Shannon Grove

Existing law vests the State Oil and Gas Supervisor with regulatory authority over wells for the discovery of geothermal resources or wells on land producing geothermal resources. Existing law establishes the Geologic Energy Management Division in the Department of Conservation, under the direction of the supervisor, who is required to supervise the drilling, operation, maintenance, and abandonment of oil and gas wells in the state and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field, so as to prevent damage to life, health, property, and natural resources. Under existing law, a person who fails to comply with requirements relating to the regulation of oil or gas operations is guilty of a misdemeanor.

Existing law imposes, among other things, an annual charge upon each person operating or owning an interest in an oil or gas well, with respect to the production of the well, which charge is payable to the Treasurer for deposit into the Oil, Gas, and Geothermal Administrative Fund. Existing law requires funds from those charges to be used exclusively for the support and maintenance of the Department of Conservation, which is charged with the supervision of oil and gas operations, for the State Water Resources Control Board and the regional water quality control boards for their activities related to oil and gas operations that may affect water resources, and for the support of the State Air Resources Board and the Office of Environmental Health Hazard Assessment for their activities related to oil and gas operations that may affect air quality, public health, or public safety. Existing law imposes annual limits on expenditures by the division from the Oil, Gas, and Geothermal Administrative Fund, as provided.

This bill would establish the New Technology Program within the division to facilitate the evaluation of repurposing oil and gas wells or geothermal wells for renewable energy storage or generation purposes. The bill would require the supervisor to approve or deny project proposals from operators to repurpose oil and gas wells or geothermal wells for energy storage or renewable energy generation, including synthetic geothermal resources, as provided. The bill would require, upon approval of a project by the supervisor, the oil and gas wells or geothermal wells that are part of the project to be designated as experimental wells, as defined, for the duration of the project. The bill would impose an annual charge on operators of experimental wells to defray the regulatory costs incurred by the state, as provided. The bill would require the proceeds of the annual charge to be deposited into the Oil, Gas, and Geothermal Administrative Fund. The bill would require the division to, on or before an unspecified date, and annually thereafter, provide a report to the applicable legislative policy and budget committees on program activities for the preceding calendar year, highlighting accomplishments and including recommendations for statutory and regulatory changes to more readily achieve program goals.