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 2 - Environmental Protection
Article 1 - General
Section 1753.2.1 - Production Facility Decommissioning Cost Estimate Method 1
Universal Citation: 14 CA Code of Regs 1753.2.1
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Production Facility Decommissioning Cost Estimates calculated by operators using Method 1 shall be calculated by summing the Base Facility Decommissioning Cost from subdivision (a)(2), the Cost of Other Project Components from subdivision (a)(3), and the Contingency Cost from subdivision (a)(5) and the Production Facility Decommissioning Cost Estimate shall specify all the following information for each of the operator's production facilities:
(1) The Lease and Field. The name of the lease and field where the production facility is located.
(2) The Base Facility Decommissioning Cost. The Base Facility Decommissioning Cost shall be calculated by identifying the Production Facility Type from the Production Facility Decommissioning Unit Costs Table in subdivision (a)(2)(A) and multiplying by the associated Unit Cost.
(A) Production Facility Decommissioning Unit Costs Table.
| Production Facility Type | Unit Cost |
| Per tank (>10,001 bbl) | $186,723 |
| Per tank (5,001-10,000 bbl) | $127,510 |
| Per tank (2,500-5,000 bbl) | $76,313 |
| Per tank (<2,499 bbl) | $22,961 |
| Per vessel, including each separator, heater-treater, free-water knockout, boiler, and steam-generator | $14,382 |
| Per linear foot of above-ground pipelines | $26 |
| Per linear foot of buried pipelines | $9 |
| Per short ton of electrical vaults and equipment | $450 |
| Per cubic foot of asphalt and concrete | $12 |
| Per pump or pumping unit | $5,149 |
| Per compressor | $5,149 |
| Per square foot of buildings on site | $33 |
(3) The Cost of Other Project Components. The Cost of Other Project Components shall be calculated by summing the costs of Permitting and Regulatory Compliance, Mobilization and Demobilization, and Project Management and Engineering.
(A) Permitting and Regulatory Compliance. The cost of Permitting and Regulatory Compliance shall be determined by multiplying the Base Facility Decommissioning Cost from subdivision (a)(2) by five percent.
(B) Mobilization and Demobilization. The cost of Mobilization and Demobilization shall be calculated by multiplying the Base Facility Decommissioning Cost from subdivision (a)(2) by five percent.
(C) Project Management and Engineering. The cost of Project Management and Engineering shall be calculated by multiplying the Base Facility Decommissioning Cost from subdivision (a)(2) by eight percent.
(4) The Production Facility Decommissioning Aggregated Risk Score. The Production Facility Decommissioning Aggregated Risk Score for each production facility shall be determined by identifying the characteristics of the production facility, points assigned to those characteristics, as listed in Production Facility Decommissioning Aggregated Risk Score Table in subdivision (a)(4)(A), and summing all of the applicable points for the production facility.
(A) Production Facility Decommissioning Aggregated Risk Score Table.
| Characteristics | Points |
| The production facility is environmentally sensitive or is located in a sensitive area or urban area, as defined in Section 1760 | 10 |
| There has been a reportable spill or leak at the production facility | 10 |
| The production facility is located on land that has or had a freshwater aquifer underneath | 5 |
| The production facility is located in an area of known geologic hazards including subsidence, landslides, or seismicity | 5 |
| There are surface obstacles or other impediments preventing access to the production facility, including but not limited to buildings or structures, surface-use activities, irrigation systems, roads, terrain, or restricted access | 5 |
| The production facility is greater than 50 years old | 5 |
| There is an unresolved notice of violation at the production facility | 5 |
| Any other conditions about the production facility that indicate it could potentially pose a threat to life, health, property, or natural resources | 10 |
| Maximum Potential Aggregated Risk Score | 55 |
(5) The Contingency Cost. The Contingency Cost shall be calculated by multiplying the Base Facility Decommissioning Cost from subdivision (a)(2) by the Contingency Percentage.
(A) Operators may group production facilities and determine the Contingency Cost by multiplying the total Base Facility Decommissioning Cost under subdivision (a)(2) for all the production facilities in the group by the appropriate Contingency Percentage. When operators group production facilities in this way, when determining the Production Facility Decommissioning Aggregated Risk Score under subdivision (a)(4), any characteristic that is identified for a production facility in that group, must be applied to the entire group.
(B) The Contingency Percentage shall be determined based upon the Production Facility Decommissioning Aggregated Risk score calculated under subdivision (a)(4) as follows:
(i) The Contingency Percentage shall be 10% if the Production Facility Decommissioning Aggregated Risk Score is less than 10 points.
(ii) The Contingency Percentage shall be 20% if the Production Facility Decommissioning Aggregated Risk Score is between 10 and 19 points.
(iii) The Contingency Percentage shall be 30% if the Production Facility Decommissioning Aggregated Risk Score is 20 points or greater.
Note: Authority cited: Sections 3013 and 3205.7, Public Resources Code. Reference: Sections 3011, 3106 and 3205.7, Public Resources Code.
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