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UPDATE: Corroded pipe casing found to be the cause of Aliso Canyon gas leak

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UPDATE: Corroded pipe casing found to be the cause of Aliso Canyon gas leak

The multimonth methane leak at Southern California Gas Co.'s Aliso Canyon storage field that displaced thousands of California residents was caused by a corroded pipe casing, a state investigation determined.

The California Public Utilities Commission and the Department of Conservation's Division of Oil, Gas, and Geothermal Resources, or DOGGR, released a root cause analysis May 17 that faulted Southern California Gas, or SoCalGas, for failing to conduct detailed follow-up inspections or analyses after previous leaks at the site. Third-party investigators hired by the state identified more than 60 casing leaks at Aliso Canyon before the October 2015 incident going back to the 1970s, the report said, but no failure investigations were conducted by SoCalGas.

The report, which was conducted by independent consulting firm Blade Energy Partners Ltd., said an axial rupture of the production casing of the well was caused by microbial corrosion due to contact with groundwater, SoCalGas said in a May 20 SEC filing. Within hours of the corrosion, the casing completely separated from the pipe. "Insufficient kill fluid density and pump rates" thwarted attempts to stop the leak, the SEC filing said citing the Blade report.

Blade estimated the total amount of gas leaked to be 6.6 Bcf, according to SoCalGas. The Blade report concluded that SoCalGas complied with gas storage regulations, but its compliance did not help it find issues in its pipes' casing integrity.

The report noted that SoCalGas could have taken steps to identify corrosion early on and help prevent the leak, but these steps were not required by regulations at the time. "Those measures include the following: risk assessment for well integrity management, failure analyses of any previous casing leaks, dual mechanical barrier in the well, policy or regulations requiring production casing wall thickness inspections, well-specific well control plan, understanding of the presence of groundwater, corrosion protection practices and a well surveillance system," SoCalGas said in the SEC filing about the Blade report.

"The release of this report marks an important milestone in helping the region and California move forward from the Aliso Canyon natural gas leak," SoCalGas said in a statement on its website. "The leak was an industry-changing event resulting in the development and implementation of enhanced safety regulations and practices. Today Aliso Canyon is safe to operate and [the] report indicates the industry-leading safety enhancements and new regulations put in place after the leak should prevent this type of incident from occurring again."

SoCalGas' current well integrity practices and DOGGR regulations implemented following the leak already address most or all of the root causes of the Aliso Canyon leak, the report concluded.

SoCalGas parent Sempra Energy agreed to pay California and Los Angeles $120 million to mitigate the effects of the leak, which emitted 109,000 metric tons of methane between October 2015 and February 2016.