Das Williams First District, Vice Chair Board of Supervisors Gregg Hart County Administration Building Second District

R1

That the Santa Barbara County Board of Supervisors instruct the Santa Barbara County Planning and Development Department to identify the health and environmental risks of idle oil wells in the County through an annual report to the Santa Barbara County Board of Supervisors. Prior Response Recommendation 1 This recommendation requires further analysis to be completed by June 20, 2022. The annual well and facility inspections conducted by P&D, County Fire (facilities only) and APCD of active and idle wells provide regulatory oversight to minimize the county’s risk of exposure to public health and environmental risks. However, in order to provide the public with information regarding annual well inspections, within one-year P&D could develop a public facing web portal that identifies inspection dates and results for each well inspected. Further Analysis Recommendation 1 Santa Barbara County’s petroleum unit is unique in providing annual inspections of all active, idle and long- term idle wells, representing an additional level of oversight of active and idle wells that does not exist in other neighboring counties, while CalGEM assumes responsibility and oversight of all orphaned wells. All other neighboring oil-producing counties including Ventura County, San Luis Obispo County, Los Angeles County and Monterey County do not have staff who proactively conduct annual inspections on oil & gas wells including idle and orphan wells and rely solely on CalGEM for these well inspections. Similarly, the County Fire Departments of neighboring counties Ventura and Orange, both oil-producing counties, do not have “oil and gas’ sections in their Fire Departments. Los Angeles County is the only nearby County that performs similar inspection services in this regard as the Santa Barbara County Fire Department. The petroleum unit does not inspect orphan wells, but other agencies, such as CalGEM and APCD do conduct inspections of these wells and will continue to do so until CalGEM receives the funding to properly plug and abandon them. Finally, both San Luis Obispo County APCD and Ventura County APCD perform oil and gas inspections similarly to how the Santa Barbara County APCD performs these inspections as described below. County Fire Department The Inspection Services Section of the County Fire Department’s Fire Prevention Division regulates onshore oil and gas operations and facilities maintenance by enforcing Chapter 15 of the County Code, the California Fire Code, and other applicable state laws. County Code Chapter 15 and the California Fire Code provide the Fire Department with inspection and permitting authority for all onshore oil and gas facilities; which typically include habitable buildings, fire suppression equipment, water tanks, defensible space and Fire Department access. Each oil and gas facility is inspected annually, with additional inspections performed as needed to ensure compliance. The Fire Department does not inspect orphan or idle wells. Any observed violations are entered into the Fire Department’s record management system and an Inspection Report is delivered to the operator to notify them of the Department’s findings. If an operator is found to be non-compliant during inspections, the Department will pursue administrative enforcement including fines, misdemeanor citations, and possible imprisonment. The Fire Department collaborates with the District Attorney with regard to these enforcement actions. Additionally, the Inspection Services Section responds to oil spills in support of the California Department of Fish & Wildlife Office of Spill Prevention and Response (OSPR) to ensure that impacts to waterways, or wildlife due to an oil spill are avoided or minimized to the extent feasible. In the event of an oil spill the Fire Department assumes a Unified Command with OSPR, United States Coast Guard or the Environmental Protection Agency depending on the location of the spill. Santa Barbara County Air Pollution Control District (APCD) The APCD regulates stationary sources of air pollution within the County, including onshore oil and gas production sources, under the authority of the federal Clean Air Act and the state Health and Safety Code. The APCD issues permits for equipment and processes that have a potential to emit air pollutants at oil and gas facilities which may have active, idle, or orphaned wells. APCD staff routinely perform inspections at permitted oil and gas facilities to ensure operators comply with their APCD permit conditions, as well as federal, state, and local air pollution rules and regulations such as federal Part 70 requirements, California Air Resources Board’s Regulation for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities, and APCD Fugitive Emissions Inspection and Maintenance Rule 331. During oil and gas facility inspections, the APCD uses an instrument to check for and measure hydrocarbon leaks, reviews the onsite equipment to make sure it matches the approved permit, reviews the facility’s compliance with the operational restriction conditions of the permit, and reviews records. Facility inspections are performed at different frequencies based on the facility’s potential to emit, actual emissions, and compliance history. All APCD permitted facilities are inspected at least once every three years, with most inspections occurring more frequently (e.g., once per quarter, once every six months, once per year, or once every two years). In addition to these routine inspections, the APCD may conduct additional inspections when odor or dust complaints are received and for surveillance purposes. Furthermore, the APCD has a specialized trailer-mounted portable monitor called the AirPointer that can be deployed in communities to measure particulate matter, hydrogen sulfide, benzene, toluene, ethylbenzene, xylene, ozone, and meteorological conditions. The monitor can be deployed quickly and has the ability to store and transmit data to the APCD in real- time. If deficiencies are found during inspections, the APCD issues a Notice of Violation (NOV) to document the noncompliance which includes monetary penalties based on excess emissions released and the number of days of violation. If an NOV is not immediately rectified, APCD staff follows up with the source to ensure compliance is achieved. In addition, oil and gas facility operators are required to self-inspect their equipment for fugitive hydrocarbon leaks on an annual or quarterly basis, depending on the hydrocarbon leak history. State of California Geologic Energy Management Division (CalGEM) In addition to the petroleum unit and the APCD, the State of California Department of Conservation (DOC) Geologic Energy Management Division (CalGEM) staff also inspects idle wells within Santa Barbara County, providing an additional layer of oversight. CalGEM also regulates certain pipelines and facilities associated with oil production and wastewater injection. Operators are required to notify CalGEM prior to performing certain tests, inspections, and operations, as well as requiring or allowing CalGEM to witness certain tests, inspections, and operations. In 2019, CalGEM amended and adopted regulations to update its testing requirements for idle wells, active observation wells, and wells partially plugged, pursuant to Assembly Bill 2729. These regulations established requirements related to the maintenance and plugging and abandonment of idle wells. CalGEM witnesses testing of idle wells including fluid-level tests, casing pressure tests, and clean out tags. CalGEM also inspects deserted and orphan wells when preparing for state abandonment work, during the work, and after the work is completed. Additionally, CalGEM witnesses operations associated with the end-of-life plugging and abandonment of wells. CalGEM conducts environmental inspections of active, idle, deserted, and orphan wells approximately once every two years. During these inspections, CalGEM staff check to ensure operators and wells follow the requirements of the Public Resources Code (PRC) and California Code of Regulations (CCR). This may include identifying potential problems and checking that wells and facilities are not leaking at the surface, well cellars are free of fluids, there is proper signage, sites are free of vegetation, and roads provide adequate access for necessary equipment or vehicles, in addition to other requirements of the PRC and CCR. Examples of equipment available to inspectors include cameras, drones, Photoionization Detectors (PID) and Forward Looking Infrared (FLIR) cameras for gas detection, GPS survey equipment, and well records. CalGEM has various enforcement mechanisms if operations are not in compliance including, notices of violation, civil penalties, and enforcement orders. Where appropriate, other agencies such as the Regional Water Quality Control Board, California Department of Fish and Wildlife, Fire Department, United States Coast Guard, Environmental Protection Agency, Air Quality Control Board, County Petroleum, and others may be notified. In addition to the well inspections, CalGEM also updated its Idle Well Program in 2019 to create more stringent requirements including incentives for operators to manage and eliminate their idle wells by entering into Idle Well Management Plans (IWMPs). The goal of the Idle Well Program is to eliminate idle wells in the State. An idle well is defined by CalGEM as a well that for a period of 24 months has not either produced oil or natural gas. These regulations now require operators to prepare an idle well inventory and evaluation plan that provides CalGEM with all the basic information needed to catalog each operator’s idle wells. Under the IWMP, operators are required to describe how idle wells are to be maintained and when they are expected to be plugged and abandoned or returned to service. By submitting a plan, an operator agrees to eliminate a specified number of long-term idle wells, wells that have been idle for eight or more years, per year for each year of the plan. The number of long- term idle wells to be eliminated is dictated by statute and dependent on the operator’s statewide idle well inventory. Operators are encouraged to prioritize the phasing out of their remaining long term idle wells (idle for 8 years or more) either through abandonment or return to service because the annual fees and testing requirements for idle wells steadily increase the longer they are kept in an idle state. These increasing costs and testing requirements provide an incentive for operators to plug and abandon their wells rather than keep them idle. In addition, fees from operators are deposited into the Hazardous and Idle-Deserted Well Abatement Fund to help fund the permanent sealing and closure of deserted wells. The well and facility inspection schedules described herein and conducted by P&D, County Fire (facilities only), APCD and CalGEM are typically staggered throughout the year which provides constant regulatory oversight of operators and reduces the County’s risk of exposure to health and environmental risks. This recommendation will not be implemented. The annual well and facility inspections conducted by P&D, County Fire and APCD of active and idle wells, in addition to the oversight provided at the state level by CalGEM, provide sufficient regulatory oversight to minimize the county’s risk of exposure to public health and environmental risks. Additionally, the records for these inspections are available to any interested party, upon request. However, in order to provide the public with information regarding annual well inspections, within one year P&D will develop a public facing web portal that identifies P&D inspection dates and results for each well inspected.

R2

That the Santa Barbara County Board of Supervisors instruct the Santa Barbara County Planning and Development Department to determine all actual and potential fiscal liabilities related to idle oil wells through an annual report to the Santa Barbara County Board of Supervisors. Prior Response Recommendation 2 This recommendation requires further analysis to be completed by June 20, 2022. As noted in the response to Finding 2 above, all fiscal liabilities related to idle oil wells are the responsibility of the State or the operator. Information regarding CalGEM’s financial assurance requirements (bonding) can be found on their website https://www.conservation.ca.gov/calgem/pubs_stats/Pages/forms.aspx. Further Analysis Recommendation 2 Financial assurances for drilling new oil and gas wells or re-working existing wells are required by CalGEM prior to operation of a well pursuant to Public Resources Code (PRC) Sections 3204 through 3205.7 and the California Department of Conservation Geologic Energy Management Statutes & Regulations (January 2020). Under these requirements, an operator who, on or after January 1, 2018, conducts certain alterations to a well, or who acquires a well, shall file with CalGEM an individual indemnity bond for each well altered or acquired in the amount of $25,000-$40,000. Because these financial assurances are collected by the state, the county does not currently require additional financial sureties. However, the P&D Long Range Planning work program includes direction by the Board of Supervisors to consider changes to the County’s existing ordinances and policies that would further regulate oil and gas facilities with the intent of added protections for the environment. P&D is evaluating whether these changes could include a requirement for operators to provide financial assurances above and beyond those required by CalGEM, amongst other changes. Beyond providing indemnity bonds prior to the operation of a well, the owner/operator(s) of idle and inactive wells are liable for all actual and potential fiscal liabilities should they arise. Funds used for state abandonments come from assessment fees and idle well fees paid to the state by operators. There are two state funds that are set up to address hazards with wells. The Hazardous and Idle-Deserted Well Abatement Fund (HIDWAF) is funded by idle well fees and continuously appropriated to CalGEM and is used to plug and abandon wells and mitigate a hazardous or potentially hazardous condition. The Oil, Gas, and Geothermal Administrative Fund (OGGA) is primarily funded by operator assessment fees and is used by CalGEM to mitigate a hazardous or potentially hazardous condition with orphan wells. Pursuant to PRC Section 3237(c)(5), CalGEM has the authority to require a previous operator to abandon an orphaned well if the most recent operator doesn’t have the financial resources to fully cover the cost of plugging and abandoning that well. Under these regulations, CalGEM may hold previous operator(s) financially responsible for abandonment dating back to any valid transfer of ownership of the well after January 1, 1996. If no previous operator is financially capable under these criteria, CalGEM may then undertake the plugging and abandonment of orphaned wells themselves. A well that has been identified as orphaned is placed on a list of other orphan wells that are located throughout the state. When orphaned wells are identified as a potential danger to life, health, or natural resources and there is no operator that is responsible for plugging and abandoning them, they are identified as “hazardous wells” and are given a high priority to be plugged and abandoned by CalGEM. In addition to these currently applicable requirements, on April 4, 2022, CalGEM released a pre- rulemaking Discussion Draft for the purpose of receiving public input on proposed regulations requiring cost estimates where operators will need to report to CalGEM how much it will cost to plug and abandon their wells and remove the associated surface equipment. At the federal level, approximately $1.15 billion in funds will soon be made available under the Biden Administration Bipartisan Infrastructure Law for the plugging and abandonment of orphaned oil & gas wells throughout the Country. Under this program, CalGEM may receive up to $25 million in initial grants to address wells orphaned by (HVI Cat Canyon (formerly Greka) in Santa Barbara County, and is estimated to receive a total of $166 million in federal grants to properly abandon orphaned wells throughout the State. Recently, Governor Newsome proposed an additional $200 million in the state budget to plug and abandon orphaned wells. This recommendation will not be implemented by the Board. All fiscal liabilities related to idle oil wells are the responsibility of the State or the operator. Information regarding CalGEM’s financial assurance requirements (bonding) can be found on their website https://www.conservation.ca.gov/calgem/pubs_stats/Pages/forms.aspx. Additional fiscal information associated with active and idle oil and gas equipment will likely be available through CalGEM’s Rule making process that may also require operators to report cost estimates associated with plugging and abandoning their wells and removing their associated surface equipment. As noted above, the future County oil and gas ordinance amendment package which is aimed at further regulating oil and gas facilities to increase environmental protection may include a requirement for operators to provide financial assurances above and beyond those required by CalGEM.

R3

That the Santa Barbara County Board of Supervisors instruct the Santa Barbara County Planning and Development Department to maintain an adequate number of trained personnel to staff the Petroleum Unit of its Energy, Minerals and Compliance Division. Prior Response Recommendation 3 The recommendation requires further analysis to be completed by June 20, 2022. The existing staff complete the work assigned to the Petroleum Unit under Chapter 25. As discussed above, the part- time supervisor and another Energy, Minerals and Compliance staff member are trained and are available to assist with annual inspections of oil and gas facilities when needed. These fully trained staff members help to ensure that there is adequate staffing to monitor active and idle wells in Santa Barbara County under the current code. Further Analysis Recommendation 3 The recommendation will not be implemented by the Board. As mentioned above, Santa Barbara County’s petroleum unit is unique in providing annual inspections of all active and idle wells and facilities, representing an additional level of oversight of idle wells that does not exist in other coastal counties. These inspections, in conjunction with those carried out by APCD CalGEM staff provide an adequate frequency of inspections to ensure idle wells are monitored appropriately and do not negatively impact the health and safety of the community.

R4

That the Santa Barbara County Board of Supervisors instruct the Santa Barbara County Planning and Development Department to enforce compliance with the Santa Barbara County Code Chapter 25 (the “Petroleum Code”) provisions governing removal of oil equipment from idle wells. Prior Response Recommendation 4 This recommendation requires further analysis to be completed by June 20, 2022. Storage of idle oil well equipment is regulated by P&D’s Petroleum Unit through the annual well and facilities inspection process. While the Chapter 25 does not require equipment to be removed from idle well locations, it does require the timely removal of equipment from drill sites for new wells and also from the sites of abandoned wells Further Analysis Recommendation 4 The inspection findings are shared between the petroleum unit, APCD and CalGEM and if the other agencies identify unkempt equipment associated with idle wells, they notify the petroleum unit as a matter of practice to ensure operators are held to the requirements of Chapter 25. This recommendation will not be implemented by the Board. This recommendation is not warranted and will not be implemented because the storage of idle oil well equipment is regulated by P&D’s Petroleum Unit through the annual well and facilities inspection process. While Chapter 25 does not require equipment to be removed from idle well locations, it does require the timely removal of equipment from drill sites for new wells and also from the sites of abandoned wells. In addition to Chapter 25, the County Fire Department may require the removal of idle equipment if they determine it is required for fire safety or fire prevention actions.