California Regulators Increase Gas Well Inspections After Aliso Canyon Leak

State oil and gas regulators have approved temporary regulations governing underground gas storage, a stopgap measure aimed at improving oversight of fields like the one in north Los Angeles County, where a massive methane leak has been spewing for months. The leak has forced thousands of residents of nearby Porter Ranch to flee their homes, including California's secretary of state.

Southern California Gas Co. wells at Aliso Canyon are among more than 300 scattered over 12 gas fields around the state subject to the new regulations, which took effect last Friday. The Department of Oil, Gas and Geothermal Resources developed the rules in response to an executive order from Gov. Jerry Brown.

The new rules emphasize more regular inspection and monitoring for the integrity of wells. Utilities will verify mechanical integrity and gas pressure, inspect wellheads daily, establish safe pressures for the gas flow at fields, and develop comprehensive emergency management plans for storage areas.

SoCalGas and other utilities have indicated general support for the emergency regulations, even though state officials have estimated that the additional mandates could cost $2 million a year in salaries.

PG&E owns and operates three natural gas storage centers in Northern California.

“We're going to take a seat at the table with all of the different regulators to ensure that as these are being outlined, that we continue to move the ball forward and raise the bar forward in the industry,” says Vice President of Gas Asset and Risk Management Sumeet Singh.

Singh says the company has started daily leak inspections at the facilities and was already testing safety valves, and that the company will start continuous pressure monitoring in the next 30 days.

The new regulations address problems that had been identified at Aliso Canyon before the leak was acknowledged Oct. 23. SoCalGas had raised concerns about aging equipment at that field as far back as 2013, when the company asked the California Public Utilities Commission for the right to use ratepayer funds for a “storage integrity management program.”

According to a state legislative briefing paper, a serious problem at Aliso Canyon in 2008 stemmed from an overpressurized well, which “can be indicative of production casing leaks from either internal or external corrosion.”

Emergency regulations initially take effect for a six-month period, and can be renewed for another six months. Officials with the state Department of Oil, Gas and Geothermal Energy say a permanent rule-making will follow. Separately, California congressional leaders have asked federal agencies to take a more active role in gas field oversight.

The regulations come as SoCalGas says it's coming close to plugging the leak. The company announced Monday that it had reached a deal with the Los Angeles City Attorney’s Office, offering residents of the nearby community of Porter Ranch who had relocated away from the area eight days to return once the leak was plugged, rather than a two-day period initially promised last year.

The company says it will honor leases for relocated families and reimburse moving and other expenses for the time since the leak was revealed.