Bill Text: CA AB2257 | 2021-2022 | Regular Session | Introduced

California Assembly Bill 2257 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: State lands: oil and gas leases: cost study.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2022-09-28 - Chaptered by Secretary of State - Chapter 692, Statutes of 2022. [AB2257 Detail]

Download: California-2021-AB2257-Introduced.html

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 2257

Introduced by Assembly Member Boerner Horvath

February 16, 2022

An act to add Section 6880 to the Public Resources Code, relating to state lands, and making an appropriation therefor.

LEGISLATIVE COUNSEL'S DIGEST

AB 2257, as introduced, Boerner Horvath. State lands: oil and gas leases: cost study.

Existing law establishes the State Lands Commission in the Natural Resources Agency. Existing law authorizes the commission to lease tide and submerged lands and beds of navigable rivers and lakes for purposes of the extraction of oil and gas, as provided. Existing law, notwithstanding this provision of law, prohibits a state agency or state officer from entering into any new lease for the extraction of oil or gas from the California Coastal Sanctuary, except as provided.

This bill would require the commission to develop, on or before____, a cost study that measures the fiscal impact of a voluntary buy-out of any lease interests remaining as of January 1, 2023, in actively producing state offshore oil and gas leases in state waters, as provided. The bill would require the commission, on or before December 31, 2024, to submit the cost study to the Governor and the Legislature. The bill would require the commission to make the cost study available on its internet website. The bill would appropriate $1,000,000 from the General Fund to the commission for the purpose of developing the cost study.

Vote: 2/3 Appropriation: YES Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

The Legislature finds and declares all of the following:

(a) Climate change is an existential threat that grows more urgent each passing day.

(b) Average global temperatures are on track to rise by nearly two and a half degrees Celsius this century.

(c) The State of California, the fifth largest economy in the world, is aggressively pursuing various options to reduce greenhouse gas emissions and deaccelerate the impacts of climate change.

(d) The United Nation’s intergovernmental Panel on Climate Change has found that emissions from fossil fuels are the dominant cause of global warming. Oil, a fossil fuel that releases an enormous amount of carbon when burned, exacerbates climate change.

(e) The advances in clean energy development enable California to transition from fossil fuels to clean energy, a transition that will reduce the impacts of climate change.

(f) Although California, in 1994, banned new offshore oil and gas leases through the California Coastal Sanctuary Act of 1994 (Chapter 3.4 (commencing with Section 6240) of Part 1 of Division 6 of the Public Resources Code), the remaining offshore oil and gas leases continue as long as the lessee either produces or is capable of producing oil from the lease, that is, the leases lack an end date and may continue into perpetuity.

(g) In October 2021, an underwater pipeline operated by Amplify Energy Corp ruptured, spilling nearly 25,000 gallons of oil into the Pacific Ocean and causing beach closures, damaging the environment, and harming the regional and state coastal economies.

(h) California’s coastal economy employs 12.3 million people annually, earning a total of almost $883.5 billion and equating to over $2 trillion in gross domestic product.

(i) The risk of an oil spill, and the economic and environmental catastrophe that could follow, coupled with the fact that fossil fuels exacerbate climate change, call for California to seek out ways to quicken the end of offshore oil and gas development.

(j) A cost study that assesses the fiscal impact of buying out the remaining lease interests in the state's actively producing offshore oil and gas leases will provide the knowledge necessary for informed decisionmaking and practical solutions to end offshore oil and gas development, which, from a climate and environmental perspective, is momentous.

(k) A cost study that assesses the fiscal impact of buying out the remaining lease interests in the state’s actively producing offshore oil and gas leases is consistent with California’s role as a global leader in climate protection.

SEC. 2.

Section 6880 is added to the Public Resources Code, immediately following Section 6879, to read:

6880.

(a) The commission shall develop, on or before____, a cost study that measures the fiscal impact of a voluntary buy-out of any lease interests remaining as of January 1, 2023, in actively producing state offshore oil and gas leases in state waters.

(b) The cost study shall consider, including, but not limited to, all of the following factors:

(1) Unrealized state revenues.

(2) Reasonably anticipated lost profits.

(3) Life of the reservoir based on proven reserves.

(4) Decommissioning costs.

(c) (1) On or before December 31, 2024, the commission shall submit the cost study prepared pursuant to this section to the Governor and the Legislature.

(2) The commission shall make the cost study available on its internet website.

(d) (1) The cost study submitted to the Legislature pursuant to subdivision (c) shall be submitted in compliance with Section 9795 of the Government Code.

(2) Pursuant to Section 10231.5 of the Government Code, paragraph (1) of subdivision (c) shall become inoperative on December 31, 2028.

SEC. 3.

The sum of one million dollars ($1,000,000) is hereby appropriated from the General Fund to the State Lands Commission for purposes of developing the cost study required pursuant to Section 6880 of the Public Resources Code.