California gas facility that had historic leak will be expanded, for now, regulators decide

California has approved expanded storage capacity — for now — of a gas facility that produced the largest methane leak in U.S. history.

The California Public Utilities Commission unanimously decided to increase the Aliso Canyon Natural Gas Storage Facility capacity by two-thirds Thursday. It allows the SoCalGas-owned site to hold almost 69 billion cubic feet of gas, which could be withdrawn for customers during what could be another turbulent winter of blackouts and high energy costs.

Officials — including Gov. Gavin Newsom and his predecessor, Gov. Jerry Brown — long promised to close the north Los Angeles gas reservoir after it leaked a combination of gases and chemicals for 111 days eight years ago, harming residents’ health and forcing 8,000 people to evacuate.

The goal remains to close Aliso Canyon, per a proposal by Brown to shutter it by 2027. It was adopted by Newsom, who asked to expedite the process after he took office in 2019.

“As the Governor has said, he appreciates the CPUC’s efforts to maintain affordable and reliable energy for ratepayers, and he continues to encourage the Commission to expedite their work to permanently close the facility as part of California’s transition away from fossil fuels,” said Alex Stack, a spokesman for the governor.

The CPUC, composed of officials appointed by the governor, decided that it was necessary to increase Aliso Canyon’s capacity in the short term to keep energy costs low this winter.

“We’re working to reduce reliance on the storage facility,” said CPUC President Alice Busching Reynolds. “But frankly, we’re not there yet.”

Reynolds said during the vote Thursday that this interim increase does not impede the CPUC’s work toward eventually eliminating use of Aliso Canyon. She added that it doesn’t encourage more use of natural gas amid California’s “ambitious climate goals” to decarbonize.

Rather, this proposal developed through a CPUC analysis was about “storing natural gas inside California in preparation for the winter” at what agencies determined to be safe levels at Aliso Canyon. This is particularly important for low-income individuals who struggled to pay gas bills during price hikes last winter, she said.

“Having this gas cushion available during the winter can drive down the price of natural gas and that very much benefits residential customers,” she said. “It also benefits residential customers by reducing the price of electricity. Since natural gas is used by electric generators to produce electricity, lower natural gas prices mean lower electricity prices.”

Largest US gas leak

Aliso Canyon sits about 8,500 feet underground, near the Porter Ranch neighborhood. In October 2015, one of the 114 storage wells leaked methane, benzene and other chemicals into the San Fernando Valley. Many attempts to stop it failed for almost four months.

The state forced SoCalGas to stop injecting gas into the chamber for about two years. When state agencies under Brown allowed SoCalGas to continue refilling Aliso Canyon, it was allowed to hold less than 24 billion cubic feet of gas. At full capacity, Aliso Canyon can hold 86 billion cubic feet.

While reopening it, the Democratic governor directed the facility to close in 10 years.

SoCalGas and its parent company, Sempra Energy, agreed to paid up to $1.8 billion to over 35,000 people and businesses affected by the leak in a 2021 settlement. This month, SoCalGas reached a $71 million settlement with the CPUC over the leak. It will become effective in about two weeks unless a party opts to appeal or a member of the CPUC requests a review.

Blackouts and high energy costs

Newsom agreed with closing Aliso Canyon while running for governor. His administration has pushed forward several climate measures with goals of having all new cars sold in California be zero-emission by 2035 and no carbon dioxide emissions by 2045.

But in the past year, it extended the lifespan of California’s last nuclear power plant, Diablo Canyon. Last month, it propped up three Southern California fossil fuel plants that were slated to close as a reserve for blackouts and strains on the power grid.

Rolling blackouts in 2020 had forced the facilities to stay open for another few years. The proposal to expand Aliso Canyon’s storage reflects similar concerns — keeping the lights on while moving to replace fossil fuels with renewable energy sources in the future.

Extreme weather, like floods and wildfires that have grown more common with rising global temperatures, threatens California’s more electric future. Such events alter energy use and can wipe out services entirely for periods of time.

Last January, SoCalGas customers saw bills double or nearly triple compared to the prior winter given market prices for natural gas. High prices in the West were attributed to below-normal temperatures, increased demand, pipeline constraints and low storage levels. SoCalGas said additional Aliso Canyon reserves could have aided with the winter’s higher costs.

Media representatives for SoCalGas did not immediately respond to The Bee’s voicemail.

SoCalGas asked CPUC to raise its rates in May 2022 to increase revenue, which drew ire from community members and officials who pointed to Sempra Energy’s high profits of $2 billion in 2022.

A Bee investigation found that SoCalGas booked at least $36 million to customers for political lobbying to derail California electrification and other policies aimed at addressing climate since 2019. (SoCalGas denied any wrongdoing in an email to The Bee.)

Community disagrees with expansion

The community north of Los Angeles had begged Newsom to prevent Aliso Canyon’s expansion and hasten its closure. Many residents expressed concerns over the increased capacity during the CPUC meeting Thursday.

“Aliso Canyon poses a significant danger to the health and safety of our communities and is entirely unnecessary for California’s energy reliability,” Andrea Vega, a Southern California organizer with Food & Water Watch, said in a statement. “It is past time for Gov. Newsom kept his campaign promises and shut this dangerous facility down.”

Food & Water Watch is one of more than 50 activist and community groups that have asked Newsom to deny the expansion.

Said Lori Aivazian of Aliso Moms Alliance, another of the groups, “For the health and safety of the children attending nearby schools and the tens of thousands of families living in the communities near the dangerous facility, the Aliso Moms Alliance stands firmly against the pending decision by the CPUC to dramatically increase the volume of gas stored at Aliso Canyon to nearly 100% capacity.”

California Democrats too were against the proposal. Assemblymember Pilar Schiavo and State Sen. Henry Stern, Southern California Democrats, joined a rally last week in support of permanently closing Aliso Canyon.

“We will reduce our dependency on Aliso Canyon,” Reynolds said Thursday. “But we also need to allow people, especially low income and vulnerable customers, to access affordable energy as we move to a new electrified economy.”