A bill to allow the use of renewable natural gas (RNG) in the production of traditional transportation fuels in California was one of only two energy-related legislative proposals this year vetoed by Gov. Gavin Newsom, who alleged it would misapply the state's low-carbon fuel standard (LCFS) regulation.

Among more than 50 energy-related bills in the state legislature, more than half were not acted upon, but kept alive as two-year bills; another 19 passed, and two, including Assembly Bill (AB) 1195, were rejected by Newsom, according to the California Independent Petroleum Association (CIPA) and the nonprofit group Women in Energy. The legislative session ended in Mid-September.

CIPA supported AB 1195, contending it would help reduce greenhouse gas emissions in support of the state's aggressive climate change initiatives by providing an additional avenue for RNG, or biomethane, to be used and credited to the production of the state's billion gallon/day transportation fuels production "without having to build costly and redundant natural gas infrastructure."

In vetoing the measure, Newsom said AB 1195 would require the California Air Resources Board (CARB) to allow RNG deliveries via common carrier pipelines to crude oil production or transport facilities from a source that CARB determines reduces methane emissions under the state's LCFS regulations.

"In 2018, CARB amended the LCFS regulation and made a carefully considered decision to prohibit this type of transfer because doing so would undermine the program's ability to achieve ozone and particulate matter," Newsom said. "LCFS regulation must be [used] to reduce air pollution and health risks, not make them worse."

Of seven bills that CIPA was tracking to support or oppose, only two were signed into law by the governor, CIPA spokesperson Sabrina Lockhart said. Besides the AB 1195 veto, four other measures were made into two-year bills. CIPA opposed AB 246, an attempt to pass a 10% oil severance tax, which was effectively killed in committee, but it could be brought up next year.

Similarly, a proposed half-mile setback for oil and gas activity from residences, schools and hospitals, among other things, was killed in the Assembly Appropriations Committee, but it also could be considered in 2020, Lockhart said.

Bills watched closely by CIPA that were signed by Newsom included AB 1057, renaming the Division of Oil, Gas and Geothermal Resources (DOGGR) the California Geologic Energy Management Division (CalGEM) effective Jan. 1. The bill also requires operators to post additional security bonds or alternatives to cover estimated costs of remediating wells and facilities. CIPA, which believes the new requirements could make it uneconomic for small operators to produced in California, said it will seek an amendment to protect those companies.

Also signed by Newsom was Senate Bill 551, directing CalGEM to require operators to submit reports taking total liability for plugging and abandoning all of their decommissioned wells.