Amended  IN  Senate  March 30, 2023
Amended  IN  Senate  March 20, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 438

Introduced by Senator Caballero
(Coauthor: Senator Newman)

February 13, 2023

An act to amend Section 39741.2 of the Health and Safety Code, and to amend Section 3132 of, and to add Section 5919.5 to, Sections 3130 and 3132 of the Public Resources Code, relating to carbon sequestration.


LEGISLATIVE COUNSEL'S DIGEST


SB 438, as amended, Caballero. Carbon sequestration: Carbon Capture, Removal, Utilization, and Storage Program. Program: incidental and unintentional residual oil production.

Existing law requires the State Air Resources Board, on or before January 1, 2025, to adopt regulations for a unified permit application for the construction and operation of carbon dioxide capture, removal, or sequestration projects to expedite the issuance of permits or other authorizations for the construction and operation of those projects. Existing law requires a relevant state agency to use the unified permit application when issuing a permit or other authorization for the construction and operation of a carbon dioxide capture, removal, or sequestration project.

This bill would, until the unified permit application is adopted, require a relevant state agency to use its own application when issuing a permit or other authorization for the construction and operation of those projects.

Existing law prohibits a well operator from injecting a concentrated carbon dioxide fluid produced by a carbon dioxide capture, removal, or sequestration project into a Class II injection well for purposes of enhanced oil recovery, including the facilitation of enhanced oil recovery from another well.
This bill would exclude from the above prohibition the incidental and unintentional residual oil brought to the surface produced at the surface from a Class VI well, as defined, resulting from the injection of a concentrated carbon dioxide fluid into a Class VI well that has been deemed emptied of oil before injection during the execution of a carbon dioxide capture, removal, or sequestration project. The bill would prohibit the production of carbon dioxide by a carbon capture, removal, or sequestration project. The bill would require any oil produced from a Class VI well to be reported to the State Air Resources Board and the United States Environmental Protection Agency, Region 9, within 60 days of its occurrence. Because a violation of this reporting requirement would be a crime, this bill would impose a state-mandated local program.

The California Wildlife, Coastal, and Park Land Conservation Act, an initiative bond measure approved by the voters as Proposition 70 at the June 7, 1988, statewide primary election, authorizes bonds to be issued and sold for use in carrying out wildlife, coastal, and parkland conservation programs. The act prohibits the disbursement of funds from the sale of the bonds to a grant applicant unless the applicant agrees to use the property only for the purposes of the act and to make no other use, sale, or other disposition of the property except in accordance with a specific act of the Legislature. The act requires a grantee to take certain action if the use of the property acquire through grants under the act is changed to one other than permitted under the category from which the funds were appropriated.

This bill would authorize an applicant receiving a grant pursuant to the act for the acquisition of property to authorize, including by the grant of an easement, the use of the property for a carbon dioxide capture, removal, or sequestration project if that use is not reasonably anticipated to interfere with or otherwise affect the use of the property permitted under the category from which funds appropriated were used to acquire the property.

Existing law requires the Natural Resources Agency, in consultation with the Public Utilities Commission, no later than February 1, 2023, to provide a proposal to the Legislature to establish a state framework and standards for the design, operation, siting, and maintenance of intrastate pipelines carrying carbon dioxide fluids of varying composition and phase to minimize the risk posed to public and environmental health and safety.

This bill would state the intent of the Legislature to enact further legislation to establish those recommended framework and standards.

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 no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NOYES  

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


SECTION 1.Section 39741.2 of the Health and Safety Code, is amended to read:
39741.2.

(a)In furtherance of the objectives in Section 39741.1, on or before January 1, 2025, the state board shall, in consultation with relevant state and local agencies, adopt regulations for a unified permit application for the construction and operation of carbon dioxide capture, removal, or sequestration projects to expedite the issuance of permits or other authorizations for the construction and operation of those projects. The unified permit application shall solicit from applicants, and direct to all relevant state agencies, all information needed to obtain permits and other authorizations from relevant state and local agencies necessary for the construction and operation of a carbon dioxide capture, removal, or sequestration project. An applicant’s use of the unified permit application shall be optional.

(b)(1)Before adopting the unified permit application described in subdivision (a), the state board shall conduct at least three public workshops to receive comments from the public.

(2)The state board shall design the workshops to allow the public to participate from any location via the internet or a call-in telephone number.

(c)The unified permit application developed by the state board pursuant to subdivision (a) shall not impair, abridge, or alter any rights or obligations under the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code), or its implementing regulations, with respect to the review or approval of a carbon dioxide capture, removal, or sequestration project.

(d)The unified permit application developed by the state board pursuant to subdivision (a) is for the purpose of efficiency but shall not displace the role of individual permitting agencies and shall not eliminate, abridge, or reduce the review or issuance of the individual permits covered by the application by the respective agencies. As part of the unified permit application, the state board shall, where possible, streamline duplicative administrative requirements or permit application questions.

(e)(1)The unified permit application shall be used by relevant state agencies when issuing a permit or other authorization for the construction and operation of a carbon dioxide capture, removal, or sequestration project.

(2)Until the unified permit application is adopted pursuant to subdivision (a), a relevant state agency shall continue to use its own application when issuing a permit or other authorization for the construction and operation of a carbon dioxide capture, removal, or sequestration project.

SECTION 1.

 Section 3130 of the Public Resources Code is amended to read:

3130.
 For purposes of this article, the following terms mean the following:
(a) “Beneficial use” has the same meaning as set forth in subdivision (f) of Section 13050 of the Water Code.
(b) “Class II well” has the same meaning as set forth in Section 144.6 of Title 40 of the Code of Federal Regulations.
(c) “Class VI well” has the same meaning as set forth in Section 144.6(f) of Title 40 of the Code of Federal Regulations.

(c)

(d) “Exempted aquifer” has the same meaning as set forth in Section 144.3 of Title 40 of the Code of Federal Regulations.

(d)

(e) “State board” means the State Water Resources Control Board.

(e)

(f) “Underground Injection Control Program” means a program covering Class II wells for which the division has received primacy from the United States Environmental Protection Agency pursuant to Section 1425 of the federal Safe Drinking Water Act (42 U.S.C. Sec. 300h-4).

SEC. 2.

 Section 3132 of the Public Resources Code, is amended to read:

3132.
 (a) For purposes of this section, the following definitions apply:
(1) “Carbon dioxide capture project” means a project that uses a process to separate carbon dioxide from industrial, commercial, or energy-related sources, other than oil or gas production from a well, and produces a concentrated fluid of carbon dioxide with the intent of preventing emission of the carbon dioxide into the atmosphere.
(2) “Carbon dioxide capture, removal, or sequestration project” means a carbon dioxide capture project or carbon dioxide removal project, that seeks to provide for the long-term isolation or utilization of the carbon dioxide from the atmosphere through storage in a geologic formation.
(3) “Carbon dioxide removal project” means a project that uses a process to remove carbon dioxide from the atmosphere.
(4) “Concentrated carbon dioxide fluid” means a fluid that contains concentrated carbon dioxide that is proportionately greater than the ambient atmospheric concentration of carbon dioxide.
(b) (1) An operator shall not inject a concentrated carbon dioxide fluid produced by a carbon dioxide capture, removal, or sequestration project into a Class II well for purposes of enhanced oil recovery, including the facilitation of enhanced oil recovery from another well.
(2) For purpose purposes of this subdivision, any incidental and unintentional residual oil brought to the surface produced at the surface from a Class VI well resulting from the injection of a concentrated carbon dioxide fluid into a Class VI well that has been deemed emptied of oil before injection during the execution of a carbon dioxide capture, removal, or sequestration project is not considered enhanced oil recovery. Carbon dioxide shall not be produced by a carbon dioxide capture, removal, or sequestration project. Any oil produced from a Class VI well shall be reported to the State Air Resources Board and the United States Environmental Protection Agency, Region 9, within 60 days of its occurrence.

SEC. 3.Section 5919.5 is added to the Public Resources Code, to read:
5919.5.

Pursuant to paragraph (2) of subdivision (a) of Section 5919 and notwithstanding subdivision (b) of Section 5919 or any agreement entered into pursuant to Section 5919, an applicant receiving a grant pursuant to this division for the acquisition of property may authorize, including by the grant of an easement, the use of the property for a carbon dioxide capture, removal, or sequestration project, as defined in Section 3132, if that use is not reasonably anticipated to interfere with or otherwise affect the use of the property permitted under the category from which funds appropriated were used to acquire the property.

SEC. 4.

It is the intent of the Legislature to enact further legislation to establish the recommended framework and standards for the design, operation, siting, and maintenance of intrastate pipelines carrying carbon dioxide fluids of varying composition and phase developed pursuant to subdivision (b) of Section 71465 of the Public Resources Code.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.