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<ns0:Id>20250SB__125999INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-19</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Blakespear</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthor: Senator Gonzalez)</ns0:AuthorText>
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<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Blakespear</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
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<ns0:Name>Gonzalez</ns0:Name>
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<ns0:Title> An act to add Section 25371.5 to the Public Resources Code, and to add Section 13267.6 to the Water Code, relating to refineries. </ns0:Title>
<ns0:RelatingClause>refineries</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Refineries: decommissioning and remediation: cost estimates.</ns0:Subject>
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<html:p>Under existing law, the State Water Resources Control Board and the California regional water quality control boards prescribe waste discharge requirements in accordance with the Federal Water Pollution Control Act and the Porter-Cologne Water Quality Control Act.</html:p>
<html:p>Existing law requires the State Energy Resources Conservation and Development Commission to submit an assessment to the Governor and the Legislature that, among other things, identifies methods to ensure a reliable supply of affordable and safe transportation fuels in California.</html:p>
<html:p>This bill would require, on or before an unspecified date, the board, in consultation with specified entities, to develop guidelines for estimating the costs and timelines associated with decommissioning a refinery, as defined, and soil and groundwater remediation at
refinery sites. The bill would require, on or before an unspecified date, each refiner, as defined, with an operating refinery to submit a report, including an estimate of the refinery’s asset retirement obligations and a plan for meeting those obligations, to the board in accordance with those guidelines. The bill would require the commission to incorporate the information contained in the reports in its ongoing work to develop a comprehensive transportation fuels transition strategy. The bill would require the board to provide a copy of the report to the commission for that purpose.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
There has been widespread recognition, in the wake of multiple recent petroleum refinery closure announcements, of the need for the state to implement a suite of policies and programs to ensure environmental, public health, labor, economic, and consumer protections for a successfully managed transportation fuels transition.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Petroleum refineries in the state have been in operation for many decades, in some cases for over a century, commencing their operations in most cases long before the advent of modern environmental laws. For that reason, refinery sites tend to be heavily contaminated with hydrocarbons and
associated toxic chemicals that can pose a threat to public health both offsite and onsite, and require costly and prolonged efforts to clean up.
</html:p>
<html:p>
(c)
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Sea level rise associated with climate change will cause groundwater levels to rise and increase flooding, especially in coastal areas. Most refineries in the state are near the ocean or connected waters due to their logistical shipping needs and substantial operational consumption of water. Contamination at refinery sites is of particular concern because the rising groundwater levels will cause subsurface contaminants to migrate, increasing the risk of negative health impacts from vapor intrusion through sewers or other pathways into buildings across a larger area.
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<html:p>
(d)
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Explicit requirements exist in other energy sectors to develop, disclose, and plan for closure obligations to prevent the cost of such obligations from being shifted
onto taxpayers. These requirements are in place for oil and gas extraction wells, nuclear energy facilities, and wind and solar facilities, for example. However, there are not explicit requirements associated with refinery closures.
</html:p>
<html:p>
(e)
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The state has a strong interest in obtaining a full understanding of safe decommissioning and postclosure site remediation needs to protect against the potential cost to taxpayers, as well as negative impacts on the state’s budget, economy, or public health should the activities not be completed in a timely or adequate manner by refinery operators.
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(f)
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Communities that are economically dependent upon refineries similarly need access to information concerning the anticipated duration and methods of safe decommissioning and remediation in order to make necessary plans for potential site redevelopment. Having that information well in advance of a
closure announcement enables refinery communities to engage in more effective long-term planning.
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<html:p>
(g)
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Long-term planning, remediation, and redevelopment for the sites of former refineries represents a significant challenge, but doing so may be an opportunity to support the creation of high-road jobs and new avenues of economic development.
</html:p>
<html:p>
(h)
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While refiners who are publicly traded corporations are required to report their asset retirement obligations to the United States Securities and Exchange Commission in quarterly and annual reports, applicable accounting principles have been interpreted to allow refiners to delay presenting a cost estimate for those obligations until a firm retirement date is announced. Even when refinery asset retirement obligation values are eventually reported to the commission, the calculation of those obligations does not necessarily include the costs
of site remediation.
</html:p>
<html:p>
(i)
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A June 27, 2025, letter from State Energy Resources Conservation and Development Commission vice chair Siva Gunda to Governor Gavin Newsom recognized the value to “identify challenges, opportunities, and strategies for the future of land affected by the transition (e.g. remediation, marketability, and value), such as Asset Retirement Obligations and standards for refinery remediation and decommissioning plans.”
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<html:p>
(j)
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Senate Bill 237 (Chapter 118 of the Statutes of 2025) of the 2025–26 Regular Session directed the commission to submit an assessment to the Legislature and Governor this year that, in part, “evaluates the recommendations and strategies put forward by” that same June 27, 2025, letter.
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(k)
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It is the intent of the Legislature to enact legislation that adequately protects confidential
business information and other sensitive data while providing the state with a sufficient understanding of the costs and obligations associated with refinery closures to enable it to respond effectively to possible challenges arising from the broader worldwide fossil fuel transition.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 25371.5 is added to the
<ns0:DocName>Public Resources Code</ns0:DocName>
, to read:
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<ns0:Num>25371.5.</ns0:Num>
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<html:p>The commission shall incorporate the information contained in the reports prepared pursuant to Section 13267.6 of the Water Code in its ongoing work to develop a comprehensive transportation fuels transition strategy.</html:p>
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<ns0:Num>SEC. 3.</ns0:Num>
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Section 13267.6 is added to the
<ns0:DocName>Water Code</ns0:DocName>
, to read:
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<ns0:Num>13267.6.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions shall apply:
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<html:p>
(1)
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“Refiner” has the same meaning as in Section 25127 of the Public Resources Code, and additionally includes persons who formerly owned, operated, or controlled the operations of one or more refineries that processed crude oil feedstocks, but now process renewable feedstocks and otherwise meet that definition.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Refinery” has the same meaning as in Section 25128 of the Public Resources Code, and additionally includes facilities that formerly processed crude oil feedstocks, but now process renewable feedstocks and otherwise meet that definition.
</html:p>
<html:p>
(b)
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(1)
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On or before ____, the board, in consultation with the Department of Toxic Substances Control, as well as any regional water boards or certified unified program agencies with experience in refinery site remediation, shall develop guidelines for estimating the costs and timelines associated with refinery decommissioning and soil and groundwater remediation at refinery sites.
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<html:p>
(2)
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The guidelines developed pursuant to paragraph (1) shall consider, but need not be limited to, ranges of potential closure dates, levels of remediation, cleanup technologies, and cost estimates.
</html:p>
<html:p>
(3)
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The board shall provide a copy of each report received pursuant to paragraph (1) to the State Energy Resources Conservation and Development Commission for purposes of Section 25371.5 of the Public Resources Code.
</html:p>
<html:p>
(c)
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On or before ____, each refiner with an operating refinery shall submit a report, including an estimate of the refinery’s asset retirement obligations and a plan for meeting those obligations, to the board in accordance with the guidelines developed pursuant to subdivision (b).
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