The prolonged leak of a well at the Southern California Gas Co. (SoCalGas) Aliso Canyon underground natural gas storage field has left the industry, state regulators and the multi-billion-dollar Sempra Energy utility in the cross-hairs of climate change activists like the Environmental Defense Fund (EDF), whose representatives on Friday called for a re-evaluation of the future role of natural gas in the nation's energy mix.

During a conference call Friday, EDF's Mark Brownstein, vice president for climate and energy programs, called for federal regulators to get involved, for tighter requirements for inspecting and maintaining the nation's more than 400 natural gas storage facilities, and longer term, for policymakers to rethink the role of natural gas in the nation's energy mix.

Scientist Anthony Marchese, a Colorado State University mechanical engineering professor who has led EDF-funded research of methane leaks in the gas gathering/processing segment, said that methane leaking from the nation's complex wellhead-to-burnertip gas system is a very small percentage, but overall methane volumes are skewed upward to environmentally significant levels by a relatively handful of incidents annually, of which Aliso Canyon is now the poster child.

The average leakage rate now after 77 days is equal on an annual basis to the methane emissions from six coal-fired power plants, said EDF's Tim O'Connor, who heads the environmental group's California oil/gas programs. Marchese characterized the Aliso Canyon emissions as representing 2% of all U.S. methane emissions. The EDF estimates, based on state-collected air sampling, that Aliso Canyon's well leak is spewing more methane daily than all of the state's oil/gas operations combined.

"What Aliso Canyon points to is a national challenge that has significant climate impact," said Brownstein, telling news media he thinks a federal agency, such as the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) needs to get involved. "Clearly there is a need to look at operations maintenance practice [at gas storage fields]."

Brownstein said that EDF is advocating three things as a result of the Aliso Canyon experience:

  • All states should adopt Colorado's requirement for regular inspection of oil/gas facilities, "using specialized equipment to find leaks";
  • States should upgrade well integrity testing in the wake of what EDF called "deficient" regulatory oversight in California; and
  • SoCalGas should compensate not only the community involved but also the environment, along with taking steps "to reduce dependence on natural gas."

As part of California Gov. Jerry Brown's emergency declaration earlier this week (see Daily GPIJan. 6), SoCalGas will be required to find ways and pay for them to reduce methane gas emissions equal to the level of the volumes that eventually are attributed to the ongoing well leak.

This climate change payback is only one of many monetary exposures SoCalGas and its parent company, San Diego-based Sempra Energy, are now facing, and they seem to grow daily with lawsuits and government mandates, such as the one in Brown's emergency orders that says no taxpayer or utility ratepayer dollars should be used to pay for the cost of resolving the storage well catastrophe.

Normally a well-regarded and long-standing corporate neighbor throughout the greater Southern California metropolis, SoCalGas increasingly is coming under fire from elected officials, news media and its customers.

In an editorial Friday supporting the governor's mandates, the Los Angeles Times alleged that the gas-only utility "knew the wells at Aliso Canyon were corroding and failing at an increasing rate, but there are no rules mandating frequent inspections. The leaking well didn't have a working safety valve."

The LA Times praised Brown for directing state regulatory agencies to study the "long-term viability of natural gas storage facilities" from both safety and climate change perspectives. The newspaper called for closer regulation of the industry.

Separately, a member of the Save Porter Ranch residents' activist group that is suing SoCalGas told NGI that the utility and government health agency claims that there are no health risks related to the leak for nearby residents may soon be rebuked by two University of California environmental scientists, contending that besides the odorant mercaptans, the leak contains other air toxics, including cancer-causing benzene.

In response to inquiries from NGI, both SoCalGas, state health and Los Angeles County health officials reiterated that based on daily air samplings exposure to the leak emissions "generally are not expected to lead to permanent or long-term health problems."

In the midst of a myriad of economic, political, regulatory, community and operating issues, SoCalGas reiterated that it is focused on fixing the leak, paying all the costs, responding to residents' complaints and still operating its gas system serving 22 million people without the threat of service disruptions. On Friday, NGI sought updated information on the level of gas still in storage and the rate of withdrawals this week, given that injections have been stopped since the leak was discovered.

SoCalGas representatives did not immediately respond.

In the days and weeks ahead another area of concern for the utility and its parent company will be the ultimate cost of this leak and its financial impacts on Sempra Energy (see related story).

California natural gas traders are warily eyeing developments (see Daily GPI, Jan. 8). "The market impact depends on how Aliso Canyon affects southern California's ability to import gas. If you are de-rating northern and southern zone import capacity then that can affect the relationship between SoCal Border Avg., El Paso Mainline and the SoCal Citygate system," said an analyst with EnergyGPS, a Portland, OR-based power and natural gas market and consulting firm.

"If you can't move gas from the Border into SoCal Citygate, then there will be a decoupling of those prices."