California Code of Regulations
Title 14 - Natural Resources
Division 2 - Department of Conservation
Chapter 4 - Development, Regulation, and Conservation of Oil and Gas Resources
Subchapter 1 - Onshore Well Regulations
Article 5 - Requirements for Underground Gas Storage Projects
Section 1726.3 - Risk Management Plans

Universal Citation: 14 CA Code of Regs 1726.3

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) For each underground gas storage project, the operator shall submit a project-specific Risk Management Plan to the Division for review and approval. For underground gas storage projects in existence at the time that this section goes into effect, the operator shall submit a Risk Management Plan in accordance with the requirements of this section within six months of the effective date of this section. If the Division identifies any deficiencies in the Risk Management Plan, then the Division will consult with the operator and identify an appropriate timeframe for correcting the deficiency. The Risk Management Plan shall specify a schedule for the operator to review and submit updates to the risk assessment and prevention and mitigation protocols to the Division. The Division will review the Risk Management Plan periodically, but not less than once every three years.

(b) The Risk Management Plan shall demonstrate that stored gas will be confined to the approved reservoir and that risks of damage to life, health, property, the environment, or natural resources are identified and prevented or effectively mitigated. In accordance with subdivision (c), the Risk Management Plan shall evaluate threats and hazards associated with operation of the underground gas storage project and identify prevention and mitigation protocols that effectively address those threats and hazards. The Division may, in its discretion, require additional data, additional risk assessment, or modification of prevention and mitigation protocols. Risk assessment and prevention and mitigation protocols in the Risk Management Plan shall be consistent with and in addition to any other existing requirements.

(c) The Risk Management Plan shall include a description of the methodology employed to conduct the risk assessment and identify prevention and mitigation protocols, with references to any third-party guidance followed in developing the methodology. The methodology shall include at least the following:

(1) Identification of potential threats and hazards associated with operation of the underground gas storage project, including identification of the most important potential accident scenarios associated with operation of the underground gas storage project;

(2) Quantitative risk assessment of the probability of threats and hazards and their consequences, using an appropriate methodology identified by the operator that includes:
(A) Evaluation of the frequency and range of consequences, including estimates of the uncertainties in the numerical values;

(B) Identification of the principal equipment failures, external initiating events, and operational errors associated with threats and hazards, and quantification of the impact of these occurrences on the probability of and consequences of the threats and hazards; and

(C) Identification of the engineered or natural features that most affect the extent of the consequences of threats and hazards, and a quantification of their relative roles, including an estimate of the uncertainties in the quantification;

(3) Identification of possible prevention and mitigation protocols to reduce, manage, or monitor risks, including evaluation of the efficacy and cost-effectiveness of the prevention protocols;

(4) Risk assessment on a well-by-well basis, to the extent that risks identified are specific to wells;

(5) Prioritization of risk prevention and mitigation efforts based on potential severity and estimated likelihood of occurrence of each threat;

(6) Selection and implementation of prevention and mitigation protocols;

(7) Documentation of the risk assessment process, including description of the basis for selection of prevention and mitigation protocols;

(8) Data feedback and validation throughout the risk assessment process; and

(9) Regular, periodic risk assessment reviews to update information and evaluate the effectiveness of prevention and mitigation protocols employed, which shall occur not less than once every three years and in response to changed conditions or new information.

(d) In addition to the contents required in subdivision (b), all Risk Management Plans shall include at least the following risk assessment and prevention and mitigation protocols:

(1) Well construction and design standards, consistent with the requirements of Section 1726.5 and including specification of the life expectancy of individual mechanical well barrier elements. If the operator has wells that do not conform with the requirements of Section 1726.5, then the Risk Management Plan shall include a work plan and schedule for either bringing the nonconforming wells into compliance or plugging and abandoning the wells in accordance with Public Resources Code section 3208. The work plan and schedule shall provide for full compliance with Section 1726.5 within seven years, with at least 10 percent of the nonconforming wells addressed in the first year and the total percentage of the nonconforming wells addressed increasing by 15 percent in each subsequent year. The work plan shall include prevention and mitigation protocols for monitoring and testing each well that is not yet in compliance with the requirements of Section 1726.5 so as to mitigate risks associated with the well to the extent feasible.

(2) For each gas storage well, evaluation of whether employment of surface and/or subsurface automatic or remote-actuated safety valves is appropriate based on consideration of at least the following:
(A) The well's distance from dwellings, other buildings intended for human occupancy, or other well-defined outside areas where people may assemble such as campgrounds, recreational areas, or playgrounds;

(B) Gas composition, operational pressures, total fluid flow, and maximum flow potential;

(C) The distance between wellheads or between a wellhead and other facilities, and access availability for drilling and service rigs and emergency services;

(D) The risks created by installation and servicing requirements of safety valves;

(E) The risks to and from the well related to roadways, rights of way, railways, airports, and industrial facilities;

(F) Proximity to environmentally or culturally sensitive areas;

(G) Alternative protection measures which could be afforded by barricades or distance or other measures;

(H) Age of well;

(I) The risks of sabotage;

(J) The current and predicted development of the surrounding area as reflected in the local general plan, topography and regional drainage systems, and environmental considerations;

(K) Topography and local wind patterns; and

(L) Evaluation of geologic hazards such as seismicity, landslides, subsidence, and potential for tsunamis.

(3) A schedule for verification and demonstration of the mechanical integrity of each well used in the underground gas storage project and each well that intersects the reservoir used for gas storage. The mechanical integrity testing protocols for gas storage wells shall, at a minimum, adhere to the requirements of Section 1726.6.

(4) Corrosion monitoring, evaluation, and mitigation including consideration of at least the following:
(A) Evaluation of tubular integrity and identification of defects caused by corrosion or other chemical or mechanical damage;

(B) Corrosion potential of wellbore produced fluids and solids, including the impact of operating pressures, temperatures, and compositions on the corrosion potential of wellbore fluids and analysis of partial pressures;

(C) Corrosion potential of annular and packer fluid;

(D) Corrosion potential of current flows associated with cathodic protection systems;

(E) Corrosion potential of all formation fluids, including fluids in formations above the storage zone; and

(F) Corrosion potential of uncemented casing.

(5) Ongoing monitoring of casing pressure changes at the wellheads of gas storage wells, analysis of facility flow erosion, individual facility component capacity and fluid disposal capability at intended gas and liquid flow rates and pressures, and analysis of the specific impacts that the intended operating pressure and temperature ranges could have on the corrosive potential of fluids in the system.

(6) Monitoring protocols in accordance with the requirements of Section 1726.7.

(7) Ongoing verification and demonstration of the integrity of the reservoir including demonstration that reservoir integrity will not be adversely impacted by operating conditions.

(8) Analysis and risk assessment of hazards associated with the formation of hydrates, and scale from the well stream under various pressure, temperature, and flow rates, including those beyond expected operating parameters.

(9) Analysis and risk assessment of natural and geologic hazards including, but not limited to, seismicity, faults, subsidence, inundation by tsunamis, sea level rise, and floods.

(10) Analysis and risk assessment of hazards associated with the potential for explosion or fire.

(11) If observation wells are employed, identification and documentation of baseline conditions such as wellbore pressure, pressure of monitored annuli, gas composition and liquid level.

(12) An assessment of human factors in operating and maintenance procedures. The human factors assessment shall consider staffing levels; the complexity of tasks; the length of time needed to complete tasks; the level of training, experience and expertise of employees; the human-machine and human-system interface; the physical challenges of the work environment in which the task is performed; employee fatigue and other effects of shiftwork and overtime; communication systems; and the understandability and clarity of operating and maintenance procedures. The human factors assessment shall also consider utilization of error-proof mechanisms, automatic alerts, and automatic system shutdowns.

(13) An effective training program with clearly stated goals. The training program shall specify the type and frequency of training and the risk assessments and prevention and mitigation protocols addressed.

(14) An equipment maintenance program that includes training and proactive inspection, repair, and replacement of equipment at risk of failure so as to ensure safe operation.

(15) An emergency response plan that at a minimum accounts for the threats and hazards identified in the Risk Management Plan and that complies with the requirements of Section 1726.3.1.

(16) Requests for notice from land use agencies of local land use decisions that could affect the Risk Management Plan, and providing notification to the Division of significant pending land use decisions.

(e) The operator shall adhere to the risk prevention and mitigation protocols detailed in its Risk Management Plan unless a variance has been approved by the Division in writing.

(f) The Division will provide completed Risk Management Plans and significant updates to the Risk Management Plans to the California Public Utilities Commission and post them on the Division's public internet website. If any part of a Risk Management Plan is subject to confidential treatment, then the Division will segregate the confidential records and only provide them if the California Public Utilities Commission has agreed to treat the records as confidential.

1. New section filed 6-28-2018; operative 10-1-2018 (Register 2018, No. 26).

Note: Authority cited: Sections 3013, 3106 and 3180, Public Resources Code. Reference: Sections 3106, 3180, 3181, 3220 and 3403.5, Public Resources Code.

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