BILL ANALYSIS Ó AB 864 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 864 (Williams and Burke) As Amended September 4, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | |(May 18, 2015) |SENATE: |32-5 |(September 10, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- (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. AB 864 Page 2 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 AB 864 Page 3 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. AB 864 Page 4 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 AB 864 Page 5 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