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‘Blackout Blackmail’: Utility, regulator accused of scare campaign over gas cuts

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Climate Progress

Protestors carry a photo of California's governor Jerry Brown and demand a shut down of the Southern California Gas Company's Aliso Canyon Storage Facility near Porter Ranch in Los Angeles.

Protestors carry a photo of California’s governor Jerry Brown and demand a shut down of the Southern California Gas Company’s Aliso Canyon Storage Facility near Porter Ranch in Los Angeles.

A new report calls into question — again — California’s handling of this winter’s historic natural gas leak, this time suggesting that regulators and the gas company are purposely scaring the community and legislature into putting the storage facility back online.

Two reports issued by the state and utility last week predicted summer blackouts if the Aliso Canyon Storage Facility stays out of operation, but there is actually plenty of gas available in Southern California, according to the new report commissioned by Food and Water Watch.

Bill Powers, an energy and environmental engineering consultant and author of the report, sharply criticized the agencies’ data, while the head of a consumer advocacy group called the state report “propaganda” and “fraud.”

The state report — co-authored by Southern California Gas Company (SoCalGas), which owns Aliso Canyon, and the California Public Utilities Commission, along with three other state regulatory agencies — over-estimated fuel needs by twice as much as the local reliability requirements would indicate, Powers said. It also underestimated the capacity of other nearby SoCalGas gas storage facilities.

“The numbers are wrong,” Powers said on a call with reporters Tuesday. “What has been put out is a document using sensationalism and poorly documented numbers… to allow the utility to get its objective.”

SoCalGas was in the process of a massive investment in Aliso Canyon when the blowout occurred. That project, as well as the company’s other investments in the facility, will be worthless if it doesn’t go back online. “They have a lot of money on the line,” Powers said. “They don’t get paid if Aliso Canyon doesn’t continue to operate.”

Meanwhile, California legislators, who are currently considering a bill that would extend the facility’s shutdown, are understandably loath to do anything that would cause blackouts.

“The utility knows that all it has to do is raise the specter of a blackout, and it will get Aliso Canyon back,” Powers said.

But from October to February, the ruptured well at the Aliso Canyon storage facility spewed 97,100 metric tons of methane into the atmosphere and caused thousands of families to evacuate their homes in Porter Ranch, a neighborhood northwest of downtown Los Angeles. Aliso Canyon has been subject to a moratorium on gas injections since January, but SoCalGas is inspecting each well and hopes to reopen it by the end of the summer.

The utility has argued that not only is Aliso Canyon needed to keep up capacity, it also lowers energy costs by allowing the company to take advantage of fluctuations in prices. The state report, however, didn’t take into account the cost of operating and maintaining the storage facility, which is estimated to be $40 million annually over the next six years.

Local residents and environmentalists want the facility shut down for good.

Jamie Court, president of Consumer Watchdog, a consumer advocate group, also spoke to reporters Tuesday, drawing the connection between SoCalGas, the regulators, and money.

“My suspicion is that SoCalGas wrote this report almost in its entirely and the state of California put it under its seal,” he said. “If you look at the conduct of the agencies involved in this report it really looks as though the taxpayers’ own money was used as propaganda fraud against them.”

Court called for the legislator to subpoena the head of the Public Utilities Commission. “When you say that a major gas reserve isn’t available, and it is, that’s a lie,” he said.

There is no question that, even with inspections, the facility is old and leaky. In fact, more than half SoCalGas’ storage wells are more than 50 years old.

“This blowout really highlights that this is just one incident in a larger ongoing disaster,” said Alexandra Nagy, a senior organizer with Food and Water Watch. “We are advocating for the permanent closure of Aliso Canyon. There is really no other option. We cannot go back to business as usual.”

Source: Climate Progress. Reproduced with permission.  

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  • Mike Dill

    My guess is that the environmentalists are mostly correct, but Southern California might need to rapidly adapt to the new situation. Putting the resources into rooftop solar instead of the fossil fuel infrastructure makes sense in sunny Southern California where there is still a water shortage for cooling the turbines.