California Legislature Passes Oil Drilling Setback Requirements
New law establishes a 3,200-foot setback around new and reworked existing wells among several new requirements.
The California legislature passed S.B. 1137, which implements a 3,200-foot buffer zone, known as a setback, between oil wells and schools, homes, and playgrounds. The drilling setback has been a priority for the state legislature, as California was one of the few states without a setback requirement.
Most recently, in April 2021, the legislature considered SB 467, a bill that included the implementation of a 2,500-foot setback. The bill, which would have also prohibited new or renewed fracking permits, acid well stimulation, cyclic steaming, and water and steam flooding, failed to pass out of the Senate Committee on Natural Resources and Water.
S.B. 1137
The main requirements in S.B. 1137 are the health protection zones; the sensitive receptor inventory and map; indemnity bond for plugging and abandoning wells; the notice of attention to drill and offer to test the water; a leak detection and response plan; and emissions reporting. The bill exempts underground gas storage wells and the related production facilities from these requirements.
Health Protection Zones
Beginning January 1, 2023, the law establishes a “health protection zone” for new and reworked oil wells of 3,200 feet from a “sensitive receptor,” which it defines as a residence, an education resource, a community resource center, a health care facility, live-in housing, or building housing a business that is open to the public. The measurement must be made from the property line of the receptor. If the receptor building is set back more than 50 feet from the property line, the measurement is made from the outline of the building footprint to 3,200 feet in all directions.
There are limited exceptions to the requirement. This includes to prevent or respond to a threat to public health, safety, or the environment; to comply with a court order; or to plug and abandon or reabandon a well.
Sensitive Receptor Inventory and Map
The law also requires operators to submit a sensitive receptor inventory and map to the Geologic Energy Management Division in the Department of Conservation (CalGEM) by July 1, 2023. Operators must also provide updates to the inventory and map annually thereafter. CalGEM must make all current sensitive receptor inventories and maps publicly available on its website.
Indemnity Bond for Plugging and Abandoning
The law also requires the well operator to provide an indemnity bond sufficient to pay the full cost of plugging and abandoning the well and decommissioning any attendant production facilities. This requirement takes effect January 1, 2023.
Notice of Intention to Drill and Offer of Water Testing
At least 30 days before beginning drilling, the law requires operators to contact property owners and tenants within a 3,200-foot radius of the well and provide a record of delivery and offer to sample and test water wells or surface water on their property before and after drilling. If a property owner or tenant requests sampling and testing of a water well or surface water, drilling may not begin until a baseline water sample has been collected. The owner or tenant must submit the request in writing within 20 days from the date of the notice, and the surface property owner must make necessary accommodations to enable the collection of a water sample within 10 days from the date notice is provided. The operator must collect a follow up water sample 30-60 days after drilling is complete. The operating must pay for the water sampling and testing.
Leak Detection and Response Plan
The law requires all operators to submit a leak detection and response plan to CalGEM by January 1, 2025, with division approval or notices of deficiencies by January 1, 2026. The plan must be implemented by January 1, 2027. Beginning January 1, 2027, the operator shall suspend all production and injection operations within a health protection zone unless an approved leak detection and response plan is fully implemented in that area. CalGEM must hold public workshops related to the leak detection and response plans. Operators must also review and update their plans at least once every five years, and submit their plan for CalGEM approval.
Emissions Reporting
Beginning January 1, 2027, the law requires an operator with a well and an attendant production facility in a health protection zone to provide on annual report to CalGEM on its emissions system. This includes information on the number of and amounts of time the emissions detection system was not operating; the number of validated alarms, and the reasons for the alarms; the number of leaks that occurred, the time needed to repair the leak, and a brief description of the leak, including the impact on air quality and community exposure; the number of times the surrounding community was notified after a leak persisted for 48 hours; the number of times and length of time production and injection operations and other use of the facility were suspended due to leaks; any baseline and postdrilling groundwater testing performed by location; and the division shall make the information submitted by the operators available to the public on its internet website.