Jerri-Lynn here: Quelle surprise! Looks like that self-regulation fairy was — and will continue to be– about as effective in regulating the Alito Canyon natural gas storage facility as it has elsewhere proven to be in so many other areas and situations where it’s supposed to protect the public from harm.
By Justin Mikulka, a freelance writer, audio and video producer living in Trumansburg, NY. Justin has a degree in Civil and Environmental Engineering from Cornell University. Originally published at DeSmogBlog
A recent report spearheaded by researchers at the University of Southern California blames the largest greenhouse gas leak in U.S. history on dysfunctional management and poor regulatory oversight. Southern California Gas (SoCalGas) is the company that operates the Aliso Canyon natural gas storage facility near the Los Angeles neighborhood of Porter Ranch, which suffered a catastrophic methane leak that lasted from October 2015 to February 2016.
“SoCalGas had lenient requirements for infrastructure record keeping, no comprehensive risk management plan, and no testing programs or plans in place to remediate substandard wells,” concluded Najmedin Meshkati, University of Southern California professor of civil and environmental engineering and senior author on the report. The study was published in the Journal of Sustainable Energy Engineering.
In addition to its notable contribution to global warming, the massive methane leak also required the evacuation of two schools and at least 8,000 residents for months while SoCalGas tried to stop the leak.
The California Public Utilities Commission also issued a report evaluating the failed storage well at Aliso Canyon, and noted that “severe external corrosion was observed in the failure areas.” Based on these reports, it appears that SoCalGas had a policy of allowing its gas storage wells to operate until they failed, such as at Aliso Canyon.
DeSmog reached out to SoCalGas for comment on the University of Southern California study but did not hear back.
A History of Industry Self-Regulation
In theory, outside inspectors could have potentially caught some of these safety issues during regular evaluations of the infrastructure. But as the University of Southern California’s report details, that is not how the natural gas storage industry operates in the U.S. Instead, its description of the circumstances leading to the leak reads as much like a recipe for future disaster as an analysis of past failures. Previously, the industry has largely been allowed to self-regulate and the trend continues today.
This picture is reinforced by a Government Accountability Office (GAO) audit published in November 2017. The report reveals that about half of the nation’s active natural gas storage sites are overseen on a variable state-by-state basis, but as for the other half, which straddle state lines:
“Prior to 2017, the remaining 204 interstate natural gas storage sites were subject solely to federal oversight. However, the federal government had not issued safety standards for them.”
Slightly less than half of the 415 natural gas storage sites in America have been operating without safety standards or inspections by federal regulators.
However, if SoCalGas had known that the well at Aliso Canyon was likely to fail, would the company have addressed the problem on its own? Apparently not, because according to its own company logs, SoCalGas had known about the potential for a leak in that particular well since 1992.
No current regulations require safety shut-off valves on natural gas storage wells like the one that failed at Aliso Canyon. In an interesting twist of fate, Aliso Canyon’s failed well actually had an underground safety valve, but SoCalGas removed it in 1979 and did not replace it, despite its own documents decades later noting the well was at risk of leaking.
Apparently, SoCalGas requested to raise customer rates in 2010 in order to make repairs and replace leaking safety valves, but its plan was to do so at a rate of only five percent of affected valves a year.
Newly uncovered information shows that Southern California Gas Company admitted five years ago it operated numerous leaking wells in Aliso Canyon, received a ratepayer increase to upgrade these wells, and yet deliberately failed to replace safety valves on its gas injection wells,” said attorney Patricia Oliver, who is involved in one of the lawsuits about the incident, in January 2016.
In July 2017, James Mansdorfer, a former SoCalGas employee in charge of the wells at Aliso Canyon, highlighted additional risks associated with potential earthquakes at the gas storage facility.
My belief is that there is potential for catastrophic loss of life, and in light of SoCalGas refusal to openly address this risk, my ethics just will not allow me to stand by without making the public aware of what could happen,” Mansdorfer told the Los Angeles Daily News.
Status Quo or Outlier?
According to the 2017 Government Accountability Office (GAO) audit, other natural gas storage sites may pose similar risks as Aliso Canyon due to aging infrastructure or proximity to population centers.
The audit notes that many of these natural gas storage sites “are located within 3 miles of a city, town, or other populated area.”
In addition, half of the “17,000 wells that inject and withdraw natural gas from storage sites are more than 50 years old, and many wells are more than 100 years old.” These older wells “were often drilled for other reasons, such as oil and gas production, and are more likely to have age-related degradation, according to [the Department of Energy].”
Inadequate Interim Regulations
In June 2016, just months after the Aliso Canyon incident, Congress passed the Protecting Our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act, which requires the Department of Transportation (DOT) “to establish minimum safety standards for all natural gas storage sites by June 2018,” according to the GAO report. As a result of the PIPES Act, the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued an interim rule for safety standards and is responsible for finalizing that rule.
As the GAO audit points out, the interim rule is already potentially problematic. The first problem is that these gas storage site regulations are only voluntary and based on industry recommendations, as noted in the audit, which takes a critical look at PHMSA’s regulatory oversight:
“Under the interim standards, site operators are to follow industry-developed best practices to detect and prevent leaks and plan for emergencies, among other things.”
This approach looks suspiciously similar to asking the natural gas storage industry, after causing the largest ever U.S.methane release, to regulate itself once again. The PIPES Act also created an Aliso Canyon Natural Gas Leak Task Force, which made several safety recommendations, including the following:
“Operators of natural gas storage sites should begin a rigorous program to evaluate the status of the wells, establish risk management planning, and, in most cases, phase out old wells with single-point-of-failure designs.”
Of course, recommendations outline what operators “should” do to prioritize safety. However, recommendations do not provide guarantees or oversight that safety actions which should be done actually are done.
Oil and Gas Industry Weighs in
The task force also recommended “that operators phase out most storage wells with single-point-of-failure designs — where the failure of a single component, such as a well casing, could lead to a large release of gas — by installing multiple points of control at each well.“ This would translate to SoCalGas and other storage site operators installing safety shut-off valves on all natural gas wells.
Yet as detailed in the GAO audit, PHMSA did not require this practice in its proposed safety rule because the American Petroleum Institute, the oil and gas industry’s largest trade group, claimed “its recommended practices do not direct operators to phase out such wells because this practice may not significantly improve safety in all cases.”
As a result, regulators have chosen to ignore a federally created safety task force in favor of following the advice of oil and gas industry lobbyists. But to fully appreciate the audacity of the lobbying group’s claim that shut-off valves don’t necessarily improve well safety, you need to know the argument made to back up this claim.
The American Petroleum Institute cites the Aliso Canyon disaster as an example of why phasing out wells with a single point-of-failture (i.e., those without shut-off valves) should not be required because, it says, such an approach might not have prevented the accident. Instead, it recommends assessing the risks at each storage site and taking steps to reduce those risks, which “could include installing multiple points of control for certain wells, among other possible mitigation steps.”
Meshkati, the senior author of the University of Southern California study, has a different take on how a shut-off valve might have changed the Aliso Canyon leak, which occurred at a storage well known as “SS-25.”
“If a functional kill valve were in place for well SS-25 in October 2015 when the leak began, the leak could have been stopped in a matter of hours or days rather than after four months,” Meshkati said.
Audit Details Safety Rule Limitations
On top of this glaring example of the industry shaping its own regulatory process, the GAO found that PHMSA was doing a poor job with the new safety rules. The audit notes the steps PHMSA has been taking to improve its oversight is limited in both scope and strategy:
“For example,PHMSA has not yet defined the level of performance to be achieved, fully addressed all core program activities, or used baseline data to develop its performance goal … PHMSA’s goal focuses on training and does not address other core program activities, such as conducting effective inspections. For example, a goal to evaluate whether PHMSA’s inspections are effective could be to annually reduce, by a certain percentage, the number of sites not meeting minimum standards.”
Over two years after the Aliso Canyon disaster, the federal officials in charge of improving the safety of U.S. natural gas storage have outlined vague and incomplete aspirations for improving safety, but one point they were clear on was that, as the oil and gas industry says, shut-off valves shouldn’t be necessary.
PHMSA has come under fire from safety advocates before, with Rep. Jackie Speiers (D-CA< once referring to the agency as “a fluffy industry pet.” And, in line with that assessment, PHMSA recently repealed regulations requiring oil trains to have modern brakes. Of course, PHMSA is now run by a former executive of freight train company CSX, and CSX is a big player in the oil-by-rail business.
“How many more oil and gas disasters have to occur before a healthy culture of safety is implemented?” asked Meshkati in the press release accompanying his study.
The GAO audit hints that there is plenty of time to find out: PHMSA published guidance on its website stating that it expects operators to make and implement plans to inspect and remediate risks found at their sites within 3 to 8 years following the effective date of the interim final rule.”
So, business as usual.