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California Issues Draft Permanent Natural Gas Storage Regulations

California's Department of Conservation (DOC) on Friday released preliminary draft permanent regulations covering natural gas storage facilities in the state, an outgrowth of the four-month storage well leak that was sealed in February and an emergency order from Gov. Jerry Brown resulting from the prolonged incident.

The final regulations will eventually replace emergency ones established early this year by DOC's Division of Oil, Gas and Geothermal Resources (DOGGR) (see Daily GPIFeb. 8). The preliminary draft includes new requirements for the state's dozen gas storage fields.

Calling it a "discussion draft," DOC and DOGGR officials said the early release provides an opportunity for public comment prior to starting the formal rulemaking process and will allow them to be "refined into formal draft regulations."

Emergency rules now in effect created a requirement for daily checks for leaks at every well in each of the state's storage facilities. They were a direct response to Brown's emergency proclamation after he toured Southern California Gas Co.'s 86 Bcf, 3,600-acre Aliso Canyon storage field and its leaking storage well early this year (see Daily GPIJan. 6).

Public comments will be compiled by DOGGR through Aug. 11 with two public workshops set for Sacramento (Aug. 9) and Los Angeles' San Fernando Valley (Aug. 11), respectively.

DOC Director and state Oil/Gas Supervisor Ken Harris said the draft permanent rules update construction/operating standards for gas storage wells, new data and monitoring requirements and beefed up risk management/emergency response plans for each storage facility.

"Our emphasis is to ensure public safety and various environmental protections during the operation of storage facilities," Harris said.

Other highlights in the preliminary draft include:

  • More stringent construction standards that include tubing/packer requirements and sub-surface safety valves on all wells;
  • More frequent testing, including casing wall thickness inspections and pressure tests at least every two years; and
  • Mandatory risk management plans including well fires/blowouts, hazardous material spills, explosions, natural disasters, geologic hazards, and emergency response plans.

DOGGR has committed to"significant" public review of the ultimate final regulations.

Ultimately, the final rules would require DOGGR's review and approval of each storage field's injection of gas supplies prior to putting more gas in the field. DOGGR will have the authority to order operations stopped at storage facilities found not to be in compliance with the final rules.

Similarly, DOGGR will have to review and approve each storage project's risk management plan identifying potential threats and hazards to reservoir well integrity, along with risks to life, health, property, and natural resources. The plans also must specify a risk assessment approach and the submission of the results of those assessments.

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