ABS, ABST OR NV: Borgeas, Jones, Melendez, Moorlach

ASM UTILITIES AND ENERGY: 13-0-2

YES: Holden, Patterson, Burke, Carrillo, Chen, Cristina Garcia, Eduardo Garcia, Mayes, Muratsuchi, Quirk, Reyes, Santiago, Ting

ABS, ABST OR NV: Cunningham, Eggman

UPDATED:

VERSION: August 25, 2020

CONSULTANT: Mary McDonald / U. & E. / (916) 319-2083 FN: 0003688

 THIRD READING  

Bill No: AB 1657

Author: Eduardo Garcia (D)

Amended: 8/25/20 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 11-0, 8/3/20

AYES: Hueso, Bradford, Chang, Dodd, Hertzberg, Hill, McGuire, Rubio, Skinner, Stern, Wiener

NO VOTE RECORDED: Moorlach, Dahle

SENATE APPROPRIATIONS COMMITTEE: 5-1, 8/20/20

AYES: Portantino, Bradford, Hill, Leyva, Wieckowski

NOES: Bates

NO VOTE RECORDED: Jones

ASSEMBLY FLOOR: Not relevant

SUBJECT: State Energy Resources Conservation and Development Commission: Blue Ribbon Commission on Lithium Extraction in California: report

SOURCE: Author

DIGEST:

This bill requires, on or before March 1, 2021, the California Energy Commission (CEC) to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with 14 members appointed by a combination of the California Energy Commission (CEC), other state agencies, Assembly Speaker, and Senate Committee on Rules.

Senate Floor Amendments of 8/25/20 add four additional members to the proposed Blue Ribbon Commission and make substantive, but largely, clarifying amendments as to the Blue Ribbon Commission’s operations.

ANALYSIS:

Existing law:

1. Establishes in the Resources Agency the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission), consisting of five members appointed by the governor, as specified. (Public Resources Code §25200 et seq.)
2. Requires the CEC to undertake a continuing assessment of trends in the consumption of electrical energy and other forms of energy and to analyze the social, economic, and environmental consequences of these trends, and to carry out, or cause to be carried out, under contract or other arrangements, research and development into alternative sources of energy, improvements in energy generation, transmission, and siting, fuel substitution, and other topics related to energy supply, demand, public safety, ecology, and conservation that are of particular statewide importance. (Public Resources Code §25216.)

This bill:

1. Requires on or before March 1, 2021, the CEC to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with specified members appointed as prescribed.
2. Requires the Blue Ribbon Commission on Lithium Extraction in California to review, investigate, and analyze certain issues and potential incentives, as described, regarding lithium extraction and use in California, and to consult, if feasible, with the United States Environmental Protection Agency and the United States Department of Energy in performing these tasks.
3. Requires the Blue Ribbon Commission on Lithium Extraction in California to submit, on or before October 1, 2022, a report to the Legislature documenting its findings and recommendations, after analyzing the specified information.

Background

Vision of California “Lithium Valley.” Global demand for lithium is expected to grow as much as ten-fold over the next decade, particularly with the increasing use of lithium for batteries within multiple energy and transportation applications. Currently, virtually all of the lithium used in the United States is produced outside the country and most is mined in Argentina, Chile, China, and Australia. The only current domestic supply comes from the Silver Peak mine in Nevada. The CEC believes an increase in demand for lithium coupled with advances in processes and technologies for lithium recovery, may provide California with a unique opportunity to foster a more environmentally-sound lithium product coupled with geothermal electricity production. Increased recovery of lithium from geothermal brine is also expected to generate revenue and local in-state economic development opportunities in an economically-depressed area, and the potential to produce a world-class source of battery-grade lithium within California. Some of the most efficient battery types use lithium as a key element, and uniquely high concentrations of the dissolved soft metal are found in the brine produced by the state’s geothermal hotspots. California has vast lithium deposits – potentially as much as one third of the world’s current lithium demand according to some industry estimates. Most of these deposits are located in, and around, the Salton Sea in the Imperial Valley.

Geothermal energy resources. California is home to some of the world’s most abundant geothermal energy resources. The more than 40 geothermal power plants operating in the state tap into naturally-occurring superheated underground reservoirs providing more than 2,700 megawatts of renewable energy capacity, about six percent of the overall energy produced in the state. The Salton Sea presents a unique opportunity to extract lithium from the brine that is already being produced by geothermal power plants around the Salton Sea. According to some estimates, the Salton Sea is capable of producing 600 kilotons of lithium per year and those resources could be extracted in a more environmentally-friendly manner than in other lithium-producing countries. Brine extraction in the Salton Sea can be done without digging hard rock mines, as is done in Australia, or flooding huge evaporation ponds, as is done in the deserts of Chile. The opportunity to sell lithium from the brine as a byproduct of geothermal production could help reduce the cost of geothermal power and help make it more cost-competitive with other renewable energy resources, such as wind and solar.

CEC efforts. The CEC has a long history of promoting the development of geothermal energy resources and technologies, including funding research projects that demonstrate lithium and other mineral recovery from geothermal brine. At this critical point in time for lithium use and production, CEC staff are actively seeking to identify ways to resolve barriers to development and support opportunities for lithium recovery from geothermal brine within California. A focus is advancing California’s unique opportunity to recover lithium from geothermal brine in support of California’s clean energy future. The CEC has held workshops, tours, and funded projects to advance these efforts.

Purpose of this bill. AB 1657 establishes a Blue Ribbon Commission with 14 members appointed by a mix of state agency (mostly by the CEC), Speaker of the Assembly, and Senate Committee on Rules. The membership is proposed to be composed of specified industry, economic, local government, environmental, including specified representation from local community in and around the Salton Sea. The goal of the Blue Ribbon Commission is to investigate financial and policy opportunities to bolster the opportunities to extract lithium in California. This bill requires a report to the Legislature by October 1, 2022 detailing the findings and recommendations of the Blue Ribbon Commission. A legislative bill may not be necessary to establish the Blue Ribbon Commission, as the Governor’s Administration can establish such commissions without statutory direction. However, the author notes his desire to ensure such a commission is established and required to provide the specified assessment and recommendations as noted in this bill.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, the CEC estimates ongoing costs of about $175,000 annually (General Fund or special fund) and one position to provide staff and supervisory support to the Blue Ribbon Commission.

SUPPORT: (Verified 8/27/20)

Alliance for Automotive Innovation

Berkshire Hathaway Energy

California Municipal Utilities Association

City of Brawley

City of Calexico

City of Coachella

Controlled Thermal Resources

EnergySource Minerals LLC

Geothermal Resources Council

Imperial County Board of Supervisors

Imperial Irrigation District

Imperial Valley Economic Development Corporation

Natural Resources Defense Council

Natural Resources Defense Council Action Fund

Salton Sea Authority

Southwest Protective Services, Inc.

The Dahm Team Real Estate Company

V. Manual Perez, 4th District Supervisor, Riverside County

OPPOSITION: (Verified 8/27/20)

None received

ARGUMENTS IN SUPPORT: According to the author:

The world demand for lithium is expected to grow as much as ten-fold in the next decade, but virtually none is produced in the United States; instead, almost all of the global supply today is mined in Argentina, Chile, China and Australia.  The existing Salton Sea geothermal plants are well positioned to become a competitive source of supply that could satisfy more than one-third of today’s worldwide lithium demand. The opportunity for lithium production in California has the potential to unleash billions of dollars of new economic infrastructure development in Imperial, a county that is categorized as low-income and disadvantaged community. AB 1657 is therefore critical in finding ways of overcoming challenges of building a domestic supply of lithium in our state.

Prepared by: Nidia Bautista / E., U., & C. / (916) 651-4107

8/27/20 13:26:18

**** END ****

 THIRD READING  

Bill No: AB 1657

Author: Eduardo Garcia (D)

Amended: 7/27/20 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 11-0, 8/3/20

AYES: Hueso, Bradford, Chang, Dodd, Hertzberg, Hill, McGuire, Rubio, Skinner, Stern, Wiener

NO VOTE RECORDED: Moorlach, Dahle

SENATE APPROPRIATIONS COMMITTEE: 5-1, 8/20/20

AYES: Portantino, Bradford, Hill, Leyva, Wieckowski

NOES: Bates

NO VOTE RECORDED: Jones

ASSEMBLY FLOOR: Not relevant

SUBJECT: State Energy Resources Conservation and Development Commission: Blue Ribbon Commission on Lithium Extraction in California: report

SOURCE: Author

DIGEST:

This bill requires, on or before March 1, 2021, the California Energy Commission (CEC) to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with 10 members appointed by a combination of the Governor, agencies, Assembly Speaker, and Senate Committee on Rules.

ANALYSIS:

Existing law:

1. Establishes in the Resources Agency the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission), consisting of five members appointed by the governor, as specified. (Public Resources Code §25200 et seq.)
2. Requires the CEC to undertake a continuing assessment of trends in the consumption of electrical energy and other forms of energy and to analyze the social, economic, and environmental consequences of these trends, and to carry out, or cause to be carried out, under contract or other arrangements, research and development into alternative sources of energy, improvements in energy generation, transmission, and siting, fuel substitution, and other topics related to energy supply, demand, public safety, ecology, and conservation that are of particular statewide importance. (Public Resources Code §25216.)

This bill:

1. Requires on or before March 1, 2021, the CEC to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with specified members appointed as prescribed.
2. Requires the Blue Ribbon Commission on Lithium Extraction in California to review, investigate, and analyze certain issues and potential incentives, as described, regarding lithium extraction and use in California, and to consult, if feasible, with the United States Environmental Protection Agency in performing these tasks.
3. Requires the Blue Ribbon Commission on Lithium Extraction in California to submit, on or before October 1, 2022, a report to the Legislature discussing and documenting its findings, recommendations, and action plans.

Background

Vision of California “Lithium Valley.” Global demand for lithium is expected to grow as much as ten-fold over the next decade, particularly with the increasing use of lithium for batteries within multiple energy and transportation applications. Currently, virtually all of the lithium used in the United States is produced outside the country and most is mined in Argentina, Chile, China, and Australia. The only current domestic supply comes from the Silver Peak mine in Nevada. The CEC believes an increase in demand for lithium coupled with advances in processes and technologies for lithium recovery, may provide California with a unique opportunity to foster a more environmentally-sound lithium product coupled with geothermal electricity production. Increased recovery of lithium from geothermal brine is also expected to generate revenue and local in-state economic development opportunities in an economically-depressed area, and the potential to produce a world-class source of battery-grade lithium within California. Some of the most efficient battery types use lithium as a key element, and uniquely high concentrations of the dissolved soft metal are found in the brine produced by the state’s geothermal hotspots. California has vast lithium deposits – potentially as much as one third of the world’s current lithium demand according to some industry estimates. Most of these deposits are located in, and around, the Salton Sea in the Imperial Valley.

Geothermal energy resources. California is home to some of the world’s most abundant geothermal energy resources. The more than 40 geothermal power plants operating in the state tap into naturally-occurring superheated underground reservoirs providing more than 2,700 megawatts of renewable energy capacity, about six percent of the overall energy produced in the state. The Salton Sea presents a unique opportunity to extract lithium from the brine that is already being produced by geothermal power plants around the Salton Sea. According to some estimates, the Salton Sea is capable of producing 600 kilotons of lithium per year and those resources could be extracted in a more environmentally-friendly manner than in other lithium-producing countries. Brine extraction in the Salton Sea can be done without digging hard rock mines, as is done in Australia, or flooding huge evaporation ponds, as is done in the deserts of Chile. The opportunity to sell lithium from the brine as a byproduct of geothermal production could help reduce the cost of geothermal power and help make it more cost-competitive with other renewable energy resources, such as wind and solar.

CEC efforts. The CEC has a long history of promoting the development of geothermal energy resources and technologies, including funding research projects that demonstrate lithium and other mineral recovery from geothermal brine. At this critical point in time for lithium use and production, CEC staff are actively seeking to identify ways to resolve barriers to development and support opportunities for lithium recovery from geothermal brine within California. A focus is advancing California’s unique opportunity to recover lithium from geothermal brine in support of California’s clean energy future. The CEC has held workshops, tours, and funded projects to advance these efforts.

Purpose of this bill. AB 1657 establishes a Blue Ribbon Commission with 10 members composed of a mix of state agency, legislative, and governmental appointments with some specified industry and environmental representation. The goal of the Blue Ribbon Commission is to investigate financial and policy opportunities to bolster the opportunities to extract lithium and support geothermal development. This bill requires a report to the Legislature by October 1, 2022 detailing the findings, recommendations and action plans of the Blue Ribbon Commission. A legislative bill may not be necessary to establish the Blue Ribbon Commission, as the Governor’s Administration can establish such commissions without statutory direction. However, the author notes his desire to ensure such a commission is established and required to provide the specified assessment and recommendations as noted in this bill.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, the CEC estimates ongoing costs of about $175,000 annually (General Fund or special fund) and one position to provide staff and supervisory support to the Blue Ribbon Commission.

SUPPORT: (Verified 8/20/20)

Alliance for Automotive Innovation

Berkshire Hathaway Energy

California Municipal Utilities Association

City of Brawley

City of Calexico

City of Coachella

Controlled Thermal Resources

EnergySource Minerals LLC

Geothermal Resources Council

Imperial Irrigation District

Imperial Valley Economic Development Corporation

Salton Sea Authority

Southwest Protective Services, Inc.

The Dahm Team Real Estate Company

V. Manual Perez, 4th District Supervisor, Riverside County

OPPOSITION: (Verified 8/20/20)

None received

ARGUMENTS IN SUPPORT: According to the author:

The world demand for lithium is expected to grow as much as ten-fold in the next decade, but virtually none is produced in the United States; instead, almost all of the global supply today is mined in Argentina, Chile, China and Australia.  The existing Salton Sea geothermal plants are well positioned to become a competitive source of supply that could satisfy more than one-third of today’s worldwide lithium demand. The opportunity for lithium production in California has the potential to unleash billions of dollars of new economic infrastructure development in Imperial, a county that is categorized as low-income and disadvantaged community. AB 1657 is therefore critical in finding ways of overcoming challenges of building a domestic supply of lithium in our state.

Prepared by: Nidia Bautista / E., U., & C. / (916) 651-4107

8/21/20 17:35:33

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1657 (Eduardo Garcia) - State Energy Resources Conservation and Development Commission: Blue Ribbon Commission on Lithium Extraction in California: report

Bill Summary:

This bill would require, on or before March 1, 2021, the California Energy Commission (CEC) to establish and convene the Blue Ribbon Commission on Lithium Extraction in California.

Fiscal Impact:

• The CEC estimates ongoing costs of about $175,000 annually (General Fund or special fund) and one position to provide staff and supervisory support to the Blue Ribbon Commission.

Background:

Lithium in California. Global demand for lithium is expected to grow as much as ten-fold over the next decade, particularly with the increasing use of lithium in batteries in multiple energy and transportation applications. Currently, virtually all of the lithium used in the United States is produced outside the country and most is mined in Argentina, Chile, China, and Australia. The only current domestic supply comes from the Silver Peak mine in Nevada. The CEC believes an increase in demand for lithium coupled with advances in processes and technologies for lithium recovery, may provide California with a unique opportunity to foster a more environmentally-sound lithium product coupled with geothermal electricity production. Increased recovery of lithium from geothermal brine is also expected to generate revenue and local in-state economic development opportunities in an economically-depressed area, and the potential to produce a world-class source of battery-grade lithium within California. Some of the most efficient battery types use lithium as a key element, and uniquely high concentrations of the dissolved soft metal are found in the brine produced by the state’s geothermal hotspots. California has vast lithium deposits – potentially as much as one third of the world’s current lithium demand according to some industry estimates. Most of these deposits are located in, and around, the Salton Sea in the Imperial Valley.

Existing CEC efforts. The CEC has a long history of promoting the development of geothermal energy resources and technologies, including funding research projects that demonstrate lithium and other mineral recovery from geothermal brine. At this critical point in time for lithium use and production, CEC staff are actively seeking to identify ways to resolve barriers to development and support opportunities for lithium recovery from geothermal brine within California. A focus is advancing California’s unique opportunity to recover lithium from geothermal brine in support of California’s clean energy future. The CEC has held workshops, tours, and funded projects to advance these efforts.

Proposed Law:

This bill would require, on or before March 1, 2021, the CEC to establish and convene the Blue Ribbon Commission on Lithium Extraction in California. Specifically, this bill would:

1. Require on or before March 1, 2021, the CEC to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with specified members appointed as prescribed.
2. Require the Blue Ribbon Commission on Lithium Extraction in California to review, investigate, and analyze certain issues and potential incentives, as described, regarding lithium extraction and use in California, and to consult, if feasible, with the United States Environmental Protection Agency in performing these tasks.
3. Require the Blue Ribbon Commission on Lithium Extraction in California to submit, on or before October 1, 2022, a report to the Legislature discussing and documenting its findings, recommendations, and action plans.

Staff Comments:

It is reasonable to assume that CEC staff would support the activities of the Blue Ribbon Commission. As written, it is unclear whether the prescribed membership would have responsibility for the research, analysis and drafting of the report; however, based on the description of the membership and prior similar activities, it is reasonable to assume CEC staff resources will be needed to conduct activities as directed by the Blue Ribbon Commission.

Staff assumes CEC staff would conduct activities supporting the establishment of the Blue Ribbon Commission including research, analysis, writing and editing of the report, and coordination of associated activities. The fiscal impact also includes administrative and travel expenses. No reimbursement of time or costs for Blue Ribbon Commission members has been included in this analysis.

Staff notes that the Energy Resources Programs Account—the main funding source that supports CEC staff costs—currently has a significant structural deficit.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Ben Hueso, Chair

2019 - 2020 Regular

Bill No: Hearing Date: 8/3/2020

SUBJECT:

DIGEST: This bill would require, on or before March 1, 2021, the California Energy Commission (CEC) to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with specified members appointed as prescribed.

ANALYSIS:

Existing law:

1. Establishes in the Resources Agency the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission), consisting of five members appointed by the governor, as specified. (Public Resources Code §25200 et seq.)
2. Requires the CEC to undertake a continuing assessment of trends in the consumption of electrical energy and other forms of energy and to analyze the social, economic, and environmental consequences of these trends, and to carry out, or cause to be carried out, under contract or other arrangements, research and development into alternative sources of energy, improvements in energy generation, transmission, and siting, fuel substitution, and other topics related to energy supply, demand, public safety, ecology, and conservation that are of particular statewide importance. (Public Resources Code §25216.)

This bill:

1. Requires on or before March 1, 2021, the CEC to establish and convene the Blue Ribbon Commission on Lithium Extraction in California, with specified members appointed as prescribed.
2. Requires the Blue Ribbon Commission on Lithium Extraction in California to review, investigate, and analyze certain issues and potential incentives, as described, regarding lithium extraction and use in California, and to consult, if feasible, with the United States Environmental Protection Agency in performing these tasks.
3. Requires the Blue Ribbon Commission on Lithium Extraction in California to submit, on or before October 1, 2022, a report to the Legislature discussing and documenting its findings, recommendations, and action plans.

Background

Vision of California “Lithium Valley.” Global demand for lithium is expected to grow as much as ten-fold over the next decade, particularly with the increasing use of lithium in batteries in multiple energy and transportation applications. Currently, virtually all of the lithium used in the United States is produced outside the country and most is mined in Argentina, Chile, China, and Australia. The only current domestic supply comes from the Silver Peak mine in Nevada. The CEC believes an increase in demand for lithium coupled with advances in processes and technologies for lithium recovery, may provide California with a unique opportunity to foster a more environmentally-sound lithium product coupled with geothermal electricity production. Increased recovery of lithium from geothermal brine is also expected to generate revenue and local in-state economic development opportunities in an economically-depressed area, and the potential to produce a world-class source of battery-grade lithium within California. Some of the most efficient battery types use lithium as a key element, and uniquely high concentrations of the dissolved soft metal are found in the brine produced by the state’s geothermal hotspots. California has vast lithium deposits – potentially as much as one third of the world’s current lithium demand according to some industry estimates. Most of these deposits are located in, and around, the Salton Sea in the Imperial Valley.

Geothermal energy resources. California is home to some of the world’s most abundant geothermal energy resources. The more than 40 geothermal power plants operating in the state tap into naturally-occurring superheated underground reservoirs providing more than 2,700 megawatts of renewable energy capacity, about six percent of the overall energy produced in the state. The Salton Sea presents a unique opportunity to extract lithium from the brine that is already being produced by geothermal power plants around the Salton Sea. According to some estimates, the Salton Sea is capable of producing 600 kilotons of lithium per year and those resources could be extracted in a more environmentally-friendly manner than in other lithium-producing countries. Brine extraction in the Salton Sea can be done without digging hard rock mines, as is done in Australia, or flooding huge evaporation ponds, as is done in the deserts of Chile. The opportunity to sell lithium from the brine as a byproduct of geothermal production could help reduce the cost of geothermal power and help make it more cost-competitive with other renewable energy resources, such as wind and solar.

CEC efforts. The CEC has a long history of promoting the development of geothermal energy resources and technologies, including funding research projects that demonstrate lithium and other mineral recovery from geothermal brine. At this critical point in time for lithium use and production, CEC staff are actively seeking to identify ways to resolve barriers to development and support opportunities for lithium recovery from geothermal brine within California. A focus is advancing California’s unique opportunity to recover lithium from geothermal brine in support of California’s clean energy future. The CEC has held workshops, tours, and funded projects to advance these efforts.

AB 1657. AB 1657 would establish a Blue Ribbon Commission with ten members composed of a mix of state agency, legislative, and governmental appointments with some specified industry and environmental representation. The goal of the Blue Ribbon Commission is to investigate financial and policy opportunities to bolster the opportunities to extract lithium and support geothermal development. This bill would require a report to the Legislature by October 1, 2022 detailing the findings, recommendations and action plans of the Blue Ribbon Commission. A legislative bill may not be necessary to establish the Blue Ribbon Commission, as the Governor’s Administration can establish such commissions without statutory direction. However, the author notes his desire to ensure such a commission is established and required to provide the specified assessment and recommendations as noted in this bill.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

None received

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the author:

The world demand for lithium is expected to grow as much as ten-fold in the next decade, but virtually none is produced in the United States; instead, almost all of the global supply today is mined in Argentina, Chile, China and Australia.  The existing Salton Sea geothermal plants are well positioned to become a competitive source of supply that could satisfy more than one-third of today’s worldwide lithium demand. The opportunity for lithium production in California has the potential to unleash billions of dollars of new economic infrastructure development in Imperial, a county that is categorized as low-income and disadvantaged community. AB 1657 is therefore critical in finding ways of overcoming challenges of building a domestic supply of lithium in our state.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1657

Author:(Eduardo Garcia)

As Introduced Ver:February 22, 2019

Majority vote

SUMMARY:

This bill establishes an Office of the Salton Sea within the California Natural Resources Agency (CNRA), and requires the Secretary of Natural Resources to establish a Salton Sea Oversight Committee.

Major Provisions

This bill establishes an Office of the Salton Sea within the CNRA, with staff to include, but not limited to, persons with expertise in project management, engineering, scientific and legal issues, and community engagement. This bill also requires the Secretary of Natural Resources to establish a Salton Sea Oversight Committee subject to the Bagley-Keene Open Meeting Act.

COMMENTS:

The Salton Sea. The Salton Sea is California's largest lake and was once famous for its sport fishing and other recreational uses. It is located in southern Riverside and northern Imperial Counties in southeastern California. Since its modern creation in 1905 as a result of flood flows from the Colorado River, approximately 90% of the freshwater inflow to the Salton Sea has been agricultural runoff water from the Imperial Valley, preventing the sea from drying up as had occurred in the past. As the Salton Sea has no outlets, salts and nutrients concentrate in it, and the Salton Sea has a salinity level that is approximately 60% higher than the ocean.

Impacts of a Shrinking Sea. Since a 2003 water agreement, the amount of water flowing into the sea has been reduced, which is further increasing salinity and causing the sea's shoreline to recede. As the sea shrinks, an increasing amount of dry, dusty lakebed is exposed. Since 2003, the area of the Salton Sea has been reduced by 24,200 acres, with 2,260 acres of lakebed newly exposed in 2018. The lakebed dust contains toxic elements such as arsenic and selenium, some of which were transported to the sea by agricultural runoff. Due to the high winds and arid climate around the sea, this fine dust becomes airborne, increasing the amount of particulate matter in the air in the Imperial and Coachella Valleys and causing health problems for residents.

Additionally, the shrinking sea is impairing wildlife habitats. As wetland habitat has been lost to development throughout California and northern Mexico, hundreds of thousands of birds along the Pacific Flyway have come to rely on the sea for food, rest, and nesting. Protecting against extreme salinity in the sea is important for the survival of the fish that provide food for these birds. The lake and its surroundings also provide habitat for some fish and bird species.

State Obligation. The state agreed to assume most of the financial responsibility for mitigating negative environmental impacts and for the Salton Sea restoration effort. Legislation enacted in 2003 outlines the financial responsibility assumed by the state, consistent with the 2003 water agreement, and also establishes a number of broad goals for the restoration effort. On March 16, 2017, the CNRA released its draft Phase I 10-year plan for Salton Sea management. Updated in August 2018, Phase I has an estimated cost of approximately $400 million and is intended to guide investments at the Salton Sea to protect public health and ecosystem values as the sea recedes. The plan calls for the construction of 29,800 acres of ponds, wetlands, and dust-suppression projects on portions of exposed lakebed. The plan outlines annual targets for completion, beginning with 500 acres in 2018 and increasing to 4,200 acres in 2028. The state did not meet the acreage target for 2018. To date, the state has allocated nearly $310 million for projects at the Salton Sea. The majority of the allocated funding has not been spent. In addition, the state has not identified funding for the ongoing operations and maintenance of the projects that will be built under the 10-year plan.

Staffing Levels. To date, most state employees working on Salton Sea issues have been temporarily assigned or have worked on Salton Sea issues as a fraction of their full job duties. The state has said that it is increasing staffing and accountability to implement projects at the sea. The Department of Water Resources (DWR) has committed to hiring additional staff, with thirteen full time equivalent staff identified in the 2018-19 budget.

According to the Author:

In 2017, the state released a ten-year, $420 million plan to guide state investments at the Salton Sea and address negative public health and environmental impacts over the next ten years. Half of the projects will provide habitat and dust suppression benefits, while the remaining projects are primarily to control dust emissions. The issue is that inadequate staffing levels have resulted in a small number of state staff handling all aspects of Salton Sea projects. The implementation of the ten-year plan is already running behind, with the state anticipating missing its 2019 targets. AB 1657 will ensure there is dedicated staffing and essential oversight for planned and future projects at the Salton Sea.

Arguments in Support:

Those in support argue that the state must do more to protect and improve its public trust resources, especially those associated with the Pacific Flyway. The creation of the Office of the Salton Sea within the CNRA should provide a platform for more significant engagement and improvement of the Salton Sea area, hopefully with better outcomes for people and the environment.

Arguments in Opposition:

None on file

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, there are potential staff costs to the DWR of between $750,000 and $1 million annually or more (General Fund). Costs to the CNRA for staffing the oversight committee are estimated at $500,000 per year (General Fund).

VOTES:

ASM WATER, PARKS, AND WILDLIFE: 14-0-0

YES: Gallagher, Bigelow, Choi, Chu, Dahle, Friedman, Cristina Garcia, Robert Rivas, Gloria, Kalra, Luz Rivas, Blanca Rubio, Salas, Wood

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

UPDATED:

VERSION: February 22, 2019

CONSULTANT: Keith Cialino / W., P., & W. / (916) 319-2096 FN: 0000506

Date of Hearing: May 1, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1657

Author:(Eduardo Garcia) – As Introduced Ver:February 22, 2019

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

SUMMARY:

This bill establishes the Office of the Salton Sea within the California Natural Resources Agency (CNRA) and requires the Secretary of Natural Resources to establish a Salton Sea Oversight Committee.

Specifically, this bill:

1. Requires staff for the office to include project management, engineering, scientific, legal and community engagement staff.
2. Requires the Secretary of Natural Resources to establish a Salton Sea Oversight Committee.
3. Requires the CNRA or one or more of its departments, or both, to provide staff support for the activities of the Salton Sea Oversight Committee, including, but not limited to, support for the organization of meetings and preparing of reports.
4. Subjects the Salton Sea Oversight Committee to the Bagley-Keene Open Meeting Act.

FISCAL EFFECT:

1. It is unknown whether the existing Department of Water Resources (DWR) personnel currently working on the Salton Sea would be used to staff the Office of the Salton Sea. If not, the requirement to have engineering, scientific, legal and community staff could easily cost between $750,000 and $1 million annually or more (General Fund).
2. CNRA costs are hard to quantify because the legislation does not specify the duties of the oversight committee. If the committee is required to meet regularly and perform many tasks, it would require several staff members and associated operations, equipment and travel. With that in mind, CNRA estimates an annual cost of $500,000 (General Fund) but does not believe this number is firm.

COMMENTS:

1. Purpose. In August 2018, CNRA updated its draft phase I 10-year plan for Salton Sea management. The plan has an estimated cost of $400 million and is intended to guide investments to protect health and ecosystem values as the sea recedes. The plan calls for 29,800 acres of ponds, wetlands and dust-suppression projects on exposed lakebed.

In November 2017, the State Water Resources Control Board (State Water Board) issued an order to identify steps to be taken if the state fails to meet the targets in the 10-year plan and committed the state to a long-term plan beyond the first 10 years. CNRA confirmed the 2018 target of building 500 acres of habitat and dust suppression has not been met.

CNRA has dedicated the Department of Water Resources (DWR) as the lead agency for the implementation of the management plan, and 13 full time staff were identified in DWR’s 2018-19 budget. This bill establishes an oversight committee with the intention of minimizing delays and controlling costs.

According to the author, “AB 1657 will ensure there is dedicated staffing and essential oversight for planned and future projects at the Salton Sea.”

1. Background. The Salton Sea, California's largest lake, was formed in 1905 when the Colorado River flooded its banks at a faulty irrigation diversion site. Restoration is necessary to protect fish and wildlife habitat, preserve endangered species and remediate the salinity caused by agricultural runoff. Restoring the sea will help prevent future significant air quality problems resulting from the shrinking sea.

The Salton Sea is one of the most important wetland areas for shorebirds migrating along the Pacific Flyway.

1. The Quantification Settlement Agreement (QSA). The QSA was a negotiated settlement among the Imperial Irrigation District, The Metropolitan District of Southern California, the Coachella Water District, the San Diego Water Authority and the state to settle claims to Colorado River water and provided a path for the state to reduce its consumption of Colorado River water to its 4.4 million acre foot entitlement. The state is financially responsible for most of the environmental mitigation and restoration of the sea.

In 2003, the Legislature enacted a package of QSA implementing bills including a requirement to restore the Salton Sea. Under the QSA, the amount of water flowing into the Sea will be significantly reduced in 2017. Without restoration efforts, the environmental consequences of the reduced flows will be significant to fish, wildlife, habitat and air quality.

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

Date of Hearing: April 9, 2019

ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE

Eduardo Garcia, Chair

ABPCA Bill Id:AB 1657 (

Author:Eduardo Garcia) – As Introduced Ver:February 22, 2019

SUBJECT: Salton Sea: Office of the Salton Sea: Salton Sea Oversight Committee

SUMMARY: Establishes an Office of the Salton Sea within the California Natural Resources Agency (CNRA), and requires the Secretary of Natural Resources to establish a Salton Sea Oversight Committee. Specifically, this bill:

1. Establishes an Office of the Salton Sea within the CNRA, with staff to include, but not limited to, persons with expertise in project management, engineering, scientific and legal issues, and community engagement.
2. Requires the Secretary of Natural Resources to establish a Salton Sea Oversight Committee.
   1. Requires the CNRA or one or more of its departments, or both, to provide staff support for the activities of the Salton Sea Oversight Committee, including, but not limited to, support for the organization of meetings and preparing of reports.
   2. Stipulates that the Salton Sea Oversight Committee is subject to the Bagley-Keene Open Meeting Act [Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code].

EXISTING LAW:

1. Provides, since 2003, in the Quantification Settlement Agreement (QSA) and related state laws, for water transfers among southern California agricultural and water agencies, and for restoration of the Salton Sea. Establishes that the QSA is a collection of agreements between the Imperial Irrigation District (IID), Metropolitan Water District of Southern California, San Diego County Water Authority (SDCWA), the Coachella Valley Water District (CVWD), and the state, that included approval of water transfers from IID to San Diego, settled a number of claims to the Colorado River, and provided a transition period for the state to reduce its consumption of Colorado River water to its 4.4 million acre-feet entitlement. Under the QSA, the amount of water flowing into the Salton Sea was significantly reduced after 2017.
2. Establishes the Salton Sea Restoration Act (SSRA) with the legislative intent of providing that the state, in consultation and coordination with the Salton Sea Authority (SSA), undertakes restoration of the Salton Sea ecosystem and the permanent protection of the wildlife dependent on that ecosystem. Requires the SSRA to provide the maximum feasible attainment of specified environmental objectives, including restoration of long-term stable aquatic and shoreline habitat to historic levels and diversity of fish and wildlife dependent on the Salton Sea, elimination of air quality impacts from restoration projects, and protection of water quality. [Fish and Game Code (FGC) §2930-2945]
3. Establishes the Salton Sea Restoration Fund (SSRF), which is administered by the Director of the DFW. Authorizes moneys deposited in the SSRF to be expended, upon appropriation by the Legislature. (FGC §2932)
4. Authorizes $5.4 billion in general obligation funding for water and flood control projects in Proposition 84, the Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006, with $47 million available for the SSRF. [Public Resources Code (PRC) §75001-75130]
5. Authorizes $7.545 billion in general obligation funding for water-related projects and programs in Proposition 1, the Water Quality, Supply, and Infrastructure Improvement Act of 2014, with $80.5 million available for the Salton Sea Management Plan (SSMP). (Water Code §79700-79798)
6. Authorizes $4 billion in general obligation funding for projects and programs in Proposition 68, the California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For All Act of 2018. $200 million from Proposition 68 is intended for the Salton Sea. (PRC §80110(a), 80116)
7. Creates, in 2015 by the Administration, the Salton Sea Task Force, and directs agencies to develop a comprehensive management plan for the sea to meet a short-term goal of 9,000-12,000 acres of habitat and dust suppression projects. Governor Brown also set a medium-term plan to construct 18,000-25,000 acres of habitat and dust suppression projects.
8. Through State Water Resources Control Board (SWRCB) Order WR 2017-0134, establishes milestones for the completion of habitat and dust suppression projects at the Salton Sea; requires no less than 50 percent of the projects, by acreage, to provide habitat benefits for fish and wildlife that depend on the Salton Sea ecosystem; requires the CNRA to develop subsequent 10-year phases of the SSMP and stipulates that the SWRCB will hold a public meeting by March 31 to hear a progress report on the previous year, including updates on completed projects, amount of acreage completed, and project finances.

FISCAL EFFECT: Unknown. This bill is keyed fiscal.

COMMENTS: This bill establishes an Office of the Salton Sea, and requires the Secretary of Natural Resources to establish a Salton Sea Oversight Committee.

Author’s Statement:

In 2017, the state released a ten-year, $420 million plan to guide state investments at the Salton Sea and address negative public health and environmental impacts over the next ten years. Half of the projects will provide habitat and dust suppression benefits, while the remaining projects are primarily to control dust emissions. The issue is that inadequate staffing levels have resulted in a small number of state staff handling all aspects of Salton Sea projects. The implementation of the ten-year plan is already running behind, with the state anticipating missing its 2019 targets. AB 1657 will ensure there is dedicated staffing and essential oversight for planned and future projects at the Salton Sea.

Background: The Salton Sea. The Salton Sea is California's largest lake and was once famous for its sport fishing and other recreational uses. It is located in southern Riverside and northern Imperial Counties in southeastern California. The sea is approximately 35 miles long and up to 15 miles wide with approximately 340 square miles of water surface and 105 miles of shoreline. The modern Salton Sea was created in 1905 as a result of flood flows from the Colorado River. Since then, approximately 90 percent of the freshwater inflow to the Salton Sea has been from agricultural runoff water from the Imperial Valley, preventing the sea from drying up as had occurred in the past. As the Salton Sea has no outlets, salts and nutrients concentrate in it. Currently, the Salton Sea has a salinity level that is approximately 60 percent higher than the ocean. Increasing levels of salinity have significantly reduced the presence of fish in the sea. In addition, as the sea has become increasingly nutrient-rich, the occurrences of fish die-offs and unpleasant odors have made the area a less attractive destination for recreation.

Quantification Settlement Agreement (QSA). The QSA is a water agreement signed in 2003 that limits California’s Colorado River water usage to 4.4 million acre-feet annually. Key elements of the QSA include water conservation measures, environmental mitigation obligations, regulatory provisions, and funding agreements. The agreement includes water transfers from the IID to the SDCWA and CVWD of up to 300,000 acre-feet per year for at least 35 years. By transferring water out of the region, the QSA water transfer reduces the amount of water available for agricultural use in the Imperial Valley. In turn, this reduces the amount of water flowing into the sea – further increasing salinity and causing the sea’s shoreline to recede. The IID was required to put mitigation flows into the sea for 15 years starting in 2003. Mitigation flows into the sea stopped as of January 1, 2018.

Impacts of a Shrinking Sea. As the sea shrinks, an increasing amount of dry, dusty lakebed, known as playa, is exposed. In 2018, a total of 2,260 acres of lakebed were newly exposed. Since 2003, the area of the Salton Sea has reduced by 24,200 acres. This dust contains toxic elements such as arsenic and selenium, some of which were transported through agricultural runoff. Due to the high winds and arid climate around the sea, this fine dust becomes airborne, increasing the amount of particulate matter in the air in the Imperial and Coachella Valleys and causing health problems for residents.

Additionally, the shrinking sea is impairing wildlife habitats. As wetland habitat has been lost to development throughout California and northern Mexico, hundreds of thousands of birds along the Pacific Flyway have come to rely on the sea for food, rest, and nesting. Protecting against extreme salinity in the sea is important for survival of the fish that provide food for these birds. The lake and its surroundings also provide habitat for some at-risk fish and bird species.

State Obligation. In order to facilitate the signing of the QSA, the state agreed to assume most of the financial responsibility for mitigating negative environmental impacts and for the Salton Sea restoration effort. The Legislature enacted a package of legislation in 2003 to implement the QSA. This legislation spells out the financial responsibility assumed by the state, consistent with the QSA, and also establishes a number of broad goals for the restoration effort.

Salton Sea Management Plan (SSMP). On March 16, 2017, the CNRA released its draft Phase I 10-year plan for Salton Sea management. Updated in August 2018, Phase I has an estimated cost of approximately $400 million and is intended to guide investments at the Salton Sea to protect public health and ecosystem values as the sea recedes. The plan calls for the construction of 29,800 acres of ponds, wetlands, and dust-suppression projects on portions of exposed lakebed. It outlines annual targets for completion, beginning with 500 acres in 2018 and ramping up to 4,200 acres in 2028. As of March 2019, the state did not meet the acreage target for 2018. To date, the state has allocated nearly $310 million for projects at the Salton Sea. The majority of the allocated funding has not been spent. In addition, the state has not identified funding for the ongoing operations and maintenance of the projects that will be built under the 10-year plan.

Governance. The Legislature has not established a governance structure to implement the SSMP. In 2008, the Legislative Analyst’s Office (LAO) recommended the Legislature adopt a model of direct state control with the DWR as the lead agency for Salton Sea restoration projects, as this would provide the greatest accountability to the Legislature. The CNRA has designated the DWR as the lead agency for SSMP implementation due to its ability to use design-build procurement authority for projects constructed at the sea.

On November 7, 2017, the SWRCB issued Order WR 2017-0134 to hold the state accountable for following through on the 10-year plan and outlining the SWRCB’s oversight role. Every year, the board will hold a public meeting by March 31 to hear a progress report on the previous year, including updates on completed projects, amount of acreage completed, and project finances. The order identifies steps to be taken if the state fails to achieve those targets, and commits the state to creating a long-term plan beyond the initial 10 years.

Current Status. On March 19, 2019, the CNRA and its departments presented an update to the SWRCB. The update confirmed that the 2018 target of building 500 acres of habitat and dust suppression was not met. Though many factors contributed, the state has had difficulty obtaining an agreement to provide access to project sites. A final easement agreement with the IID is needed to resolve access issues and enable the state to move forward with design of the Species Conservation Habitat (SCH) project, a large-scale project that anchors the first phase of the SSMP. The parties are working together to resolve outstanding questions and concerns, with a focus on reaching an agreement on site access by May 1, 2019.

Staffing Levels. To date, most state staff working on Salton Sea issues have been temporarily assigned or have worked on Salton Sea issues as a fraction of their full job duties. The state has said that it is increasing staffing and accountability to implement the SCH project and the overall SSMP. The DWR has committed to hiring additional staff for the SSMP, with thirteen full time equivalent staff identified in the 2018-19 budget.

Location of the Office of the Salton Sea. A location for the Office of the Salton Sea is not designated in the bill. It may make sense to locate staff working on Salton Sea issues near the Salton Sea, rather than in Sacramento or another location. However, some of the Office of the Salton Sea staff may be required to be based in Sacramento to ensure coordination with leadership at the CNRA, other state departments, and the Legislature.

Oversight Example – Toll Bridge Program Oversight Committee. While the Toll Bridge Program Oversight Committee was instituted for a large transportation infrastructure program, it may be useful as a potential analogue for how the Salton Sea Oversight Committee could result in minimized delays and controlled costs for SSMP implementation. In 2005, concerned about escalating costs, the Legislature created the Toll Bridge Program Oversight Committee to oversee the $9 billion Toll Bridge Seismic Retrofit Program, and required the California Department of Transportation to develop a comprehensive risk management plan.

According to the State Auditor, these two factors minimized delays and controlled costs. For example, oversight committee decisions resulted in cost avoidance and savings totaling at least $505 million. Comprehensive risk management played a critical role in preventing more than $455 million in potential costs and seven years in probable delays. The seismic program experienced significant cost growth between 1997 and 2005, and the additional oversight provided by the oversight committee helped to stabilize the cost. The State Auditor found that the seismic program will end in 2019 roughly on budget at a cost of about $9 billion.

Prior and Related Legislation:

SB 51 (Ducheny), Chapter 303, Statutes of 2010, established the Salton Sea Restoration Council as a state agency in the CNRA to oversee restoration of the Salton Sea. The Council was disbanded by Governor Brown in 2012.

AB 71 (V. Manuel Pérez), Chapter 402, Statutes of 2013, requires the Secretary of the Natural Resources Agency to lead Salton Sea restoration efforts, in consultation and coordination with the Salton Sea Authority.

AB 1095 (E. Garcia), Chapter 722, Statutes of 2015, requires the CNRA, on or before March 31, 2016, to submit to the Legislature a list of shovel-ready Salton Sea restoration projects, including information regarding project costs and project completion timelines.

SB 1365 (Hueso, 2018) would have established the Office of Salton Sea Restoration to oversee the implementation of the Salton Sea Management Plan. The Assembly Water, Parks, and Wildlife Committee hearing on this bill was cancelled at the request of the author and the bill subsequently died on file.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

Analysis Prepared by: Keith Cialino / W., P., & W. / (916) 319-2096