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(B) All oil and gas pipelines that deliver production to an onshore production facility shall be equipped with a remote-controlled shut-in valve or check valve at or near the receiving facility.
(C) All oil and gas pipelines that cross an offshore facility which do not deliver production to the facility, and may or may not receive production from the facility, shall be equipped with an automatic shut-in valve to be located in the upstream portion of the pipeline at the facility, so as to prevent uncontrolled flow at the facility. This automatic shut-in valve shall be controllable by the integrated safety-control system of the facility.
(D) Any pipeline that delivers gas to an offshore facility for the purpose of gas lift or other operations shall be equipped with an automatic shut-in valve to be located in the upstream portion of the pipeline at the facility, so as to prevent uncontrolled flow at the facility. This automatic shut-in valve shall be controllable by the integrated safety-control system of the facility.
(E) All oil pumps and gas compressors shall be equipped with high-low-pressure shut-in devices.
(F) All pressure sensors, pressure shut-in devices, and automatic shut-in valves shall be tested monthly by the lessee, and shall be witnessed and approved by the Staff. The lessee shall maintain records on the production facility showing the present status and past history of each device, including dates and details of inspection, testing and repairing, adjustment, and reinstallation or replacement.
Note: Authority cited: Sections 6103, 6108, 6216, 6301 and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2133. General Provisions.
(a) This Article 3.4 pertains to oil and gas drilling and production operations on State oil and gas leases located on State tide and submerged lands under the jurisdiction of the State Lands Commission, and is applicable to operations conducted from mobile rigs, fixed offshore structures and upland locations serving these leases.
(b) In addition to complying with Division 6 of the California Public Resources Code and with Title 2, Division 3, Chapter 1 of the California Administrative Code, the lessee shall comply with all applicable laws, rules and regulations now or hereafter promulgated of the United States of the State of California and of any respective political subdivision thereof, including, but not limited to, those of the Division of Oil and Gas, the Department of Fish and Game, the Division of Industrial Safety, the State Water Resources Control Board, and the Regional Water Quality Control Board, the California Coastal Commission, and any respective successors thereto.
(c) All operations conducted on State oil and gas leases shall be carried on in a proper and workmanlike manner in accordance with accepted good oilfield practice.
Note: Authority cited: Sections 6103, 6108, 6216, 6301, and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2134. Definitions.
For purposes of this Article 3.4 the following definition shall apply:
(a) "Staff" shall mean the Executive Officer or other duly authorized member of the Staff of the State Lands Commission.
Note: Authority cited: Sections 6103, 6108, 6216, 6301, and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2135. Administration.
(a) The Staff shall administer this Article 3.4 and shall thereby seek to provide for the prevention and elimination of any contamination or pollution of the ocean and tidelands, for the prevention of waste and for the conservation of natural resources, and for the protection of human health and safety and of property.
(b) The Commission has designed these regulations in as great detail as possible. However, the Commission recognizes that situations may arise which are not specifically covered by this Article 3.4 and that emergency situations may arise which will require immediate decisions by the Staff. In such situations, the Executive Officer or his designee may authorize appropriate procedures to be followed.
Note: Authority cited: Sections 6103, 6108, 6216, 6301, and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2136. Prohibition of Pollution.
(a) Pollution and contamination of the ocean and tidelands and any impairment of or interference with recreation, fishing, or navigation in the waters of the ocean or any bay or any inlet thereof is prohibited; and no oil, tar, residuary product of oil or any refuse of any kind from any well or facility that is deleterious to marine life shall be permitted to be deposited on or pass into the waters of the ocean or any bay or any inlet thereof.
(b) All drilling and production operations shall be conducted in a manner that will eliminate, insofar as is practical, any dust, noise, vibration, or noxious odors.
Note: Authority cited: Sections 6103, 6108, 6216, 6301 and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2137. Suspension of Operations and Corrective Action.
A lessee shall suspend immediately any drilling and production operations, except those which are corrective, protective, or mitigative, in the event of any disaster of or contamination or pollution caused in any manner or resulting from drilling and/or production operations under its lease. Such drilling and/or production operations shall not be resumed until adequate corrective measures have been taken and authorization for resumption of such operations has been made by the Staff. Corrective measures shall be taken immediately whenever pollution has occurred.
Note: Authority cited: Sections 6103, 6108, 6216, 6301 and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2138. Disposal of Drill Cuttings and Drilling Muds.
The lessee shall dispose of those drill cuttings and drilling muds associated with drilling and production well work, in accordance with regulations promulgated by the appropriate Regional Water Quality Control Board. The method employed to dispose of the drill cuttings and drilling muds shall be submitted to the Staff for approval along with the drilling mud program that is required in Section 2128(d)(1).
Note: Authority cited: Sections 6103, 6108, 6216, 6301 and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2139. Oil Spill Contingency Plan.
Each lessee shall prepare and maintain a current oil spill contingency plan for initiating corrective action to control and recover oil spilled in or on the ocean. The plan shall cover both minor and major oil spills associated with lease drilling and production operations. The plan and any subsequent revisions thereto shall be submitted for approval by the Staff.
Note: Authority cited: Sections 6103, 6108, 6216, 6301 and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2140. Pollution Control and Removal Equipment.
(a) Pollution control equipment and material shall be available immediately to each lessee for use in oil pollution control and removal operations on its lease. The equipment and material shall include, but need not be limited to, containment booms, skimming apparatus, licensed chemicals, and absorbents, and shall be the most effective available given the current state of pollution control and removal research and development at the time of acquisition. The lessee shall, however, update such equipment whenever any significant technological improvements are developed.
(b) Emergency equipment shall be maintained on each mobile drilling rig and fixed offshore drilling or production facility for immediate cleanup of small oil spills. Each mobile drilling rig shall be equipped with a minimum of 1500 feet of oil containment boom, an oil skimming or recovery device that is capable of open ocean use, and an amount of absorbent material sufficient to remove 15 barrels of spilled oil. In addition, a boat that is capable of deploying this equipment shall be maintained onsite or available to the rig within 15 minutes. The equipment and material required on each fixed offshore drilling or production facility shall be determined and approved by the staff on an individual basis considering the type of structure, location, current activity, oil production capability, method of well production and other factors peculiar to the facility.
Equipment for the control and removal of larger oil spills shall be maintained at an offshore or onshore location near the area of lease operations where deployment and response to the spill would provide the most feasible protection of coastal resources. All equipment shall be inspected regularly and shall be maintained in good condition for immediate use.
(c) The lessee shall conduct training classes and periodic drills in the deployment and use of pollution control and removal equipment, to ensure that designated personnel can carry out the assignments which are necessary for effective control and removal of oil spilled in or on the ocean.
(d) The lessee shall maintain an inventory of the emergency equipment that is stored on each mobile drilling rig and offshore drilling or production facility as well as an inventory showing the description, application, and location of all pollution control and removal equipment that is immediately available for a major oil spill. In addition, the lessee shall maintain a listing of equipment, material, services, and labor forces that are immediately available for beach cleanup and restoration operations. The inventories shall be updated as changes occur and current copies shall be filed with the Staff annually.
(e) All mobile drilling rigs and offshore drilling or production facilities shall be equipped in a manner that will prevent spilling of contaminants in the ocean. Any fluids spilled shall be collected in a sump(s) that is provided with appropriate pumping equipment, liquid level controls, and alarms to prevent accidental discharge of contaminants into the ocean waters.
Note: Authority cited: Sections 6103, 6108, 6216, 6301 and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2141. Critical Operations and Curtailment Plans.
The primary purpose of a Critical Operations and Curtailment Plan is to provide additional precautionary measures to minimize the likelihood of an oil spill incident occurring from offshore drilling and production well work during (1) adverse weather and sea conditions when oil spill containment and recovery equipment, material and techniques are not effective and marine transportation is severely hampered; and (2) the time that oil spill containment and recovery equipment, material, manpower, and transportation thereof are not readily available to the site of operation.
Certain operations performed in drilling and production well work are more critical than others with respect to well control and accidental discharge of oil and gas. This is particularly so when subsurface forations are exposed in the well that are capable of flowing oil and gas to the surface or when the well has been pressured by outside means. It is these critical operations that should be ceased, limited or not commenced in order to minimize the likelihood of an oil spill occurring during adverse weather and sea conditions which could seriously impede both well control and oil cleanup efforts.
The lessee shall file with the Staff, for its approval, a Critical Operations and Curtailment Plan to be followed while conducting drilling and/or production well work on the lease. A plan shall be filed for each exploratory well as required in Section 2128(d)(2) in order to accommodate different drilling rigs, circumstances and conditions. A separate plan shall be filed for development drilling and production well work on the lease. These plans shall contain the following:
(a) A descriptive list of the critical drilling and production well work that is likely to be conducted on the lease, such as:
(1) Drilling in close proximity to another well.
(2) Drilling into a known lost circulation zone or into a zone capable of flowing oil and/or gas.
(3) Continuation of drilling into zones that are suspected to be capable of flowing oil and/or gas or into zones suspected to be abnormally pressured.
(4) If zones capable of flowing oil and/or gas are exposed or suspected to be exposed in the well then the following are considered to be critical operations:
(A) Pulling out of the hole.
(B) Fishing operations.
(C) Drill-Stem testing.
(D) Wireline logging in open hole.
(E) Running casing.
(F) Cutting and recovering casing.
(G) Perforating casing.
(H) Well completion work.
(I) Remedial well work.
(J) Well stimulation.
(b) A descriptive list of circumstances or conditions under which the critical drilling and production well work shall be ceased, limited, or not commenced. This list shall be developed from all the factors and conditions relating to the lease and shall take into account but may not to be limited to the following:
(1) Whether or not well operations are being conducted from a mobile rig or a fixed structure.
(2) Adverse meteorological or oceanographical conditions exist or are anticipated soon.
(3) Limited availability and capability of oil containment and cleanup equipment.
(4) Significant increase in oil spill control system response time for any reason.
(5) Personnel or equipment for conducting a particular critical operation are not available.
(6) Insufficient supply of drilling mud materials on the drill site for emergency well control purposes.
(7) Transportation equipment for personnel, supplies and oil spill containment and cleanup equipment is not readily available.
(8) Construction and maintenance work involving welding, moving heavy equipment, etc. is being performed.
(9) Other factors peculiar to the particular lease under consideration.
(c) When any circumstance or condition listed or described in the plan occurs or other operational limits are encountered, the lessee shall cease, limit, or not commence the affected critical operation(s) as set forth in Section 2141(a).
(d) Any deviation from the approved plan shall require prior written approval by the Staff. If emergency action requires deviation from the plan, and there is inadequate time to seek the Staff's approval, the Staff shall be notified immediately after said deviation occurs.
(e) The plan shall be reviewed at least annually and any changes thereto shall be submitted to the Staff for approval.
s 2142. Pollution Reports.
(a) All spills or leakage of oil and liquid pollutants originating from operations on State oil and gas leases shall be reported orally without delay to the United States Coast Guard and to the State Office of Emergency Services in Sacramento. Subsequent to oral notification, a written report shall be filed with the State Lands Commission, stating the source, cause, size of spill and the action taken.
(b) Lessees shall report orally to the three authorities indicated in Section 2142(a) any pollution of unknown source or pollution unassociated with lease operations that is observed on or in State waters.
(c) Lessees shall notify one another of information regarding equipment malfunction or of information regarding pollution resulting from another's operation.
Note: Authority cited: Sections 6103, 6108, 6216, 6301 and 6873(d), Public Resources Code; and Section 11152, Government Code. Reference: Sections 6005, 6216, 6301, 6871, 6871.1, 6873(d), Public Resources Code.
s 2150. Purpose.
Whenever the Commission determines that it is in the best interests of the State to take its royalty share of oil, gas, or other hydrocarbons in kind, the Commission shall enter into agreements for the disposition and sale of such oil, gas, or other hydrocarbons in accordance with procedures set forth in this Article.
Note: Authority cited: Sections 6108 and 6815.1, Public Resources Code.
s 2151. Definitions.
As used in this article unless otherwise specified:
(a) The term "royalty oil" includes oil, gas, natural gasoline, other products extracted from gas, and all other hydrocarbons.
(b) The term "purchaser" means any person or corporation that has entered into a contract to purchase royalty oil from the State.
(c) The term "lease" means oil and gas lease, easement, or other agreement for the extraction of oil, gas, or other hydrocarbons from lands owned by the State.
(d) The term "lessee" means holder of a lease.
(e) The term "base price" means, in relation to royalty oil, a price to be determined in accordance with a standard to be adopted by the Commission for each contract to purchase royalty oil and to be included in each such contract when it is adopted pursuant to Section 2153. The standard to be adopted shall relate, to the extent practical, to objective criteria and to data easily ascertainable, such as posted prices or prices paid for products of like quality, taking into account location, so that both the State and a purchaser will be able to establish the base price with reasonable ease and accuracy. Prices paid under any contract to purchase royalty oil pursuant to these rules and regulations shall not, under any circumstances, be used in determining such base price.
s 2152. Eligibility to Hold Sales Contracts.
A sales contract for royalty oil shall be issued only to and held by:
(a) Persons or associations of persons who are citizens of the United States or who have declared their intention of becoming such, or who are citizens of any country, dependency, colony, or province, the laws, customs, and regulations of which permit the grant of similar or like privileges to citizens of the United States.
(b) Any corporation or corporations organized and existing under and by virtue of the laws of the United States or of any state or territory thereof; or any corporation or corporations 90 per cent or more of the shares of which are owned by persons eligible to hold a lease or permit under subdivision (a) or (c) of this section; or any corporation or corporations 90 per cent or more of the shares of which are owned either by a corporation eligible to hold a lease or permit hereunder, or by any combination of such eligible persons or corporations, or both.
(c) Any alien person entitled thereto by virtue of any treaty between the United States and the nation or country of which the alien person is a citizen or subject.
s 2153. Selection of Royalty Oil.
The Commission shall, in advance, select the lease or leases from which royalty oil will be taken in kind and the particular hydrocarbons to be taken, determine the increments, if any, in which such oil will be sold, and adopt the bid-form, notice inviting bids, bid-proposal, and the sales contract. The proposal shall remain on file in the Commissions' Offices and shall contain the notice, bid-form, contract, copies of the lease or leases involved, and pertinent production and lease data.
s 2154. Bid Factor.
The Commission shall select for each sales contract, prior to offering royalty oil for bid, one of the bid factors listed below:
(a) $________ per barrel plus the base price.
(b) ________% plus 100% of the base price.
(c) $________ per barrel, provided that the purchaser shall at all times pay the bid price or the base price plus a specified percent of the base price as determined by the Commission, whichever is higher.
(d) $________ bonus plus the base price.
(e) $________ per barrel for a specified gravity with a gravity differential schedule as specified in advance by the Commission, provided that the purchaser shall at all times pay the bid price or the base price plus a specified percent of the base price as determined by the Commission, whichever is higher.
The Commission may, in offering a sales contract, require a minimum bid.
s 2155. Other Conditions.
Any sales contract issued under the provisions of this article shall contain such other covenants, conditions, requirements, and reservations as may be deemed advisable by the Commission to protect the interests of the State.
s 2156. Notice Inviting Bids.
Whenever the Commission elects to dispose of royalty oil by competitive public bid, the Commission shall cause notice of intention to receive bids to be published.
(a) The notice shall identify the lease from which the oil is to be offered, the proposed point of delivery, the time for receiving and opening bids, and indicate that forms for bidding may be obtained at an office of the Commission. Such notice shall be published at least once in a newspaper of general circulation in the county in which the point of delivery is situated, and may be published at least once in a newspaper of general circulation in the City of Los Angeles, or San Francisco, or Sacramento.
(b) At the time and place specified in the notice, not earlier than fourteen (14) days after the last date of publication the sealed bids shall be opened publicly and an award shall be made to the highest responsible bidder unless, in the opinion o the Commission, the acceptance of the highest qualified bid is not in the best interests of the State, in which event the Commission may reject all bids. Thereupon new bids may be called for or the Commission may refuse to call for new bids, or the Commission may negotiate and enter into agreements for sale under terms and conditions deemed to be in the best interests of the State. The Commission reserves the right at any time to reject any and all bids or to cancel the invitation to bid.
(c) At the time of the bid award, the Commission shall direct the Executive Officer or his agent to notify the lessee that the State intends to take royalty oil in kind commencing on the date specified in the sales contract.
s 2157. Submission of Bids.
Bids submitted pursuant to a published notice shall contain the following documents:
(a) Two copies of the bid-form completed, and executed. In the event of a joint bid, or a bid by a partnership, each bidder shall execute the bid-form. The insertion of any additional condition, qualification, or provision on said bid-form will invalidate the bid . In the case of joint bidding, or bidding by a partnership, bid data shall be submitted as required by Section 1913, and Section 1914, Title 2 of the California Administrative Code. Corporations executing a bid shall submit with the bid evidence of the authority of the officer or officers executing the bid on behalf of the corporation and shall affix the corporate seal upon the signature page of the bid-form.
(b) Each bidder must submit with his bid evidence of qualification to enter a contract as specified in this Section.
(c) Each bid submitted pursuant to this notice shall be accompanied by a certified or cashier's check or checks of a responsible bank in California and made payable to the State of California in an amount to be determined by the Commission before the offering as a deposit as evidence of the bidder's good faith.
(d) Each bidder shall submit with the bid a certified financial statement establishing to the satisfaction of the Commission such bidder's financial ability to undertake and fulfill all obligations under the prospective contract. Said financial statements shall be certified as to their truth and accuracy by each bidder, as a bidder, or by the person by whom or under whose direction the statements were prepared. Said financial statements shall be accurate as of the date of certification, which date shall be not earlier than the date the Notice of Intention herein was first published. Previously prepared financial statements and/or annual reports may be used by bidders provided that (a) such statements and/or reports are certified, as aforesaid, and (b) the bidder submits a certified statement by the bidder or a responsible financial officer of the bidder that there has been no material change in the financial or other condition of the bidder since the date of preparation of said statement and/or report that would impair the bidder's financial ability to undertake and fulfill all obligations of the bidder under the prospective contract. The certification of such financial statement must be signed by the individual or firm by whom the statement was prepared, as well as by the bidder.
(e) Each bidder shall submit with the bid evidence establishing to the satisfaction of the Commission such bidder's ability to take oil at the point of delivery. An agreement providing for the exchange of royalty oil for their oil or hydrocarbons may be submitted as evidence to establish bidder's ability to take royalty oil at the point of delivery.
(f) Each bidder shall also submit with the bid information concerning installation and maintenance of metering facilities, shipping pumps, pipelines, storage, loading facilities, or any other facilities that may be required to facilitate said royalty oil deliveries. The installation of any such facilities shall be only with the prior approval of the State.
(g) Each bidder shall nominate by letter of authority the name and address of a person authorized to give or receive any notice to or from the State Lands Commission with respect to such bidding and to receive refund of sums accompanying an unsuccessful bid. Said letter shall be submitted with the bid and shall be signed by the bidder, and in the case of joint bids shall be signed by each person or other entity joining in said bid. Unless otherwise expressly provided, the person so authorized to receive notice shall, in the case of the successful bidder, be deemed to be the person duly authorized to give and receive notices on behalf of the bidder.
s 2158. Term.
Sales contracts for the disposition of royalty oil shall be entered into for a term as determined y the Commission not to exceed five years.
s 2159. Delivery Adjustments.
Lessee may make deliveries of royalty oil to purchaser on a regular basis, and adjustments to deliveries, overages, or underages, including quality considerations, will be made up by the last day of the following calendar month.
s 2160. Delivery and Dehydration Costs.
The lessee, where so provided in the lease, shall be reimbursed for the actual allowable cost of dehydration of the royalty share of crude oil and, in the case of offshore leases, for the actual cost of delivery of the royalty share of crude oil to onshore storage and transportation facilities. Only those costs approved by the State in writing shall be allowed. The Commission shall select, prior to the bid offer, one of the methods listed below:
(a) The State shall reimburse the lessee monthly for such costs upon submission of an invoice by the lessee.
(b) The purchaser shall monthly, or as designated by the State, reimburse the lessee for such costs. Such costs may be deducted by the pur chaser from the amounts to be submitted to the State pursuant to the sales contract.
s 2161. Security.
Purchaser shall, at the time of the execution of the contract, furnish and thereafter maintain in favor of the State a good and sufficient bond or other such security in such sum as may be specified by the State Lands Commission, guaranteeing faithful performance by the purchaser of the terms, covenants, and conditions of the contract. Such bond or other such security will be used to indemnify the State for all costs and damages, including, but not limited to, damages caused by default of the purchaser of royalty oil. The cost of the bond or other security shall be paid for by the purchaser. The Commission may in its discretion reduce, eliminate, or reinstate the security requirement during the term of the sales contract.
s 2162. Disposition of Royalty Oil in the Event of Default.
In the event purchaser fails to take the royalty oil as provided by the contract, the Executive Officer or his designee is authorized to dispose of the royalty oil in the most expeditious manner possible. All cost incurred therein shall be deemed as a charge against the purchaser. Purchaser shall be responsible to the State for the difference, if any, between the amount of money received by the State in such disposition and the amount due the State pursuant to the sales contract.
s 2163. Assignment of Contract.
Any sales contract issued under the provisions of this article may be assigned, subject to approval by the Commission, to any person, association of persons, or corporation who, at the time of the proposed assignment, possesses the qualifications provided in this article. Any assignment shall take effect as of the first day of the month following the approval by the Commission and filing with the Commission of an executed counterpart thereof, together with any bond and proof of qualification of the assignee to take or hold such sales contract. Unless approved by the Commission, no assignment shall be of any effect. Such assignment shall be made upon the express condition that such assignment does not and shall not release or relieve the Assignor from any obligation to the State under the terms of said sales contract, and that the State may hold the Assignor liable for the faithful performance of any and all obligation of the Purchaser under said sales contract; and, further, that the Assignee shall be bound by the terms of said sales contract to the same extent as if such Assignee were the original Purchaser, any conditions in the assignment agreement to the contrary notwithstanding.
s 2170. General Provisions.
This Article 3.6 pertains to all exploration and production oil and gas facilities on tide and submerged lands under the jurisdiction of the State Lands Commission. For the purposes of this Article only, the term "marine facility" shall not include terminals used exclusively for transferring oil to or from vessels.
Note: Authority cited: Sections 6103, 6108, 6216, 6301, 6873, 8755, 8756, and 8758, Public Resources Code. Reference: Sections 6005, 6216, 6871, 6871.1, 6873, 8755, 8756 and 8758, Public Resources Code.
s 2171. Definitions.
(a) "Commission" means the California State Lands Commission.
(b) "Staff" means the Executive Officer or other duly authorized member of the staff of the State Lands Commission.
(c) "Oil" means any kind of petroleum, liquid, hydrocarbons, or petroleum products or any fraction or residues therefrom, including, but not limited to, crude oil, bunker fuel, gasoline, diesel fuel, aviation fuel, oil sludge, oil refuse, oil mixed with waste, and liquid distillates from unprocessed natural gas.
(d) "Spill" or "discharge" means any release or discharge of oil or other refuse of any kind from any well or facility into marine waters not authorized by any federal, state, or local government entity.
(e) "Marine waters" means those waters subject to tidal influence, except for waters in the Sacramento-San Joaquin Rivers and Delta upstream from a line running north and south through the point where Contra Costa, Sacramento, and Solano Counties meet.
Note: Authority cited: Sections 6103, 6108, 6216, 6301, 6873, 8755, 8756, and 8758, Public Resources Code. Reference: Sections 6005, 6216, 6871, 6871.1, 6873, 8755, 8756 and 8758, Public Resources Code.
s 2172. Administration.
The Staff shall administer this Article 3.6 and shall thereby seek to provide for the prevention and elimination of any contamination or pollution of the ocean and tidelands, and marine waters for the prevention of waste, for the conservation of natural resources, and for the protection of human health and safety, and the environment.
Note: Authority cited: Sections 6103, 6108, 6216, 6301, 6873, 8755, 8756, and 8758, Public Resources Code. Reference: Sections 6005, 6216, 6871, 6871.1, 6873, 8755, 8756 and 8758, Public Resources Code.
s 2173. General Requirements.
(a) Each operator of a marine facility shall prepare an operations manual describing equipment and procedures which the operator employs or will employ to protect the public health and safety and the environment and to prevent oil spills.
(b) The operation manual shall demonstrate compliance with all applicable marine facility operating rules and regulations of the State Lands Commission and the lease terms (if applicable).
(c) Copies of the manual shall be available and accessible to every employee at the field facility and at the next supervising level location. Two current approved copies shall be filed with the State Lands Commission Mineral Resources Management Division Staff.
Note: Authority cited: Sections 6108, 6216, 8755, and 8758, Public Resources Code. Reference: Sections 6108, 6216, 6873(b), 8755 and 8758, Public Resources Code.
s 2174. Manual Review.
(a) Submission of Manual.
(1) The operations manual for any existing facility shall be submitted to Staff for review and approval within one year of the effective date of these regulations.
(2) For any facilities not presently is existence, and operations manual shall be submitted to Staff for review and approval as part of the application for approval of the facility.
(3) Staff shall review and respond to the operator within 90 days after a complete application for review has been submitted and acknowledged.
(b) Updates and Changes to Approved Manual
(1) The operations manual shall be kept current at all times.
(2) Whenever any routine changes (administrative or clerical) is made in the operation, an update amendment reflecting that change shall be sent to Staff within 30 days.
(3) Any substantial changes to the manual or its content shall require prior approval by Staff. A substantial change is one which is non-routine, or which would increase or decrease the ability of the operator to respond to a spill, to provide for personnel safety, or to protect the environment.
(4) Subsequent reviews will be required as necessary when facility operations or technology changes, or when the Commission finds that the manual of any operator is no longer consistent with the provisions of this article or other rules, regulations, or guidelines of the Commission. Staff shall review and respond to the operator within 90 days after a complete application for review has been submitted and acknowledged.
(c) Denial
(1) Approval shall be denied if the Operations Manual does not comply with the conditions set forth in this article.
(2) If approval is denied, Staff shall notify the operator of the reasons for denial and provide an explanation of those actions necessary to secure approval.
(d) Appeal
(1) If Staff denies approval of the Operations Manual, the operator may appeal this decision by submission of a written appeal to the Commission. Any appeal must be submitted within 10 calendar days from the date the operator receives notice that approval of the manual has been denied. The request must contain the basis for the appeal and provide evidence which rebuts the basis for the Staff's denial of the manual.
(2) Upon receipt of an appeal, the Staff shall place the appeal on the calendar for the next Commission meeting taking place at least thirty (30) days after the appeal is received. The Commission may consider the appeal at that meeting or may delay consideration until a later meeting. Within 15 days after the Commission makes a decision on the appeal, the Staff shall send the operator written notice as to the Commission's decision.
(e) Proof of Approval
The operator shall keep the Letter of Approval filed in the front of the approved operations manual that is kept on the facility. The approval letter shall be presented upon request to any official representing the Commission or Administrator.
Note: Authority cited: Sections 6108, 6216, 8755, 8756, and 8758, Public Resources Code. Reference: Sections 6108, 6216, 6873(b), 8755 and 8758, Public Resources Code.
s 2175. Manual Content.
(a) The manual shall be arranged in a logical order and with clearly defined tabs for quick reference to emergency plans and procedures, a comprehensive table of contents and numbered pages.
(b) Each manual shall as a minimum include the following:
(1) Location: Appropriate maps, charts and geographic descriptions shall be included, indicating clearly the location of the facility and its relationship to nearby geographic features.
(2) Ownership and Responsibility: Information shall be included identifying the owner or owners of the facility and all those who may be responsible for the operation of the facility or for implementation of operation or contingency plans. Addresses and telephone numbers shall be included and kept current for each person or entity listed.
(3) Purpose: The manual shall include general explanations of the purposes of the facility and its various components.
(4) Personnel: A listing of operating staff positions shall be provided, showing the chain of command and the responsibility of each position. Employee qualifications for responsible positions must be outlined and staffing levels of the facility must be justified. On any facility which does not maintain 24- hour surveillance, justification and description of safety and security systems shall be discussed.
(5) Description of Operations:
(A) The manual shall include plot plans of the facility and flow diagrams for each of the production flow streams, including oil, gas, and water injection. Each major component and associated equipment including, but not limited to, wells, piping, process vessels, tanks compressors, pumps, and alarm, control and safety systems shall be narratively described, including function, capacity, physical size and pressure rating.
(B) Detailed information regarding preventives maintenance programs and procedures shall be provided.
(6) Personnel Safety: Detailed information shall be provided regarding equipment and procedures employed for the purpose of ensuring personnel safety, including, but not limited to, information concerning the following:
(A) Personnel safety;
(B) Safety responsibilities of each personnel position;
(C) Training;
(D) Safety Drills;
(E) Inspection of Personnel Safety Equipment; and
(F) Compliance with applicable provisions of Division 5 of the Labor Code and regulations adopted pursuant thereto.
(7) Systems Safety: Detailed information shall be provided regarding equipment and procedures employed for the purpose of preventing oil discharges or other accidents which may harm or threaten public health and safety or the environment, including, but not limited to, information concerning the following:
(A) Systems Safety Equipment;
(B) Systems Safety Training;
(C) All operations and procedures employed for the prevention of oil discharges or other pollution; and
(D) Inspection and testing of system safety equipment and operations.
(8) Automatic Control Systems and Equipment: Subsection (b)(7) shall include information concerning the identification, use and operation of any safety equipment that can be operated remotely, automatically, or by pre-program and any appropriate manual override information. The following information should be included:
(A) Normal process and operation;
(B) Safety shut-down; and
(C) Emergency shut-down
(9) Production Processing: All production streams must be identified, with the minimum following information included for each fluid:
(A) Chemical makeup;
(B) Fluid volumes;
(C) Pressures;
(D) Flow rates;
(E) Temperatures;
(F) Appearance;
(G) Odor;
(H) Instructions for safe emergency handling; and
(I) Any hazards which might be encountered in dealing with the fluid.
(10) Oil Spill Contingency and Hazardous Materials Plans: The manual shall include or have attached (or otherwise incorporate by reference) copies of the following:
(A) Any oil spill contingency plan required under the lease issued by the Commission or under Chapter 7.4 of Division 1 of Title 2 (ss 8670.1 et seq. ) of the Government Code; and
(B) For each fluid identified under subsection (b)(9) of this section, any business plan for responding to hazardous materials releases required under Chapter 6.95 of Division 20 of the Health and Safety Code.
(11) Fire Fighting Response: The manual shall also include information regarding response to fire, including at minimum the following:
(A) Information regarding primary response, including, but not limited to, detailed descriptions of response equipment and their use and operation, personnel, training, drills, communications equipment and procedures, and evacuation plans; and
(B) Information regarding secondary response, including, but not limited to, detailed descriptions of response equipment and their use and operation, use of mutual aid organization or cooperatives for fire suppression, interagency agreements or memoranda of understanding, and communications equipment and procedures.
(12) Other Emergency Response Plans.
(A) In addition to the plans set forth in subsections (b)(10) and (b)(11) of this section, any other emergency response plans shall also be included in or attached (or otherwise incorporate by reference) to the manual.
(B) Every plan submitted shall have included or attached the names and telephone and facsimile numbers of all relevant contact personnel with the facility operator, State and Federal response agencies, local fire, police, and medical responders, security personnel, and mutual aid cooperatives or organizations.
(C) Among the additional plans to be submitted shall be at minimum the following:
1. A Well Control Plan (Drilling and Workover);
2. A Critical Operations and Curtailment Plan (Drilling & Production, or substantial construction project);
3. An H 2 S Contingency Plan (if applicable);
4. A Facility Emergency Evacuation Plan;
5. Natural Disaster Response Plans; and
6. Security Plans
(13) Communication System: The manual shall describe in detail how communications systems employed at the facility provide for redundancy and interface with other area facilities, emergency responders, and agencies.
(14) Operational Support: The manual shall also include a description of normal and emergency operational support, including, but not limited to, the type and use of helicopters and vessels.
(A) Helicopters
(B) Boats & Vessels
(C) Other
(15) Other Information: The manual shall also include any other information necessary or appropriate for the Commission and for those work ing at the facility to know and understand the equipment, operations and systems employed at the facility both for ordinary operations, generally, and for the specific purpose of preventing harm to public health and safety or to the environment.
Note: Authority cited: Sections 6108, 6216, 8755, 8756, and 8758, Public Resources Code. Reference: Sections 6108, 6216, 6873(b), 8755 and 8758, Public Resources Code.
s 2200. Character and Extent of Lands.
(a) Lands subject to lease include:
(1) Those containing known deposits of minerals;
(2) Those embraced in a prospecting permit not subject to preferential lease.
(b) For tide and submerged lands and those underlying navigable streams and lakes the commission may determine the extent thereof subject to lease under any application. For all other lands the application shall be for a compact area and may include any number of acres not in excess of 160.
(c) The commission may include in its lease offer, areas adjacent to that for which application has been made, should it determine that such additional areas contain commercially valuable mineral deposits.
(d) Lands subject to prospecting permits are those not classified by the commission as containing commercially valuable mineral deposits.
s 2201. Duration of Leases and Permits.
(a) Leases (both preferential and bid) may be issued for a term of 20 years, with option of renewal for successive periods of 10 years upon such terms and conditions as may be prescribed by the commission at the time of renewal.
(b) Prospecting permits are limited to a period not exceeding two years, extendable for a period of an additional one year at the discretion of the commission.
s 2202. Prospecting Permit Procedures.
(a) Applications. Any person desiring to apply for a prospecting permit on any land under the jurisdiction of the commission, shall file with the State Lands Division, 100 Oceangate, Suite 300, Long Beach, California 90802, a written application containing:
(1) Name, address, and status of citizenship of applicant; if applicant is a corporation, the corporate name and name of president, secretary, and officer authorized to execute contracts and leases.
(2) A description of the state lands involved.
(3) A statement of the use proposed.
(4) A statement of the character and use of adjoining lands.
(5) A statement of the nature of the deposits proposed to be developed.
(b) If the applicant has posted a notice on the lands and recorded a copy thereof, as provided by Section 6892 of the Public Resources Code, the application shall so state, describing the monument erected on the lands, giving the location thereof, and stating the dates of posting and recording. The recorded copy of the notice shall be attached to the application.
(c) The application shall be accompanied by:
(1) a filing fee, as provided in Section 1903(a)
(2) a permit fee deposit equal to the amount of $1 per acre for each acre within the desired permit area.
(3) an expense deposit as provided in Section 1903.2.
(d) Upon the acceptance of an application, the commission shall determine the royalty rate to be paid under any ensuing preferential lease.
(e) Upon authorization by the commission, permit forms shall be submitted for the applicant's acknowledged or witnessed execution.
s 2203. Preferential Lease Procedures.
(a) At any time during the life of a permit, the permittee may apply for a preferential lease upon discovery of a commercially valuable deposit of minerals within the permit area.
(b) An application under this section shall contain, in addition to the data required in Section 2202(a), an affidavit of some responsible person having knowledge of the facts averring that a commercially valuable mineral deposit has been discovered within the permit area.
(c) No lease shall be issued for unsurveyed lands. Upon request of the applicant, accompanied by a deposit of an amount sufficient to cover the costs of a survey, surveying services will be rendered by the Division of State Lands.
(d) Upon determination by the Division of State Lands that a commercially valuable mineral deposit has been discovered and that the applicant is entitled to a preferential lease, the commission may, subject to the payment of the rental for the first year, authorize the execution and delivery of an appropriate lease.
s 2204. Procedures for Nonpreferential Leases.
Lands known to contain commercially valuable deposits of minerals not subject to a preferential lease under a prospecting permit, may be leased pursuant to a published notice of intention to receive bids. (See Section 1908). The minimum expense deposit required shall be determined by the Commission under the provisions of Section 1903.2.
s 2205. Statements and Reports.
On or before the fifteenth day of each month, a lessee or permittee shall deliver to the Division of State Lands statements in the form prescribed, showing the work performed upon the leased or permitted area and the amount, quality, and value of all minerals produced, shipped or sold during the preceding calendar month. Longer intervals for such reports may be authorized but such authorization shall be granted only in writing and may be revoked or changed at any time upon written notice to the lessee or permittee.
s 2249. Competitive Lease Sales.
Upon nomination, the Commission may designate State lands for lease by competitive bidding to the highest responsible qualified bidder. Such nominations may be made by holders of exploration permits or any other party qualified to hold a lease, pursuant to Public Resources Code Section 6801. Any State lands may be nominated and designated for competitive lease sale; provided that lands included within a valid and effective prospecting permit may be nominated and designated but may not be leased prior to the termination of that permit.
Note: Authority cited: Section 6108, Public Resources Code. Reference: Sections 6910 and 6911, Public Resources Code.
s 2250. Surface Owner Notification.
When a competitive bid has been held for lands described in subdivision (a) of Public Resources Code Section 6912, and the Commission has determined the highest qualified bid, the Commission shall notify the surface owner of such bid. The notice shall be deemed to be effective when received by the surface owner or five days after being sent, whichever occurs first. (continued)