SoCalGas Issues Statement on Blade's Analysis of Aliso Canyon Well Failure

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May 17, 2019, 14:46 ET

LOS ANGELES, May 17, 2019 /PRNewswire/ -- Earlier today, Blade Energy Partners (Blade) published a report detailing its analysis of the 2015 natural gas leak at SoCalGas' Aliso Canyon storage facility. The investigation was conducted at the direction of the California Public Utilities Commission and the Division of Oil, Gas and Geothermal Resources.

The report concluded that a rupture in the outer casing of the well occurred on the morning of October 23, 2015, followed hours later by a complete separation of the casing. According to the report, microbial induced corrosion caused the metal in the outer casing to thin, which led to the rupture.

Blade's report confirms SoCalGas complied with gas storage regulations in existence at the time of the leak. Blade also determined that SoCalGas' current practices and new state regulations address most, if not all, of the causes identified in the report. SoCalGas is still reviewing the report and issued the following media statement in response to the report's release:

"The release of this report marks an important milestone in helping the region and California move forward from the Aliso Canyon natural gas leak. 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 Blade's 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.

"While we are still reviewing the report released today, we appreciate Blade acknowledging SoCalGas' full cooperation and support.

"Within two days of discovering the leak, we brought in Boots & Coots, the world's preeminent well control company, best known for controlling hundreds of wells during the Persian Gulf War. The leak at Aliso Canyon was stopped on February 11, 2016.

"In the months after the leak was stopped, SoCalGas and state regulators, who worked in consultation with independent experts at the U.S. Department of Energy's National Labs, conducted a comprehensive safety review at Aliso Canyon. That review and safety enhancements SoCalGas completed have been recognized as the most rigorous and comprehensive in the nation.

"The Blade report confirms SoCalGas complied with gas storage regulations in existence at the time of the leak and that the related compliance activities conducted prior to the leak did not find indications of a casing integrity issue. In Blade's opinion, there were measures, though not required by the gas storage regulations at the time, that could have been taken to aid in the early identification of corrosion and that, in their opinion, would have prevented or mitigated the leak.

"We look forward to reviewing the report in detail and to receiving the supplementary reports, so we can better understand the technical basis for some of Blade's conclusions."

This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "contemplates," "assumes," "depends," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "target," "pursue," "outlook," "maintain," or similar expressions or when we discuss our guidance, strategy, plans, goals, vision, mission opportunities, projections, initiatives, objectives or intentions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements.

Factors, among others, that could cause our actual results and future actions to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: actions and the timing of actions, including decisions, new regulations, and issuances of authorizations by the California Public Utilities Commission, U.S. Department of Energy, California Department of Conservation's Division of Oil, Gas, and Geothermal Resources, Los Angeles County Department of Public Health, U.S. Environmental Protection Agency, Federal Energy Regulatory Commission, Pipeline and Hazardous Materials Safety Administration, states, cities and counties, and other regulatory and governmental bodies in the U.S.; the success of business development efforts and construction projects, including risks in: (i) obtaining or maintaining authorizations; (ii) completing construction projects on schedule and budget; (iii) obtaining the consent of partners; (iv) counterparties' ability to fulfill contractual commitments; and (v) the ability to realize anticipated benefits from any of these efforts once completed; the resolution of civil and criminal litigation and regulatory investigations and proceedings; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow at favorable interest rates; deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; denial of approvals of proposed settlements; delays in, or denial of, regulatory agency authorizations to recover costs in rates from customers or regulatory agency approval for projects required to enhance safety and reliability; moves to reduce or eliminate reliance on natural gas; the availability of electric power and natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, limitations on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures; changes in energy markets; volatility in commodity prices; weather conditions, natural disasters, accidents, equipment failures, computer system outages, explosions, terrorist attacks and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance; cybersecurity threats to the energy grid, storage and pipeline infrastructure, the information and systems used to operate our businesses and the confidentiality of our proprietary information and the personal information of our customers and employees; changes in capital markets, energy markets and economic conditions, including the availability of credit; and volatility in currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility; the impact of federal or state tax reform and our ability to mitigate adverse impacts; and other uncertainties, some of which may be difficult to predict and are beyond our control.

These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov. Investors should not rely unduly on any forward-looking statements. These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.

Sempra South American Utilities, Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utility, Oncor Electric Delivery Company LLC (Oncor) and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies as the California utilities, San Diego Gas & Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra South American Utilities, Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utility, Oncor and IEnova are not regulated by the California Public Utilities Commission.

SOURCE Southern California Gas Company