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California Governor Signs Gas Storage Bill; Lawmakers Review Summer Power Risks

A bill to tighten California’s rules for natural gas storage wells (SB 380) was signed into law Tuesday by Gov. Jerry Brown, enhancing oversight and testing imposed in the wake of the four-month leak at the Aliso Canyon underground storage facility.

The legislation, SB 380, essentially codifies what the Division of Oil, Gas and Geothermal Resources (DOGGR) had implemented following the storage leak at Sempra Energy’s Southern California Gas Co. (SoCalGas) facility (see Daily GPI, March 29).

SoCalGas and industry stakeholders supported the requirements for more comprehensive safety reviews of the state's 12 gas storage facilities. Aliso Canyon, a 3,600-acre, 86 Bcf capacity facility, is the largest.

Also in Sacramento Tuesday, the state’s Senate Energy, Utilities and Communications Committee heard testimony about a collaborative industry-state assessment that warns of potential rolling power outages during peakload periods this summer as Aliso Canyon remains closed until it meets DOGGR's well testing requirements (see Daily GPIApril 5).

Critics have alleged that state and gas utility officials are overstating the risks to pressure the state to reopen the facility, which is within a mile of an upscale residential development in the San Fernando Valley.

While state and utility officials poured through details of the assessment, which warns there could be up to 14 days of rolling electricity blackouts this summer, representatives from environmental groups urged lawmakers to be wary of pressure to reopen the facility. State Sen. Fran Pavley, a member of the energy committee and author of SB 380, said most of her constituents living near the facility want it closed.

California Energy Commission Executive Director Robert Oglesby said in his testimony that potential blackouts this summer could extend beyond the Los Angeles Basin and impact all of Southern California.

Committee Chairman Sen Ben Hueso questioned whether the use of underground storage as a vital part of the state's energy network is "antiquated," but Pavley said gas as a fuel source is going to be around for a long time.

"Is Aliso Canyon as an energy source part of the future of our state?" Hueso asked after a Los Angeles Department of Water and Power executive underscored the utility's dependence on the storage facility.

Those testifying attempted to assure lawmakers that Aliso Canyon can work in the future, given its completion of integrity testing and maintenance of its 114 storage wells.

In the long-term, state officials said the energy grid may be able to get along without Aliso Canyon, but it is a step that would have to be worked out carefully over several years. In the short term, the facility is a critical piece of the region's energy delivery system, representatives said.

"It would take a series of infrastructure investments, a change in how the system operates and maybe different pipeline/storage configurations and bigger investments in reducing gas demand overall," said California Public Utilities Commission’s Ed Randolph, energy division director. 

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