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California Files Suit Against Southern California Gas Company Over Leak

In October, residents of the Porter Ranch neighborhood — an upscale grouping of houses in the hills just north of Los Angeles, California — complained of what they thought was a natural gas leak from a home in the area. Upon investigating, Southern California Gas Company found that, in actuality, the smell was coming from a much, much worse source — the Aliso Canyon underground natural gas storage facility.


Aliso is a former oil production field that was tapped out in the 70s, and after the old oil wells were capped, was converted into an underground storage reservoir that has the capacity to store roughly 86 billion cubic feet of natural gas, which is a large chunk of the state’s overall natural gas storage capacity. The field is currently the second-largest natural gas storage facility in the US.

There are a handful of types of underground storage facilities, which the US Energy Information Administration has beautifully illustrated:


Image Credit: US Energy Information Administration

Of all the natural gas storage facilities used, the type of storage at the Aliso field is one of the least stable, as it has the aforementioned retired oil wells compromising the surface integrity of the reservoir. To make matters worse, those wells were capped using technology from the 70s, which is far inferior to how wells are capped today.

The Leak

Which brings us to the leak…. On October 23rd of 2015 — over 3 months ago — a leak was discovered at one of the 115 natural gas injection/withdrawal wells (where they fill up the reservoir or pull gas out) in the Aliso field, and all efforts by the Southern California Gas Company to cap the well and stop the leak have failed.

Utility Dive shares a piece of unique insight into just how much natural gas is leaking out, stating that “the ongoing release of what initially was 25% of California’s monthly methane emissions and could be as much as 15% of the hourly greenhouse gas emissions from the US natural gas industry.”

In other words, this is a massive leak from the second-largest natural gas storage facility in the US that has been gushing out natural gas as fast as it can… for more than 3 months. Day and night. This thing is massive, and I would bet dollars to donuts that residents had no idea it was there. I live a short 45 minutes away and had absolutely no idea, though that’s not terribly surprising.

To put the leak into context, SoCalGas put out the infographic below to show us that the leak is “only” 10% of the total CO2-equivalent emissions of dairies, or “just” 25% of the CO2-equivalent emissions from landfills (!!), or 2% of the total CO2-equivalent emissions from electricity generation. I’m not sure who approved the graphic on the SoCalGas side, but it does do a great job of illustrating just how disastrous this single incident is.

EmissionsGraphic Approved 1.29

Legal Action

On February 2nd, 2016, the California attorney general filed a suit against the Southern California Gas Company over the leak, Reuters reports. This latest suit is just one of dozens filed since the leak was discovered. It claims the utility violated state health and safety laws by failing to contain the leak and even in failing to report the leak in a timely manner. Initial reports found that SoCalGas found the leak on October 23rd, but didn’t report it until the 28th of October.

The suit also seeks damages related to the environmental impact of the estimated 80,000 metric tons of methane released since the leak was discovered. Reuters found that the leak was “the largest such leak ever in California, at its height it accounted for a fourth of all methane emissions statewide.”

Many lawsuits have been filed and this most recent suit pulls together a few earlier efforts filed by the city and county of Los Angeles and seeks an expedited resolution to the pressing issue at hand as well as financial damages.


Several attempts have been made to seal the leak, but all efforts to date have failed. After declaring a state of emergency, the California Governor’s Office of Emergency Services (OES) is fully engaged and driving closure once and for all. The OES website shares that a fix might be just around the corner (finally):

“On Jan. 25, the Southern California Gas Company announced that operations have entered the fifth and final phase to cap the leaking well at Aliso Canyon Natural Gas Storage Facility. According to SoCalGas, the completion date is still anticipated to be in late February. The relief well has reached a depth of 8,530 feet and is nearing an intercept with the leaking well. Once drilling reaches the leaking well’s base, crews will transition from drilling operations to pumping heavy fluids, cement and drilling mud into the target well to stop the flow of gas. Enough cement will be inserted to displace the fluids/mud and leave an intial seal of cement that will effectively cut off the leaking well.”

SoCalGas has taken as much gas out of the reservoir as it can while still maintaining enough reserve to supply area customers. Even crazier is the fact that all this gas is being stored in what is apparently a rather fragile container… in earthquake country. Let’s just hope this relief well does indeed allow the leaking well to be sealed off.

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I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in Tesla, Lightning eMotors, Arcimoto, and SolarEdge.


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