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Increased Gas Storage Withdrawal Key to Lower Power Outage Risks, CPUC Report Says

If limitations can be removed at California's now-closed largest natural gas storage facility, an increase in withdrawal capacity could lower, if not eliminate, the risk of gas curtailments leading to rolling power outages during peak demand days this summer, according to a state-mandated report released on Wednesday.

However, ongoing testing and clearance of each storage well at the Southern California Gas Co. (SoCalGas) Aliso Canyon storage field and limitations on withdrawal methods since the four-month-long leak of a well at the facility (see Daily GPIFeb. 18) have combined to cast doubt on whether the gas curtailments and rolling blackouts can be avoided. To date, only nine wells have been completely tested, remediated and inspected, and only four of those have been cleared for use.

At the 3,600-acre, 86 Bcf capacity underground storage field, which once operated with 114 storage wells, a minimum of 36 wells would be required to provide enough withdrawal capacity to avoid shortages of gas and power. This is one of the conclusions under the two most likely of four scenarios examined by the staff of the California Public Utilities Commission (CPUC) in the legislative (SB 380)-mandated report examining Aliso's working gas inventory, production capacity, injection capacity and well availability for this summer.

Generally the withdrawal capacity of an underground storage field is determined by a combination of the volumes of gas in storage and the number of storage wells available for withdrawal, the CPUC report said. Given the continuing prohibition against injecting any new supplies into Aliso, storage volumes cannot be manipulated to lower the risks of future curtailments.

Currently there 15 Bcf of natural gas stored in Aliso, and SoCalGas cannot inject more gas into the field until it has complied with multiple provisions of SB 380, the report says, offering statistics that show the compliance work is ongoing but slow. "As part of its comprehensive safety review, SoCalGas has sealed and isolated from the rest of the field many wells," the CPUC report said.

As of June 20, only four fully tested, remediated and inspected wells were available for gas withdrawal, according to the CPUC staff, with an added 17 wells having completed the first of three phases of tests. "[Those] can be available for withdrawal if needed for reliability."

Among the remaining wells, five had been completed in all three phases of the safety review as determined by the state Division of Oil, Gas and Geothermal Resources and approved, but they are still not operational, and 23 others were still in the process of undergoing comprehensive inspection review.

"The analysis indicates that the current combination of gas stored in the field and wells available for gas withdrawal leaves SoCalGas with an Aliso Canyon withdrawal capacity of approximately 300 MMcf/d, which is below the identified target of 420 MMcf/d needed to meet Scenarios 2 and 3 in the risk assessment."

As a result, the CPUC has ordered the Sempra Energy gas-only utility to file a plan on Friday (July 1) for getting to the 420 MMcf/d withdrawal capacity capability.

Of the four scenarios in the risk report, No. 1 would avoid up to 11 days of curtailment from a 150 MMcf/d shortfall in supplies-vs.-demand by shifting electric generation out of the Los Angeles Basin; No. 2 would have an added non-Aliso storage outage of 400 MMcf/d, requiring 252 MMcf/d to be withdrawn from Aliso; No. 3 would have a 500 MMcf/d pipeline outage, forcing the need for 420 MMcf/d withdrawal from Aliso to avoid curtailments; and No. 4 -- the least likely to occur -- involving an overall 900 MMcf/d outage in system supply capacity would require 1.1 Bcf/d withdrawals from Aliso.

Regarding the latter, the CPUC reported that the current Aliso volumes in storage (15 Bcf) would be "insufficient to support" withdrawal of 1.1 Bcf/d.

Adding to the conundrum is the fact that available withdrawal capacity varies widely at Aliso because of operating restrictions imposed in the wake of the massive storage well leak from late last October through mid-February this year. These restrictions will result in estimated withdrawal capacity in each operable Aliso Canyon well being 40% to 80% below their past capabilities, according to the CPUC report.

Using the conservative 40% lower per-well withdrawal capacity, the CPUC staff report concluded that 36 wells will be needed to assure a 420 MMcf/d withdrawal capacity for Aliso.

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