Date of Hearing: July 10, 2019

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Adam Gray, Chair

SBPCA Bill Id:SB 169

Author:(Jackson) – As Introduced Ver:January 28, 2019

SENATE VOTE: 30-2

SUBJECT: Pipeline safety: records

SUMMARY: This bill revises certain provisions of the Elder California Pipeline Safety Act of 1981 (Act) to authorize the State Fire Marshal (SFM), for purposes of carrying out the requirements of state or federal law relating to hazardous liquid pipeline safety, to require the operator of a pipeline to maintain records, make reports and provide any information that the SFM reasonably requires, as specified. Specifically, this bill:

1) Authorizes the SFM to require the owner or operator of a pipeline to establish and maintain records specified by the SFM.

2) Authorizes the SFM to require the owner or operator of a pipeline to make reports pursuant to methods and in a manner specified by the SFM.

3) Authorizes the SFM to disclose records, reports, or other information required to be maintained by the Act to an officer, employee, or authorized representative of the state or the United States for purposes of carrying out the requirements of the Act or the federal Hazardous Liquid Pipeline Act, or when relevant to a proceeding pursuant to the Act.

4) Repeals a current exclusion in the Act, which currently exempts from the definition of “pipeline,” a pipeline for the transportation of crude oil that operates by gravity or at a stress level of 20 percent or less of the specified minimum yield strength of the pipe.

EXISTING LAW:

1) Requires, under the Act, the SFM to administer provisions regulating the inspection of intrastate pipelines that transport hazardous liquids.

2) Requires, a pipeline operator to make available to the SFM, upon presentation of appropriate credentials, any records, maps, or written procedures that are required by the Act to be kept by the pipeline operator and which concern accident reporting, design, construction, testing or operation and maintenance.

3) Authorizes the SFM to enter, inspect, and examine, at reasonable times and in a reasonable manner, the records and properties of any pipeline operator to determine whether the pipeline operator complies with the Act.

4) Defines “pipeline,” for purposes of the Act, to include every intrastate pipeline used for the transportation of hazardous liquid substances or highly volatile liquid substance, as specified. The Act excludes a pipeline for the transportation of crude oil that operates by gravity or at a stress level of 20 percent or less of the specified minimum yield strength of the pipe.

FISCAL EFFECT: Unknown

COMMENTS:

Purpose of the bill: According to the author, “California has worked hard to establish a meaningful and effective regulatory framework that ensures pipeline safety while still working with industry as oil and gas production continues in this state. Even still, some industry actors seek to circumvent compliance by exploiting exemptions in the law not meant for evading state regulation.”

The author adds, “this bill will close that loophole by requiring inspection for all instrastate pipelines, regardless of if they are operating at full or partial pressures. It is important to note these annual inspections are not excessively onerous, and are critical for all parties to avoid damage and losses from oil spills. Additionally, this bill clarifies that pipeline operators must keep records, and in a useable and readable form, as specified, and provide those records for inspection upon request by the SFM. Again, this will allow state regulators to safeguard pipeline operations and protect the state, the community, the environment, and ultimately, the integrity of the industry itself.”

Jurisdiction of the pipelines: The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has exclusive federal authority over interstate pipeline facilities (49 USC § 60101, et seq.). Interstate pipeline is defined as a pipeline or that part of a pipeline that is used in the transportation of hazardous liquid or carbon dioxide in interstate or foreign commerce. Typically, these lines cross state borders, or begin in federal waters. Additionally, a Federal Energy Regulatory Commission (FERC) filing by the operator can be the determining factor.

The California Department of Forestry and Fire Protection’s (Cal FIRE) SFM has safety regulatory and enforcement authority over intrastate hazardous liquid pipelines. Intrastate pipeline is defined as a pipeline or that part of a pipeline to which this part applies that is not an interstate pipeline. For example, pipelines that are located entirely within state borders including offshore state waters.

Hazardous liquid pipelines in California: PHSMA has responsibility of 8 pipeline operators with approximately 1,188 miles of interstate pipeline. The SFM has responsibility for 52 pipeline operators with approximately 5,600 miles of intrastate pipeline, 344 pump stations and tank farms, and 744 breakout tanks.

Pipeline definition. The Act currently defines a “pipeline,” for purposes of the Act, to include every intrastate pipeline used for the transportation of hazardous liquid substances or highly volatile liquid substances. The current definition excludes a pipeline for the transportation of crude oil that operates by gravity or at pressures 20 percent or less of the specified maximum yield strength of the pipe. The author’s staff notes, “this includes various pipelines that are located in coastal zones and other sensitive environmental areas."

Refugio Oil Spill: The Refugio oil spill occurred on May 19, 2015, just north of the Refugio State Beach in Santa Barbara County, California. The spill came from a ruptured pipeline owned by Plains All American Pipeline. It is estimated that the rupture spilled approximately 100,000 to 140,000 gallons of heavy crude oil. The immediate oil spill area stretched over nine miles of California coastline, and tar balls have washed up as far as one hundred miles from the spill site.

On May 20, 2015, Governor Brown issued an emergency proclamation for Santa Barbara County due to the effects of the oil spill. Refugio State Beach and El Capitan State Beach were closed for over a month because of the oil spill. Approximately 260 dead birds and mammals were found in the spill area. However, the full impact will never be known since animals may travel a long distance before succumbing to their injuries.

U.S. Pipeline Threat Assessment: In a 2011 pipeline threat assessment, the Transportation Security Administration (TSA) stated that, while foreign groups like Al Qaeda have expressed interest in attacking U.S. pipelines, "violent domestic extremists, homegrown terrorists, and lone offenders likely also pose threats to pipeline networks." According to the assessment, domestic extremists "include, animal and environmental activists, disgruntled employees, and lone individuals... often focused on single issues." The assessment concluded, however, "with high confidence that the terrorist threat to the U.S. pipeline industry is low." In a 2016 Federal Register notice, TSA stated that it expects pipeline companies will report approximately 30 "security incidents" annually—both physical and cyber. A threat assessment has not been publicly released since 2011.

Recent Acts of Domestic Pipeline Sabotage: Recent acts of sabotage against U.S. pipelines have raised concern about the security of the nation's energy pipeline system. On October 11, 2016, a coordinated group of domestic environmentalists caused the shutdown of five pipelines in four states transporting crude oil from Canada to the United States. The activists entered locked enclosures to access manual valves, seeking to stop the flow of oil on these pipelines. According to a press release, the activists acted in support of Native American opposition to the Dakota Access Pipeline and to encourage an "extraordinary shift away from fossil fuels" to avert a "climate catastrophe." Prior to the October disruptions there had not been a successful physical attack on U.S. oil or natural gas pipelines over the last 15 years. However, in 2011 and 2012, there were two separate attempts to bomb U.S. natural gas pipelines in Oklahoma and Texas which were unsuccessful.

National Intelligence Community’s 2019 Worldwide Threat Assessment: According to the Director of National Intelligence, Daniel Coats, in his Worldwide Threat Assessment, “China presents a persistent cyber espionage threat and a growing attack threat to our core military and critical infrastructure systems. China has the ability to launch cyber attacks that cause localized, temporary disruptive effects on critical infrastructure—such as disruption of a natural gas pipeline for days to weeks—in the United States.”

Arguments in support: The California Interfaith Power & Light writes in support, “all major faith traditions share the mandate to care for and protect all of Creation. SB 169 will help fulfill this goal in many ways, the chief one being the protection of health. Indeed, pipeline breaches that result in crude oil spills are harmful to the health of the people in the area in addition to the wildlife.”

Arguments in opposition unless amended: The Western States Petroleum Association writes, “SB 169 is silent on proper controls regarding the handling of sensitive information for the safety of the general public. WSPA is concerned that the significant expansion of authority for SFM to copy and distribute all pipeline field documents, without any controls regarding the handling of business sensitive confidential information could result in releasing sensitive information that has the potential of compromising public safety, the environment, and the safe operations of pipelines. It’s important to allow pipeline operators to review the data to be shared and when necessary, claim data as confidential.”

Committee amendments: To balance the need of the SFM’s access to records, reports, and other documents to ensure the integrity of pipelines with the security concerns raised by the pipeline owners and operators, staff is recommending the following amendments to this bill:

Section 51015 of the Government Code is amended to read:

(b) The State Fire Marshal, for purposes of carrying out the requirements of state or federal law relating to hazardous liquid pipeline safety, including, but not limited to, developing or assisting in the development of pipeline standards or regulations, determining compliance with this chapter, or carrying out any requirement of this chapter, may reasonably require the owner or operator of a pipeline to do the following:

(e) Except as provided in subsection (f), notwithstanding any other provision of law, any records, reports or other information provided to the State Fire Marshal pursuant to this chapter shall be subject to the California Public Records Act (Chapter 3.5 of Division 7, section 6250 et seq.).

(f) Any records, reports or other information provided to the State Fire Marshal pursuant to this chapter, including information disclosed to any other agency pursuant to subsection (d), shall not be disclosed to any other person except pursuant to a request in accordance with the Public Record Act. Upon receipt of a records request, the State Fire Marshal or other agency receiving the request shall determine whether such records, reports or information shall be exempt from disclosure.

(1) In making such determination, the State Fire Marshal or other agency receiving the request shall consider whether the disclosure of the records, reports or information would potentially be detrimental to the security or integrity of the pipeline or to the safety of employees affiliated with the operation of the pipeline.

(2) Upon receipt of a records request, the State Fire Marshal or other agency receiving the request shall inform the owner or operator of the pipeline who provided the records and shall provide the owner or operator with an opportunity to submit a response and information in support of exemption from disclosure before making the determination whether such records shall be exempt from disclosure.

Section 51015.05 of the Government Code is amended to read:

(c) The State Fire Marshal shall regularly update the database and shall make the information in the database available to the public, and to all local, state, and federal agencies, except information exempt from public disclosure pursuant to section 51015, subdivision (f).

Prior Legislation: SB 295 (Jackson) Chapter 607, Statutes of 2015. Required the SFM to annually inspect all intrastate pipelines and operators of intrastate pipelines under the jurisdiction of the SFM.

AB 864 (Williams) Chapter 592, Statutes of 2015. Required pipelines to have the best available technology to reduce the amount of oil released in an oil spill to protect state waters and wildlife.

AB 2201 (Bradford) Chapter 481, Statutes of 2012. Raised the civil penalties associated with violations of the Elder California Pipeline Safety Act of 1981.

REGISTERED SUPPORT / OPPOSITION:

Support

California Interfaith Power & Light

Oppose Unless Amended

Western States Petroleum Association

Opposition

None on file.

Analysis Prepared by: Mike Dayton / G.O. / (916) 319-2531

 THIRD READING  

Bill No: SB 169

Author: Jackson (D)

Introduced: 1/28/19

Vote: 21

SENATE GOVERNMENTAL ORG. COMMITTEE: 13-1, 3/12/19

AYES: Dodd, Wilk, Allen, Archuleta, Borgeas, Bradford, Chang, Galgiani, Glazer, Hill, Hueso, Portantino, Wiener

NOES: Nielsen

NO VOTE RECORDED: Jones, Rubio

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Pipeline safety: records

SOURCE: Author

DIGEST: This bill revises and recasts certain provisions of the Elder California Pipeline Safety Act of 1981 (Act). In addition, this bill authorizes the State Fire Marshal (SFM), for purposes of carrying out the requirements of state or federal law relating to hazardous liquid pipeline safety, to require the operator of a pipeline to maintain records, make reports and provide any information that the SFM reasonably requires, as provided.

ANALYSIS:

Existing law:

1. Requires, under the Act, the SFM to administer provisions regulating the inspection of intrastate pipelines that transport hazardous liquids.
2. Requires, a pipeline operator to make available to the SFM, upon presentation of appropriate credentials, any records, maps, or written procedures that are required by the Act to be kept by the pipeline operator and which concern accident reporting, design, construction, testing or operation and maintenance.
3. Authorizes the SFM to enter, inspect, and examine, at reasonable times and in a reasonable manner, the records and properties of any pipeline operator to determine whether the pipeline operator complies with the Act.
4. Defines “pipeline,” for purposes of the Act, to include every intrastate pipeline used for the transportation of hazardous liquid substances or highly volatile liquid substance, as specified. The Act excludes a pipeline for the transportation of crude oil that operates by gravity or at a stress level of 20 percent or less of the specified minimum yield strength of the pipe.

This bill:

1. Revises and recasts specified provisions in the Act and authorizes the SFM, for purposes of carrying out the requirements of state or federal law relating to hazardous liquid pipeline safety, to require the owner or operator of a pipeline to establish and maintain records, make reports, and provide any information that the SFM reasonably requires, as provided.
2. Revises and recasts specified provisions in the Act, which authorize the SFM, at any reasonable time, to have a right of entry or through any premises on which records, reports, or any other information required to be maintain for purposes of the Act.
3. Authorizes the SFM to disclose records, reports, or other information required to be maintained by the Act to an officer, employee, or authorized representative of the state or the United States for purposes of carrying out the requirements of the Act or the federal Hazardous Liquid Pipeline Act, or when relevant to a proceeding pursuant to the Act.
4. Repeals a current exclusion in the Act, which currently exempts from the definition of “pipeline,” a pipeline for the transportation of crude oil that operates by gravity or at a stress level of 20 percent or less of the specified minimum yield strength of the pipe.

Comments

Purpose of the bill. According to the author’s office, “California has worked hard to establish a meaningful and effective regulatory framework that ensures pipeline safety while still working with industry as oil and gas production continues in this state. Even still, some industry actors seek to circumvent compliance by exploiting exemptions in the law not meant for evading state regulation. This bill will close that loophole by requiring inspection for all intrastate pipelines, regardless of if they are operating at full or partial pressures.”

Additionally, the author’s office states that, “the bill remedies several gaps in the states’ pipeline safety program for oil and gas transmission and transportation pipelines.”

Pipeline safety regulations. While the federal government is primarily responsible for developing, issuing and enforcing pipeline safety regulations, under the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), the pipeline safety statutes provide for state intrastate regulatory, inspection, and enforcement responsibilities under an annual certification.

To qualify for certification, a state must adopt the minimum federal regulations. The PHMSA may authorize a state to act as its agent to inspect interstate pipelines, but retains responsibility for enforcement of the regulations. Most states have supported the concept of common stewardship in pipeline safety. According to PHMSA, the resulting federal/state partnership allows leveraging of resources to deliver a cost-effective program that has one of the best safety records in transportation.

A state must also provide for injunctive and monetary sanctions substantially the same as those authorized by the pipeline safety statutes. As part of this program, PHMSA provides reimbursable federal grant funds to state pipeline programs to offset up to 80 percent of costs.

Pipeline definition. The Act currently defines a “pipeline,” for purposes of the Act, to include every intrastate pipeline used for the transportation of hazardous liquid substances or highly volatile liquid substances. However, the current definition excludes a pipeline for the transportation of crude oil that operates by gravity or at a stress level of 20 percent or less of the specified minimum yield strength of the pipe. Unfortunately, this includes various pipelines that are located in coastal zones and other sensitive environmental areas.

According to the author’s office, while federal regulatory requirements would still apply to these pipelines, this administration is currently sponsoring proposals that would weaken federal oversight and has shown little interest in enforcing existing law to protect against the threat of leaks. This bill seeks to delete the current exclusion and allow for greater state oversight over pipelines that operate at a stress level of 20 percent or less.

Related/Prior Legislation

SB 295 (Jackson, Chapter 607, Statutes of 2015) required the SFM to annually inspect all intrastate pipelines and operators of intrastate pipelines under the jurisdiction of the SFM.

AB 864 (Williams, Chapter 592, Statutes of 2015) required pipelines to have the best available technology to reduce the amount of oil released in an oil spill to protect state waters and wildlife.

AB 2201 (Bradford, Chapter 481, Statutes of 2012) raised the civil penalties associated with violations of the Elder California Pipeline Safety Act of 1981.

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

SUPPORT: (Verified 4/23/19)

None received

OPPOSITION: (Verified 4/23/19)

None received

Prepared by: Felipe Lopez / G.O. / (916) 651-1530

4/24/19 15:07:05

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2019 - 2020 Regular

Bill No: SB 169 Hearing Date: 3/12/2019

SUBJECT: Pipeline safety: records

DIGEST: This bill revises and recasts certain provisions of the Elder California Pipeline Safety Act of 1981 (Act). In addition, the bill authorizes the State Fire Marshal (SFM), for purposes of carrying out the requirements of state or federal law relating to hazardous liquid pipeline safety, to require the operator of a pipeline to maintain records, make reports and provide any information that the SFM reasonably requires, as provided.

ANALYSIS:

Existing law:

1. Requires, under the Act, the SFM to administer provisions regulating the inspection of intrastate pipelines that transport hazardous liquids.
2. Requires, a pipeline operator to make available to the SFM, upon presentation of appropriate credentials, any records, maps, or written procedures that are required by the Act to be kept by the pipeline operator and which concern accident reporting, design, construction, testing or operation and maintenance.
3. Authorizes the SFM to enter, inspect, and examine, at reasonable times and in a reasonable manner, the records and properties of any pipeline operator to determine whether the pipeline operator complies with the Act.
4. Defines “pipeline,” for purposes of the Act, to include every intrastate pipeline used for the transportation of hazardous liquid substances or highly volatile liquid substance, as specified. The Act excludes a pipeline for the transportation of crude oil that operates by gravity or at a stress level of 20 percent or less of the specified minimum yield strength of the pipe.

This bill:

1. Revises and recasts specified provisions in the Act and authorizes the SFM, for purposes of carrying out the requirements of state or federal law relating to hazardous liquid pipeline safety, to require the owner or operator of a pipeline to establish and maintain records, make reports, and provide any information that the SFM reasonably requires, as provided.
2. Revises and recasts specified provisions in the Act, which authorize the SFM, at any reasonable time, to have a right of entry or through any premises on which records, reports, or any other information required to be maintain for purposes of the Act.
3. Authorizes the SFM to disclose records, reports, or other information required to be maintained by the Act to an officer, employee, or authorized representative of the state or the United States for purposes of carrying out the requirements of the Act or the federal Hazardous Liquid Pipeline Act, or when relevant to a proceeding pursuant to the Act.
4. Repeals a current exclusion in the Act, which currently exempts from the definition of “pipeline,” a pipeline for the transportation of crude oil that operates by gravity or at a stress level of 20 percent or less of the specified minimum yield strength of the pipe.

Background

Purpose of the bill. According to the author’s office, “California has worked hard to establish a meaningful and effective regulatory framework that ensures pipeline safety while still working with industry as oil and gas production continues in this state. Even still, some industry actors seek to circumvent compliance by exploiting exemptions in the law not meant for evading state regulation. This bill will close that loophole by requiring inspection for all intrastate pipelines, regardless of if they are operating at full or partial pressures.”

Additionally, the author’s office states that, “the bill remedies several gaps in the states’ pipeline safety program for oil and gas transmission and transportation pipelines.”

Pipeline safety regulations. While the federal government is primarily responsible for developing, issuing and enforcing pipeline safety regulations, under the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), the pipeline safety statutes provide for state intrastate regulatory, inspection, and enforcement responsibilities under an annual certification.

To qualify for certification, a state must adopt the minimum federal regulations. The PHMSA may authorize a state to act as its agent to inspect interstate pipelines, but retains responsibility for enforcement of the regulations. Most states have supported the concept of common stewardship in pipeline safety. According to PHMSA, the resulting Federal/State partnership allows leveraging of resources to deliver a cost-effective program that has one of the best safety records in transportation.

A state must also provide for injunctive and monetary sanctions substantially the same as those authorized by the pipeline safety statutes. As part of this program, PHMSA provides reimbursable federal grant funds to state pipeline programs to offset up to 80 percent of costs.

Pipeline definition. The Act currently defines a “pipeline,” for purposes of the Act, to include every intrastate pipeline used for the transportation of hazardous liquid substances or highly volatile liquid substances. However, the current definition excludes a pipeline for the transportation of crude oil that operates by gravity or at a stress level of 20 percent or less of the specified minimum yield strength of the pipe. Unfortunately, this includes various pipelines that are located in coastal zones and other sensitive environmental areas.

According to the author’s office, while federal regulatory requirements would still apply to these pipelines, this administration is currently sponsoring proposals that would weaken federal oversight and has shown little interest in enforcing existing law to protect against the threat of leaks. This bill seeks to delete the current exclusion and allow for greater state oversight over pipelines that operate at a stress level of 20 percent or less.

The office of the State Fire Marshall's Pipeline Safety Division. The SFM regulates the safety of approximately 5,500 miles of intrastate hazardous liquid transportation pipelines and acts as an agent of the federal Office of Pipeline Safety concerning the inspection of more than 2,000 miles of interstate pipelines. Pipeline Safety staff inspect, test, and investigate to ensure compliance with all federal and state pipeline safety laws and regulations. Hazardous liquid pipelines are also periodically tested for integrity using procedures approved by the SFM. The program has been certified by the federal government since 1981.

Refugio Oil Spill. The Refugio oil spill occurred on May 19, 2015, just north of the Refugio State Beach in Santa Barbara County, California. The spill came from a ruptured pipeline owned by Plains All American Pipeline. It is estimated that the rupture spilled approximately 100,000 to 140,000 gallons of heavy crude oil. The immediate oil spill area stretched over nine miles of California coastline, and tar balls have washed up as far as one hundred miles from the spill site.

On May 20, 2015, Governor Brown issued an emergency proclamation for Santa Barbara County due to the effects of the oil spill. Refugio State Beach and El Capitan State Beach were closed for over a month because of the oil spill. Approximately 260 dead birds and mammals were found in the spill area. However, the full impact will never be known since animals may travel a long distance before succumbing to their injuries.

Prior/Related Legislation

SB 295 (Jackson, Chapter 607, Statutes of 2015) required the SFM to annually inspect all intrastate pipelines and operators of intrastate pipelines under the jurisdiction of the SFM.

AB 864 (Williams, Chapter 592, Statutes of 2015) required pipelines to have the best available technology to reduce the amount of oil released in an oil spill to protect state waters and wildlife.

AB 2201 (Bradford, Chapter 481, Statutes of 2012) raised the civil penalties associated with violations of the Elder California Pipeline Safety Act of 1981.

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

SUPPORT:

None received

OPPOSITION:

None received