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Yesterday, the California Division of Oil, Gas and Geothermal Resources (DOGGR) confirmed that the Aliso Canyon natural gas leak has been stopped, the well has been permanently sealed and taken out of service. SoCal has given displaced residents until Feb 25 to transition back to their homes.
California State Legislature
California State Senate passed Senate Bill 380 with 40-0 vote on January 27 and it is with the State Assembly for approval, and then sent to the Governor for approval. The Governor cannot veto the bill if it is passed by two-thirds of the Assembly. The major provisions of SB 380 include:
In addition, there are currently two other proposed bills to address the Aliso Canyon leak. The first bill would designate the state Office of Emergency Services as the lead agency on any future leaks and require the gas company to pay for the leak’s damages with its profits, not ratepayer funds. The utility has said its insurance will cover more than $1 billion in costs. The second bill would require the inspection of all natural gas storage facilities statewide in the next year and then at least once annually thereafter.
Emergency order by Governor Jerry Brown
In his emergency order, the Governor Jerry Brown asked state agencies to assess the viability of the state’s natural gas facilities. Under the Governor’s Emergency Order, various agencies are to assess the long-term viability of the state’s natural gas facilities and the agencies have mentioned that they will be providing the analysis by April. The order also continued the prohibition against injecting any gas into the Aliso Canyon site until third-party experts can determine the safety of the storage wells.
Federal update
California Senators Dianne Feinstein and Barbara Boxer, have proposed an amendment to energy legislation in the United States Senate which would ask Energy Secretary Ernest Moniz to review the leak at the Aliso Canyon. The amendment would give Moniz and a six-member task force six months to determine whether Aliso Canyon and other gas fields near populated areas should remain open.
Looking forward, there are variety of potential impact scenarios:
Stay tuned to the Direct Energy Business Blog for the latest updates on Alison Canyon. For other natural gas news, please check out the Weekly Energy Market Update.
Posted: February 19, 2016