SB 237: Oil spill prevention: gasoline specifications: suspension: California Environmental Quality Act: exemptions: County of Kern: transportation fuels assessment: coastal resources.

(1) The Lempert-Keene-Seastrand Oil Spill Prevention and Response Act generally requires the administrator for oil spill response, acting at the direction of the Governor, to implement activities relating to oil spill response, including emergency drills and preparedness, and oil spill containment and cleanup, and to represent the state in any coordinated response efforts with the federal government. Existing law requires the Governor to establish a California oil spill contingency plan that provides for an integrated and effective state procedure to combat the results of major oil spills within the state and that specifies state agencies to implement the plan. Existing law requires the administrator to adopt and implement regulations governing the adequacy of oil spill contingency plans to be prepared and implemented and requires the regulations to provide for the best achievable protection of coastal and marine waters. Existing law requires these regulations to permit the development, application, and use of an oil spill contingency plan for similar vessels, pipelines, terminals, and facilities within a single company or organization, and across companies and organizations. Existing law requires these regulations to ensure, among other things, standards for determining a reasonable worst case oil spill.

Under the act, the owner or operator of a facility where a spill could impact waters of the state is required apply for and obtain a certificate of financial responsibility issued by the administrator for the facility or the oil to be handled, stored, or transported by the facility.

This bill would require the administrator to publicly post a list of all applications for certificates of financial responsibility submitted by facility owners and operators on the internet website of the Office of Spill Prevention and Response and would require the posting to include specified information about applicants, including reasonable worst case spill volume of the facility to be covered by the certificate and the amount of financial responsibility demonstrated, as provided. This bill would, commencing January 15, 2027, and at least once every 10 years thereafter, require the administrator to solicit public input regarding both (A) the appropriateness of the reasonable worst case spill volumes for facilities and (B) the appropriateness of the financial responsibility requirements for facilities. The bill would require the supervisor, based on this feedback, to review and, as appropriate, revise the criteria and formulas for (A) calculating reasonable worst case spill volume and (B) calculating the financial assurances and setting the maximum amount of a certificate of financial responsibility necessary to respond to an oil spill, as provided.

(2) The Elder California Pipeline Safety Act of 1981 requires the State Fire Marshal to administer provisions regulating the inspection of intrastate pipelines used for the transportation of hazardous liquid. A violation of the act is a crime.

This bill would prohibit the restarting of an existing oil pipeline that is 6 inches or larger that has been idle, inactive, or out of service for 5 years or more without passing a spike hydrostatic testing program that meets the requirements established by the State Fire Marshal, as provided. By expanding the scope of a crime, the bill would impose a state-mandated local program. The bill would require these tests to be performed by a qualified testing company, as provided. The bill would require the Office of the State Fire Marshal to promulgate regulations as necessary to implement these provisions. The bill would require the State Fire Marshal to post on its public internet website information fully characterizing the parameters and results of each hydrostatic spike test performed, subject to any information deemed confidential and proprietary, no less than 30 calendar days after each hydrostatic spike test is conducted.

(3) Existing law authorizes the State Air Resources Board (state board) to adopt and implement motor vehicle fuel specifications for the control of air contaminants and sources of air pollution. Existing law requires the state board to establish, by regulation, maximum standards for the volatility of gasoline, as provided. Pursuant to these authorizations, the state board has adopted the California Reformulated Gasoline regulations establishing California-specific gasoline specifications for various regions of the state at specified time periods. Existing regulations also prohibit a person from selling, offering for sale, supplying, offering for supply, or transporting California gasoline that exceeds the applicable cap limit for Reid vapor pressure within each of specified air basins during various defined regulatory periods throughout the year.

This bill would require the Governor to suspend those regulatory control periods on which gasoline exceeding the Reid vapor pressure may be sold or supplied for use in the state, if the Governor, in consultation with the state board and the State Energy Resources Conservation and Development Commission, determines the average retail gasoline price increased substantially or is projected to increase substantially within any 30-day period and a suspension is necessary to protect consumers in the state from extraordinary gasoline price increases and determines, in the Governor’s discretion, that suspension is prudent and unlikely to yield unintended consequences. The bill would require the Governor, in considering whether to suspend the regulatory control periods, to consider the air quality effects and options to mitigate those effects, if necessary and subject to available resources.

(4) Existing law requires the State Energy Resources Conservation and Development Commission (energy commission), on or before January 1, 2024, and every 3 years thereafter, to submit an assessment to the Governor and the Legislature that, among other things, identifies methods to ensure a reliable supply of affordable and safe transportation fuels in California and evaluates the price of transportation fuels, including branded and unbranded retail prices, alternate formulations of gasoline with lower carbon impact, and other products suitable for production from refineries in California, as provided.

This bill would require the next version of the above-described transportation fuels assessment to evaluate the cost and supply impacts of allowing the sale of gasoline with alternative specifications from the state board’s gasoline specifications, as provided. The bill would require the energy commission to recommend a strategy to facilitate the sale of gasoline with those alternative specifications that, at a minimum, considers a trigger mechanism for when the gasoline with those alternative specifications may be sold, the existing variance process, and the use of a fee associated with the sale of the gasoline with those alternative specifications, as provided. The bill would additionally require the next version of this assessment to evaluate the development of westwide gasoline specification that could be used in a western region to include California and areas outside of California as an alternative to the California-specific specification in order to stabilize the petroleum market and petroleum prices in the western region, as provided. The bill would additionally require the energy commission, on or before March 31, 2026, to submit an assessment to the Governor and the Legislature that evaluates recommendations and strategies identified by the vice chair of the energy commission in a specified letter, and offers recommendations to the Legislature on potential changes to working group authorities or structures to support the state’s reliable, equitable, safe, and affordable transition away from petroleum fuels.

(5) The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment. CEQA prohibits a lead agency or a responsible agency from requiring the preparation of a subsequent or supplemental EIR unless one or more of 3 specified events occurs.

Existing law establishes the Geologic Energy Management Division in the Department of Conservation under the direction of the State Oil and Gas Supervisor, who is required to supervise the drilling, operation, maintenance, and abandonment of oil and gas wells in the state and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field so as to prevent damage to life, health, property, and natural resources. Existing law requires the operator of a well to file a written notice of intention to commence drilling with, and prohibits any drilling until approval is given by, the supervisor or district deputy. Existing law prohibits the division from approving any notice of intention within a health protection zone, defined as the area within 3,200 feet of certain residential, educational, health care, detention, or business facilities, except approvals necessary for specified purposes. Existing law requires oil or gas production facilities or wells with a wellhead within a health protection zone to comply with specified health, safety, and environmental requirements, as provided.

This bill would, among other things, deem a specified County of Kern environmental impact report sufficient for full compliance with the requirements of CEQA for purposes of consideration and adoption of amended revisions to a specified County of Kern zoning ordinance, and would establish that this determination of full compliance shall be final and conclusive for purposes of reliance on that environmental impact report by any responsible agency, as provided. The bill would establish that projects that satisfy the requirements of that zoning ordinance and that are approved by the County of Kern under that ordinance are deemed sufficient for full compliance with CEQA and no further environmental review shall be required pursuant to CEQA. This bill would prospectively apply these provisions concerning CEQA compliance to any approvals by the County of Kern with respect to the permitting of oil and gas production operations under any adopted local ordinance and associated development. The bill would also apply these provisions prospectively and retroactively to any pending causes of action and claims for which no final nonappealable judgment has been entered, as provided.

The bill would prohibit the granting of approvals by the County of Kern or the Geologic Energy Management Division in reliance on that environmental impact report for any operation located in a health protection zone, regardless of whether the above-described prohibitions on health protection zones are enforceable. The bill would require the division to be the lead agency for projects in Kern County that include approval of a notice of intention to drill or rework an oil or gas well within 3,200 feet of specified types of buildings, to the extent such projects may be authorized by law. The bill would prohibit the division from approving more than 2,000 notices of intention to drill new wells in reliance on that environmental impact report as a responsible agency, unless the State Energy Resources Conservation and Development Commission makes a formal finding that additional permit issuance is necessary for in-state crude oil production to supply 25% of in-state refinery feedstock demand, and that such production would likely help reduce costs for retail consumers of gasoline in the state.

The bill would repeal all of the above-described provisions concerning CEQA in the County of Kern on January 1, 2036.

To the extent a lead agency would be required to determine the applicability of some of the above-described exemptions and determinations of full compliance with CEQA, the bill would impose a state-mandated local program.

(6) The California Coastal Act of 1976 requires a person wishing to perform or undertake any development in the coastal zone to obtain a coastal development permit. The act encourages coastal-dependent industrial facilities to locate or expand within existing sites and requires that facilities be permitted reasonable long-term growth, as provided. The act specifies that new or expanded oil and gas development is not to be considered a coastal-dependent industrial facility and is to be permitted only if it is consistent with the act and meets certain requirements, including a requirement that oil produced offshore is to be transported onshore by pipeline using the best achievable technology, as defined, and onshore transport of the oil to processing and refining facilities by pipeline. The act applies the pipeline requirements on new or expanded oil extraction operations, and defines terms for these purposes, including the term “expanded oil extraction.” The act authorizes the transport of the oil by other modes of transportation if certain conditions are met.

This bill would require the onshore transportation of the oil to processing and refining facilities to use the best available technology, as provided. The bill would repeal authorization for the use of alternative modes of transportation. The bill would revise the definition of “expanded oil extraction” to include reactivation of a facility idled, inactive, or out of service for more than 5 years, or an increase in oil extraction from the use of hydraulic fracturing, extended reach drilling, acidization, or other unconventional technologies.

The act authorizes the repair and maintenance of an existing oil and gas facility to be permitted as a coastal-dependent industrial facility if certain requirements are met.

The bill would require a person to obtain a new coastal development permit for the repair, reactivation, and maintenance of an oil and gas facility, including an oil pipeline, that has been idled, inactive, or out of service for 5 years or more.

Because the bill would impose additional duties on a local government with a certified local coastal program in processing and reviewing an application for a coastal development permit, this bill would impose a state-mandated local program.

(7) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

(8) This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Kern.

(9) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.