Utility paying up to $1.8B in settlement for worst methane gas leak in US history

Utility paying up to $1.8B in settlement for worst methane gas leak in US history
© Getty Images

California’s largest natural gas utilities company announced on Monday that it agreed to pay billions of dollars in a settlement six years after a major methane leak that negatively impacted the health of nearby residents.

The company, SoCalGas, will pay $1.8 billion in damages related to the 2015 Aliso Canyon natural gas storage facility leak, an incident that occurred near Porter Ranch, outside of Los Angeles. Natural methane gas seeped from a nearby well. The Los Angeles Times notes that nearby residents who were exposed to the gas experienced nosebleeds, headaches and nausea.

The leak was discovered in October 2015. For 112 days, officials estimate that roughly 100,000 tons of methane, ethane and other chemicals were emitted into the air and permeating into nearby homes. About 8,000 families had to evacuate the area.

ADVERTISEMENT

Nearly 36,000 individuals were plaintiffs in lawsuits brought against SoCalGas over the years, prompting the company to settle the outstanding cases with an initial $1.1 billion to be paid this month.

Costs will not be paid for by SoCalGas customers, the company confirmed.

"These agreements are an important milestone that will help the community and our company work toward putting this difficult chapter behind us," said Scott Drury, the CEO of SoCalGas. "In the years since the leak, SoCalGas has worked alongside regulators, technical experts, and our neighbors to enhance safety at all our underground storage facilities and our engagement with the community.”

Amid concerns over the safety of the natural gas site, the Aliso Canyon location was briefly shuttered until 2017, when state regulators cleared SoCalGas to resume operations at the facility.

In addition to the settlement payments, SoCalGas is mandated by the state to operate the Aliso Canyon well at reduced pressure. The company will also implement new safety protocols, including 24-hour monitoring of the well, safety assessments and pressure testing, and using an insulated casing of inner steel tubing to provide a second barrier to prevent gas leakage. 

Despite the settlement, many residents oppose the Aliso Canyon site’s continued operation. A group formed in the wake of the methane leak, called Save Porter Ranch, has already organized a protest to permanently shut the well down.

“Don’t get too excited by this agreement,” said Matt Pakucko, president and co-founder of Save Porter Ranch, in a press release alongside the advocacy organization Food & Water Watch. “You can’t put a price tag on human suffering. SoCalGas’ devastating blowout will never be behind us until the Aliso Canyon storage facility is shut down and the danger it poses to the community is permanently eliminated. We are nowhere near a resolution.”