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HomeMy WebLinkAboutC-10024-1 - Memorandum of Understanding (Regarding Methane Gas on Balboa Peninsula)Docusign Envelope ID: 3747EA8D-5621-4DDA-93D9-AAED44E14018 MEMORANDUM OF UNDERSTANDING BETWEEN THE CALIFORNIA DEPARTMENT OF CONSERVATION AND CITY OF NEWPORT BEACH PARTIES: This Memorandum of Understanding (MOU) is entered into by and between the California Department of Conservation (DOC) and the City of Newport (City). The initial primary contacts for the DOC and the City are: DEPARTMENT OF CONSERVATION LOCAL AUTHORITY Doug Ito City of Newport Beach State Oil and Gas Supervisor 100 Civic Center Drive California Geologic Energy Newport Beach CA 92660 Management Division c/o Pete Beskas, District Deputy Grace Leung, City Manager CaIGEM Southern District Telephone No: 714-920-1217 Telephone No: 949-644-3001 Email Address: Email Address: pete.beskas@conservation.ca.gov gleung@newportbeachca.gov. 2. PURPOSE: The City currently has an emergency declaration in place as a result of surface -level oil and methane gas detected the Balboa Peninsula at and around 3606 Marcus Avenue, Newport Beach, California (Property) beginning on or around August 2025. The cause is believed to be leakage from a buried abandoned well located either directly under or very near the Property (Incident). The California Department of Conservation — Geologic Energy Management Division (CaIGEM) is the state agency with oversight authority over oil, natural gas, and geothermal operations including overseeing the abandonment of orphan wells. The owners of the Property have requested that CaIGEM attempt to abandon Louis F. Dekay and Son Well number 2 API #: 04-059-05454-00 (the Docusign Envelope ID: 3747EA8D-5621-4DDA-93D9-AAED44E14018 Well) and the City is facilitating the process. The DOC has determined it to be a hazardous well. This Memorandum of Understanding (MOU) serves to coordinate the ongoing emergency response operation by CaIGEM to plug and abandon (P&A) the hazardous well. This MOU has been developed to ensure effective and expeditious efforts to abandon the Well, protect public health, safety, and the environment, and minimize the disturbance of the local population. This MOU does not create, enlarge, restrict, or otherwise modify the existing jurisdiction or powers vested in the parties. 3. LEGAL AUTHORITY: The California Department of Conservation (DOC) regulates and oversees the oil and gas industry in this state and has broad statutory authority to plug hazardous wells and to decommission idle or hazardous facilities. (Pub. Res. Code, §§ 3250 et seq.) 4. CITY RESPONSIBILITIES: 4.1 Emergency Response. The City shall coordinate with the California Office of Emergency Services (CaIOES) as needed for support with the overall incident management and act as the primary coordinator for the response for the purpose of CaIGEM completing its P&A. 4.2 Designation of Emergency Manager. The City Manager shall designate an Emergency Manager (EM) who will act as the chief point of contact for DOC's Response Team (RT) members and provide the name and contact information to DOC's RT Lead. 4.3 Public Messaging. The City will coordinate public messaging for the Incident, to include any messaging relating to the P&A project and work site specifically. DOC shall coordinate public messaging, as needed, through the City. It shall be the responsibility solely of the City to notify residents regarding the DOC's anticipated P&A work, the duration of the work, the work schedule, anticipated impacts on them, and the possibility of an evacuation based upon the information provided by DOC. 4.4 Public Safety of Impacted Residents. The City and DOC will coordinate to mitigate any public safety concerns to nearby residents as a result of the P&A operations. Nothing herein shall be construed or interpreted as either party being responsible for any fees, costs, or expenses arising even incidentally from relocation of impacted residents. Docusign Envelope ID: 3747EA8D-5621-4DDA-93D9-AAED44E14018 4.5 Provision of Work Site. DOC shall submit the necessary information for the City to issue an encroachment permit that identifies and provides an acceptable work site for staging of necessary P&A operations. It is currently anticipated that this location will be a public road. In the event that the work site is determined to be unsuitable, the Parties will work cooperatively to locate an acceptable alternate or additional site, as needed and in consultation with DOC. 4.6 Utility and Water Resources. The City will permit the DOC access to utilities and water resources, as needed, for completion of the P&A work. The City will provide DOC with information on the location and nature of underground infrastructure. If necessary, the City will assist DOC in coordinating for rerouting and reinstating overhead powerlines. 4.7 Traffic Management. The City shall notify impacted residents, local police, the sheriff, and local transportation agencies of anticipated street closures, detours, reduced parking availability, alternative transportation options, and other issues relating to traffic control and flow. 4.8 Permitting and Access Agreements. The City shall obtain any local permits required to complete the P&A work. The City shall also support DOC in obtaining necessary federal and state permits and access agreements and indemnification from impacted property owners. 5. DOC RESPONSIBILITIES: 5.1 Designation of Response Team Lead. DOC shall designate a RT Lead who shall act as the primary POC for the City Manager and EM during DOC's P&A operations. The RT Lead will assign other DOC staff at their discretion to the RT, and provide their contact information to the appropriate City officials. DOC will supply the City with a RACI Chart identifying key roles and points of contact. 5.2 Development of P&A Plan. The RT Lead, in consultation with the City, will develop a plan for the P&A of the Well prior to initiating work. 5.3 P&A Contract. The DOC may contract with a third -party to perform the required P&A work. Upon request, the DOC shall provide a copy of the P&A services contract to the City Manager or her representative. 3 Docusign Envelope ID: 3747EA8D-5621-4DDA-93D9-AAED44E14018 5.4 Equipment and Materials. The DOC and/or its contractor(s) shall secure appropriate equipment and sufficient raw materials to complete the P&A process. The City shall have no role in the actual P&A work process and shall not be required to pay for or fund any aspect of the foregoing work, except as specifically stated in this MOU. 5.5 Site Personnel. In addition to the RT, the DOC shall assign and/or procure adequate and appropriate personnel for the plug and abandon project. Personnel may also include contractors and subcontractors. The Project Manager and Site Safety Officer shall be onsite at all times while P&A operations are active. 5.6 Permits and Access Agreements. DOC shall be responsible for obtaining all necessary federal and state permits and any access and indemnification agreements with property owners who will be directly impacted by the P&A operations. 5.7 Completion of Work; Worksite Restoration. The DOC shall be responsible for ensuring that its staff and contractors have completed all required P&A work. This includes decommissioning, dismantling, and removing all hazardous oil production equipment, successful plugging of the well, and removal of all equipment and unused materials procured for the P&A project. It is currently anticipated that the P&A work site will require drilling through a public road. DOC will seek to minimize the impact and will backfill the excavation and restore the disturbed asphalt. 5.7.1 Partial or Failed P&A. DOC intends to invest substantial efforts and funds in locating, plugging, and re -abandoning the well which is currently believed to be the cause of the seepage. However, because the source, nature, and location of the seepage is not certain, DOC cannot guarantee the success of those efforts. DOC may, at its sole discretion, halt further efforts to P&A the well, or locate the source (or additional sources) of seepage. In the event that work is halted, DOC will remain responsible for decommissioning of the work site. 5.8 Further Remediation. DOC's role is limited to the P&A of the Well believed to be the source of observed seepage. Nothing in this MOU shall be construed as DOC assuming responsibility for the removal, remediation, or mitigation of the oil and methane gas seepage, or clean-up of any area outside of the worksite. 4 Docusign Envelope ID: 3747EA8D-5621-4DDA-93D9-AAED44E14018 5.9 State and Local Ordinances. The DOC will comply with all state laws, standards, and regulations while performing the P&A work, as applicable for hazardous well P&A under an emergency declaration. It shall also comply with local ordinances to the extent they are not in conflict with state law. Upon request, the City Manager, or her designee, will provide the DOC with information about local ordinances which may impact operations (e.g. noise ordinances, etc.). 6. EXECUTION, TERM, MODIFICATION, AND CONSTRUCTION: (1) This MOU may be executed in one or more counterparts. Each counterpart shall have the same force and effect as an original instrument. Taken together, the executed counterparts shall constitute one and the same instrument. (2) This MOU will become effective upon the date of the final signature of the parties. (3) This MOU shall continue in full force and effect unless modified, replaced, or terminated by operation of law or upon mutual agreement of the parties. (4) Any determination that a provision in this MOU is invalid does not invalidate any other provision of this MOU or the MOU in its entirety. (5) This MOU must be ratified or approved in accordance with applicable municipal and/or State codes. (6) If any legal action is brought by either Party to enforce the provisions of this MOU, neither Party shall be entitled to attorneys' fees. SIGNATURE PAGE FOLLOWS 5 Docusign Envelope ID: 3747EA8D-5621-4DDA-93D9-AAED44E14018 CALIFORNIA DEPARTMENT OF CONSERVATION DocuSigned by: Authorized Signature: On behalf of State Oil and Gas Supervisor, Doug Ito Printed Name: Pete Beskas Title: District Deputy - CaIGEM Date: 12/ 1 /2025 CITY OF NEWPORT BEACH Authorized Signature: Printed Name: g��ce Leung, City Manager City of Newport Beach Date: 12.,b L" ;'s APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: a aS By: 'tic, Iff- Aaron . Harp, C Attorney Attest: City Clel k III