Daily GPI / E&P / Regulatory / Infrastructure

Future of SoCalGas Storage Field Tied to Well Integrity Test Results

While public officials and activist groups spar over its long-term importance to regional energy supplies, Southern California Gas Co.'s (SoCalGas) shuttered Aliso Canyon underground natural gas storage facility is not likely to reopen until all of its 114 storage wells have passed a series of integrity tests.

SoCalGas thinks that can be accomplished by the end of summer (see Daily GPI, April 8); others are skeptical.

A report recently released by state officials concluded that there is a risk for rolling electricity blackouts in parts of Southern California this summer because of the closed gas storage facility (see Daily GPI, April 5), but environmental and citizen groups are calling that a scare tactic designed to eventually reopen the 3,600-acre, 86 Bcf capacity facility.

The only certainty now is that the four-month leak -- one of the largest of its kind anywhere -- in Aliso's SS-25 storage well created a large-scale political and environmental issue for California, the natural gas industry generally, and aggressive Obama administration climate change mitigation policies.

In some parts of the region, cooler heads are calling for a lowering of the rhetoric and allowing of more facts to emerge from the ongoing testing and other pending legal, regulatory and technical work in response to prolonged incident at California's largest gas storage facility.

Responding to a request from Gov. Jerry Brown, California's three major energy agencies collaborated on an analysis of "whether Aliso Canyon being closed could have any potential impact on electricity reliability," said Marcie Edwards, general manager at the Los Angeles Department of Water and Power (LADWP), which collaborated with the state agencies because of its role as a large generator using gas-fired power in the region.

The report released earlier this month, "Aliso Canyon Action to Preserve Gas and Electric Reliability for the LA Basin," examined four scenario days of power flows selected from the last few years and looked at them in regard to a standard analysis of gas flows done regularly by SoCalGas. "When they reviewed this it turned out there were a number of days when potentially the electrical system could be impacted," Edwards told NGI Thursday.

"Some people are upset by this assessment because it looks like this means we have to keep the gas storage field operating, but we don't necessarily. We are just saying the risks [for shortages] are potentially increased because of loss of some level of flexibility [in gas supplies], but we could probably make it up through increased conservation, efficiency, and changes in operations [of the regional gas and electric grids]," she said.

From LADWP's standpoint as the operator of four gas-fired generation plants in the greater Los Angeles Basin it is not essential that Aliso Canyon continues to operate, Edwards said. "Our position is that there should not be an ounce of gas reinjected into that reservoir until the wells have all passed inspections or been plugged," she said. "But we are not advocating that it be closed. There is probably a middle ground, but it would depend on the status of inspections and other factors."

A San Diego-based advocacy organization, Food & Water Watch, has offered what its officials call a rebuttal to the state report, alleging the report used "inflated electricity demand estimates" and underestimates the role that SoCalGas' other three storage fields can play. Congestion on the region's natural pipeline infrastructure should not be a problem, the advocacy group contends.

The critics of the state assessment also point to various options that LADWP and other Southern California municipal power utilities have through long-term purchases of gas reserves in Wyoming, although utility and state officials have indicated the reserves aren't really applicable regarding the storage issue. Ownership of the reserves does not provide easier or priority to supplies in the pipeline queue, a spokesperson for the California Energy Commission told local news media.

For LADWP, its gas reserves amount to only about 10% of the volumes needed to operate its four gas-fired generation plants.

In laying out its three-phase plan for testing all the Aliso wells, SoCalGas reiterated that the natural gas and electricity grids are interdependent. During periods of peak gas and electricity demand or when renewable sources of power are diminished, gas-powered electricity fills the gap, utility officials stressed.

Since two days after the leak was discovered last year, no natural gas has been injected into the Aliso Canyon storage facility and all injection activity into the facility remains suspended until SoCalGas complies with state Division of Oil, Gas and Geothermal Resources' safety review and testing regime. Withdrawals from the facility also have been stopped at the direction of the California Public Utilities Commission.

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