California regulators approve expansion of contentious natural gas storage facility

California regulators voted unanimously Thursday evening to boost the capacity of the Aliso Canyon natural gas storage facility — the same site where the nation’s biggest methane leak forced families to flee in 2015.

The California Public Utilities Commission (CPUC) approved an increase in the facility’s inventory levels up to the safety limit established by the state’s Geologic Energy Management Division. The decision, according to the CPUC, serves “to guard ratepayers from the type of natural gas price spikes that occurred last winter.”

“This decision does not impact our work to develop a plan to minimize or eliminate the dependency on Aliso Canyon,” CPUC President Alice Reynolds said at the Thursday hearing.

“This decision is not about using more natural gas or allowing the use of more natural gas,” she continued. “It’s about storing natural gas inside California in preparation for the winter.”

The CPUC authorization occurred just weeks after the same state agency announced a $71 million settlement with Southern California Gas Co. (SoCalGas) regarding the 2015 leak at Aliso Canyon, located in the Porter Ranch neighborhood of Los Angeles. 

Natural gas is predominantly composed of methane, a greenhouse gas that is much more potent than carbon dioxide. SoCalGas first informed the state of the leak in October 2015 and only temporarily controlled the situation in February 2016.

Neighboring communities at the time reported “rotten egg” odors, oil mists, acute respiratory issues and headaches, according to a Los Angeles County Public Health report. More than 8,000 households had to temporarily relocate due to the situation.

While campaigning for California’s governorship in 2018, then Lt. Gov. Gavin Newsom told a reporter that he was “fully committed” to shutting down the Aliso Canyon facility.

“The question is how quickly can we do that, but my commitment is to make that happen,” he said at the time. “Absolutely, unequivocally, it is my intention to do it.”

In response to the CPUC’s decision, Newsom’s deputy press secretary Daniel Villaseñor highlighted the governor’s ongoing efforts to ensure the swift closure of the Aliso facility, citing a 2019 letter reflecting these demands.

“He appreciates the CPUC’s efforts to maintain affordable and reliable energy for ratepayers, and he continues to encourage the Commission to expedite their work to permanently close the facility as part of California’s transition away from fossil fuels,” Villaseñor told The Hill in a statement.

“California, under Governor Newsom’s leadership, has done more than any other state to transition to 100 percent clean electricity and slash air pollution in our communities,” he added.

The CPUC issued a separate ruling Tuesday that outlines the steps it would take to release a plan by the first quarter of 2024 to decrease the state’s dependence on Aliso Canyon.

Two days later, the regulators maintained that their vote does not increase the amount of natural gas that would be consumed. But Aliso Canyon, they explained, serves “as a financial hedge against potential high winter market prices.”

Thursday’s decision allows the facility to increase its storage by 27 billion cubic feet — up to a total of 68.6 billion cubic feet. Such storage, according to a CPUC fact sheet, acts “as insurance against high or volatile natural gas prices.”

Preliminary estimates show that the temporary increase in storage at Aliso Canyon could generate savings from $200 million to $450 million for Southern California customers during the 2023-2024 winters, according to the CPUC.

Ahead of the Thursday hearing, however, the nonprofit Food and Water Watch argued that “there’s no guarantee that the expansion will do anything for customer rates — but it will guarantee more pollution, more threats to public health and safety, and more profits.”

But Reynolds stressed at the hearing that “California has 40 million people and almost 90 percent of them rely on natural gas for essential services.”

Yet because almost all that gas comes from out of state, she continued, Californians encountered exorbitant price spikes during the past winter. 

“In addition to the reliance on out-of-state natural gas production, in-state storage in the Southern California system is a finite resource and has to get us through the entire winter,” Reynolds said.

“This decision will help us be more resilient,” she added.

The same evening that the CPUC issued the ruling to expand Aliso Canyon’s natural gas storage, Newsom and state legislators reached an agreement on a package that seeks to expedite the deployment of renewable energy assets. 

That legislation aims to fast-track electric infrastructure permitting processes, diversify the state’s energy portfolio and strengthen grid reliability, according to the governor’s office.

Newsom described a need to harness every tool at the state’s disposal in order “to break the vicious cycle of climate change-caused energy emergencies,” in a Thursday statement.

“This legislation will help us achieve a 100 percent clean electric grid and phase out the very pollution that causes extreme weather in the first place,” the governor said.