trending Market Intelligence /marketintelligence/en/news-insights/trending/2_RPz-9r6Z_3suLJnWbUSA2 content esgSubNav
In This List

SoCalGas challenges Calif. board's authority to demand mitigation for gas leak


Insight Weekly: Recession risk persists; Banks pull back from crypto; 2022 laggard stocks rally


Highlighting the Top Regional Aftermarket Research Brokers by Sector Coverage


Energy Evolution | A transition to cleaner energy drives demand for new nickel mines


Energy Evolution | Looking ahead to the energy transition in 2023

SoCalGas challenges Calif. board's authority to demand mitigation for gas leak

SouthernCalifornia Gas Co. hit back at the California Air Resources Board,questioning its authority to compelmitigation measures to offset the methane leaked from the Aliso Canyon gasstorage site.

"[T]he ARB explicitly decided not to regulate fugitiveemissions, such as those from the leak at Aliso Canyon, a decision confirmed bythe ARB on multiple occasions. Thus, any proposed mitigation program from theARB does not itself impose any legal obligations on SoCalGas," GeorgeMinter, SoCalGas' regional vice president of external affairs and environmentalstrategy, said in a March 24 letter to the board.

CARB on March 18 released a draft plan to require SoCalGas totake on greenhouse gas emissions mitigation projects in California tocompensate for the Aliso Canyon incident in the Los Angeles area, which spannedlate October 2015 through mid-February. CARB said the leak emitted94,500 tonnes of methane. Among the mitigation options the board suggested werefor the utility to find ways to control emissions from the agriculture andwaste sectors, promote sustainable energy infrastructure, and tackleunrecognized or unresolved sources of methane emissions.

SoCalGas, however, has disputed CARB's emissions estimateand the global warming potential calculations the board used to determine theimpacts of the Aliso Canyon leak. SoCalGas stressed that CARB's estimates werepreliminary and based on intermittent data collected by periodic flyovers, andit said it is working on its own estimates that it ultimately intends to sharewith the public.

CARB used 20-year time horizons to calculate the climateimpacts of the Aliso Canyon leak. Even though methane is a relatively short-livedgreenhouse gas with only a 12-year atmospheric life span, SoCalGas noted thatCalifornia and federal regulatory programs have typically used 100-year globalwarming potential for greenhouse gases. The different timelines affect thecalculated impacts of the leak, with longer horizons being more favorable forthe company.

Further, the utility objected to CARB's attempts toestablish a time frame for implementing the proposed emissions mitigationprojects as "arbitrary at best," though it said timeliness isgenerally important.

"The ARB's declaration that all emission reductionsmust occur within ten years from the beginning of the Aliso Canyon leak meansthat projects with longer lifecycles would not be evaluated on an equal basiswith projects that accomplish those reductions in ten years, albeit are morecostly or resource-intensive," Minter wrote.

His letter also expressed opposition to CARB's proposal thatthe emissions mitigation projects take place in California, contending thatclimate change's global nature should allow for mitigation projects withwide-ranging geographies.

But Los Angeles Mayor Eric Garcetti and City Council memberMitchell Englander told CARB in separate March 24 letters that the greenhousegas mitigation program should not just focus on California but prioritize LosAngeles specifically. They argued for projects that help reduce gas dependencein the area.

Still, the SempraEnergy subsidiary expressed a willingness to work with CARB ondevising methane emissions mitigation strategies.

"The ARB's draft program has many laudable goals,including consideration of opportunities for innovation and technologyadvancement, such as projects to generate significant reductions for methaneemissions within the agriculture and waste sectors; measures to reductionemissions methane hot spots and/or newly identified sources; and efforts tointroduce and further deploy sustainable energy infrastructure and modes oftransportation," Minter wrote.