1. California State Lands Commission Mineral Resources Management Division Long Beach Unit Safety & Environmental Audit Proposal June 23, 2011 Mineral Resources Management Division Long Beach Unit Safety & Environmental Audit Proposal June 23, 2011 Regular Item 136

2. California State Lands Commission—Mineral Resources Management Background  April 28 Commission Meeting  LBU Program Plan – insufficient details on:  Safety Programs  Environmental Protection Programs  Commission ordered City to revise Program Plan:  Include an Environmental and Safety Audit  Complete within 15 months  Directed staff to:  Return within 60 days, a detailed scope of the Audit  Scope to include identification and analysis of the Environmental and Safety Risks  Human Injury  Adverse Environmental Impact  Significant Property Damage  From Audit findings, provide recommendations to Program Plan  Identify funding w/ no impact on net revenue to General Fund

3. California State Lands Commission—Mineral Resources Management LBU Environmental & Safety Audit Overview  Environmental and Safety Audit Scope (Exhibit B)  Purpose of Audit  Description of Facilities to be Audited  Audit Activities – Description of Audit Categories  Audit Standards & Criteria to be Verified (Exhibit C)  Audit Duration  SLC Staff Resources  Estimated Cost of Audit  Funding Source  Impact / Recommendation

4. California State Lands Commission—Mineral Resources Management Island Grissom

5. California State Lands Commission—Mineral Resources Management Safety Audit Scope  Scope:  Equipment Function & Integrity  Field Inspection of all 4 Islands, and onshore facilities  Review Maintenance  Safety Systems testing  Environmental and Emergency Response elements  Electrical Audit by Contract Electrical Engineers  Technical Design Evaluation  Hazards Analysis reviewed  Administrative Review  Operations Manual & Operating Procedures  Oil Spill Contingency Plan  Other Emergency Response Plans  Conduct Human and Organizational Factors Assessment  Use SAMS tool - same 6 engineers  6 MRMD engineers for 15 months  City LB and OLBI to provide documentation and support, but don’t audit.

6. California State Lands Commission—Mineral Resources Management Safety Audit Cost / Funding  $1.25 mil. For MRMD staff & electrical contractor  The Oil Spill Prevention Administration Fund (OSPAF) funds the Safety Audit Program.  No impact to state general fund.  Costs do not include expenditures to correct audit findings.  Expenditures that may occur to correct audit findings may be Unit costs.

7. California State Lands Commission—Mineral Resources Management Current Agency and Jurisdictional Oversight  City of Long Beach Department of Oil Properties - Inspection and Monitoring Fire Dept. - Inspection of Fire Protection Systems & Equipment  Division of Oil, Gas, and Geothermal Resources (DOGGR)  Air Quality Management (AQMD) Permits Monitoring of Fugitive Emissions / Natural Gas  Regional Water Quality Control Board (RWQB) Permits  Fish & Game, Office of Spill Prevention & Response (OSPR)  State Lands On-site Surveillance and monitoring of operations

8. California State Lands Commission—Mineral Resources Management Delay caused by LBU Audit  Interrupted audit schedule for offshore platforms  Platform Holly in the Santa Barbara Channel currently scheduled this summer  All Platforms and facilities will be delayed by 15 months Effect of Long Beach Unit Audit on Current Schedule FacilityCompany Scheduled Start Delayed State Due to LBU Audit Platform HollyVenoco08/01/201111/01/2012 Rincon IslandGreka04/01/201207/01/2013 Rincon Onshore FacilityGreka04/01/201207/01/2013 Platform EmmyAera04/01/201309/01/2014 Huntington Beach StripAera04/01/201309/01/2014 Huntington Beach Onshore Facility Aera04/01/201309/01/2014 Platform EvaDCOR02/01/201405/01/2015 Platform EstherDCOR02/01/201405/01/2015 Fort Apache Onshore Facility DCOR02/01/201405/01/2015 McGrath/MontalvoVenoco02/01/201605/01/2017 Ellwood Onshore FacilityVenoco02/01/201605/01/2017

9. California State Lands Commission—Mineral Resources Management Recommendation  Platform Holly Audit to start August 2011  LBU Audit to start January 2012