BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 864


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          864 (Williams and Burke)


          As Amended  September 4, 2015


          Majority vote


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          |ASSEMBLY:  |      |(May 18, 2015) |SENATE: |32-5  |(September 10,   |
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               (vote not relevant)




          Original Committee Reference:  NAT. RES.


          SUMMARY:  Requires pipelines to have the best available  
          technology to reduce the amount of oil released in an oil spill  
          to protect state waters and wildlife. 


          The Senate amendments delete the Assembly version of the bill,  
          relating to solid waste facilities, and instead:


          1)Require, by January 1, 2018, that any new or replacement  
            pipeline near environmentally and ecologically sensitive areas  
            in the coastal zone shall use best available technology in  
            order to reduce the amount of oil released in a spill to the  
            environment.









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          2)Specify that best available technology include, but is not  
            limited to, installation of leak detection technologies,  
            automatic shutoff systems, remote controlled sectionalized  
            block valves, or any combination of these technologies based  
            on a risk analysis conducted by the operator.


          3)Require, by July 1, 2018, that any operator of an existing  
            pipeline near environmentally and ecologically sensitive areas  
            in the coastal zone submit a plan to retrofit these pipelines  
            with best available technology, and complete the retrofits by  
            January 1, 2020.


          4)Require the Office of the State Fire Marshal (SFM) to adopt  
            regulations by July 1, 2017 to implement this bill. Requires  
            the regulations to include all of the following:


             a)   A definition of automatic shutoff systems;


             b)   A process to assess the adequacy of the operator's risk  
               analysis;


             c)   A process by which an operator is allowed to request  
               confidential treatment of information; and,


             d)   A determination of how near an environmentally and  
               ecologically sensitive area a pipeline must be to subject  
               to be the requirements of the bill.


          5)Require SFM to consult with the Office of Spill Prevention and  
            Response (OSPR) about potential impacts to state water and  
            wildlife from oil spills.


          6)Require an operator to notify SFM of any new construction of  








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            retrofit of a pipeline in waters near environmentally and  
            ecologically sensitive areas in the coastal zone. 


          EXISTING LAW, pursuant to the Elder California Pipeline Safety  
          Act of 1981 (Elder Act):


          1)Requires the SFM to adopt regulations in compliance with the  
            federal law relating to hazardous liquid pipeline safety.


          2)Requires any new pipeline constructed after January 1, 1984,  
            and which normally operates under conditions of constant flow  
            and pressure, to have a means of leak detection and cathodic  
            protection that the SFM determines is acceptable.


          3)Defines "pipelines" as including every intrastate pipeline  
            used to transport hazardous liquid substances or highly  
            volatile liquid substances, as provided.  


          4)Requires SFM to study the spacing of valves which would limit  
            spillage into standard metropolitan statistical areas and  
            environmentally sensitive areas from surrounding higher  
            ground.  Specifics the following:


             a)   Requires SFM to adopt regulations to require the  
               addition of valves on existing pipelines if any existing  
               pipeline system's valve spacing is deemed insufficient to  
               protect California's uniquely situated population centers  
               and environmental resources. 


             b)   Authorizes SFM to adopt regulations to require new  
               valves on new, existing, or replacement pipelines as  
               necessary to protect the public interest if the study  
               indicates that guidelines for valve spacing do not, in the  
               SFM's opinion, adequately protect these population centers  
               and environmental resources.








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          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, initial costs of $1.69 million followed by $1.37  
          million annually ongoing to the California Hazardous Liquid  
          Pipeline Safety Fund (special) for SFM to develop and implement  
          regulations on best achievable technology. 


          COMMENTS:  On May 19, 2015, a pipeline owned by Houston-based  
          Plains All American Pipeline ruptured, spilling approximately  
          101,000 gallons to 140,000 gallons of heavy crude oil along the  
          Gaviota coast in Santa Barbara County.  It is estimated that  
          21,000 gallons of the oil went down a storm culvert onto cliffs  
          and into the Pacific Ocean.  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.   
          The pipeline that ruptured, known as Line 901, is a common  
          carrier pipeline that transports oil that was produced on  
          platforms offshore in both state and federal waters to be  
          refined in Santa Maria or Kern County. 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.  Fisheries from Canada de Alegria to Coal Oil Point  
          were also closed for over a month, which negatively impacted  
          several commercial fisheries - including lobster, crab, shrimp,  
          halibut, urchin, squid, whelk, and sea cucumber.  The Oiled  
          Wildlife Care Network recovered 195 dead birds and 106 dead  
          marine mammals from the spill.  Dead marine mammals recovered  
          included dolphins, sea lions, and seals. Sensitive habitat of  
          the California Least Tern and the Snowy Plover, birds protected  
          by the Endangered Species Act, has been damaged.  Hotels, tour  
          outfits, and other tourism businesses have experienced  
          cancelations and decreased bookings due to the spill.  More than  
          1,000 workers from local, state and federal agencies worked to  
          clean up the beaches.  Over 14,000 gallons of oily water have  
          been recovered to date.  News reports indicate the pipeline was  
          potentially severely corroded where it ruptured.  The spill and  
          events leading up to the spill remain under investigation.  Line  
          901 was not equipped with automatic shut off technology that is  
          installed on other pipelines of this size in Santa Barbara  








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          County. 


          The Elder Act regulates intrastate pipelines and the vast  
          majority of those pipelines carry petroleum based hazardous  
          liquids.  There are a small number of intrastate pipelines that  
          carry carbon dioxide. SFM estimates that there may be 2,000  
          miles of intrastate pipeline located within State waters and  
          coastlines.  While Line 901 has never shipped oil out of state,  
          it has been classified by the Pipeline and Hazardous Materials  
          Safety Administration (PHMSA) as an interstate pipeline, which  
          is not subject to the Elder Act.  However, a September 8, 2015  
          letter to the author of this bill from the President of Plains  
          All American stated, "Plains would be willing to engage in a  
          dialogue regarding a potential reclassification of Lines 901 and  
          903 to state jurisdiction."  Plains All American could make a  
          request to PHMSA to reclassify their pipelines to intrastate  
          pipelines, which would make them subject to the requirements of  
          this bill.    


          Analysis Prepared by:                                             
                          Michael Jarred / NAT. RES. / (916) 319-2092  FN:  
          0002373