Last April, the state's energy regulators and Southern California Gas tried blackout blackmail to reopen Aliso Canyon. They claimed that if the natural gas storage facility didn't reopen, the area faced possible blackouts of up to 14 days. Blackouts? What blackouts? The fact is, there were no blackouts.
Now, they are trying more subtle tactics to make the case that we need Aliso Canyon. In their press release on winter energy reliability, out this week, they say it's smooth sailing ahead, “normal” winter demand can be met with other natural gas storage fields, buying LNG and other measures.
But the winter reliability action plan says something else--“on a winter peak day” there won't be enough gas in other storage fields to meet demand. Starting injections again at Aliso Canyon reduces that risk, the report argues, and the sooner the better.
The report threatens that delaying injections until October means that “the reserve margin on a peak winter day is less than 10 percent, providing little assistance to accommodate equipment failures or other events.” In other words, keeping Aliso Canyon closed risks the blackouts that the press release says won’t happen.
Once again, SoCalGas and its regulators are using the same tactics that they did the last time around. They are inflating demand and underestimating supply, just as they did last April.
SoCalGas has every reason to push beginning injections at Aliso as fast as possible. They have invested $200 million in a new compressor station and shareholders at Sempra, its parent company, will be left holding the bag if Aliso is shuttered. They make lots of money off of charging customers to park natural gas reserves there.
Complicating matters are the Governor's family ties to SoCalGas's parent, Sempra. His sister Kathleen Brown sits on the board of Sempra. She was paid $691,300 in stock and cash for her work from 2013 through 2015. Protecting Sempra's bottom line, also means protecting the value of Kathleen Brown's stock.
Kathleen Brown also holds $749,000 worth of stock in real estate and oil company Forestar Group. Forestar owns 700 acres of land next to Porter Ranch where it plans to build a luxury home community. Forestar has every reason to downplay the risks of living next to Aliso Canyon so it can collect on its investment, which also helps Kathleen Brown.
But the true risks of Aliso to neighboring communities will never be known because Jerry Brown’s proclamation on a state of emergency at Aliso Canyon shrouded in secrecy the details of any investigation by regulators into negligence at Aliso Canyon. The proclamation simply says that regulators will let the public know the results of the investigation when it is complete. The only regulator that can launch a public investigation is the Public Utilities Commission, which won't even accept a petition from Consumer Watchdog to rule one way or the other on that question.
In actual fact, we don’t need Aliso Canyon. That's because we have plenty of supplies to meet demand. Regulators themselves proved it this spring by making big commercial customers like utilities and refineries order pipeline supplies a day in advance instead of a month in advance to more accurately meet demand, and by pushing conservation strategies. Those measures are being extended, and there's no reason they won't work this winter.
It’s time to do a cost-benefit analysis from the point of view of both ratepayers and the people who live next door to Aliso Canyon. The Aliso well blowout caused the biggest methane leak in US history, forcing the relocation of 15,000 residents and sickening many of them.
The cost to ratepayers of maintaining Aliso Canyon, including the new compressor station, is $70 million a year, according to SoCalGas's own estimates. That doesn’t count shutoff valves or other safety equipment SoCalGas will have to install in a field studded with many wells that are more than 50 years old.
So far, the fact that more than half of the remaining storage wells at Aliso had to be plugged and isolated, and that 15 passed required tests only after being repaired, does not inspire confidence. Sempra itself, which is now on the hook for more than $700 million associated with the blowout disaster, should understand it isn't worth the risk to reopen Aliso Canyon.
But blackout blackmail, no matter how subtly argued, just won't work.
