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Aliso Canyon Gas Storage Closure Could Be Model for California’s Energy Future

A proposal to close California’s Aliso Canyon underground storage facility—one of the United States’ largest natural gas storage fields—could be a model for the state’s broader energy transition: as either a positive lesson or a learning experience.

“It definitely could be, and probably should be [a model], if California is successful in reducing the amount of natural gas it relies on and gas storage that it needs,” Seth Hilton, a partner at business law firm Stoel Rives LLP, told Utility Dive. “It’s either a disaster and it’s a model—or it works, and it’s a model.” 

The Aliso Canyon facility maintains the region’s energy stability through its capacity to store almost 2.5 billion cubic metres of natural gas. Six years ago, the site leaked 100,000 tonnes of methane into the air, forcing a temporary relocation of 8,000 households and prompting then-governor Jerry Brown to declare a state of emergency. The California Public Utilities Commission (CPUC) opened proceedings following the leak to investigate whether the storage field could be reduced, or even eliminated, without compromising the region’s energy reliability.

“Part of the challenge is that as California experiences hotter summers due to a changing climate while simultaneously shifting to renewables, its key focus will be on meeting the net demand peak period, which tends to occur later in the evening, [rather] than the total demand peak,” says Utility Dive.

As an additional complication, the storage field is located in the Los Angeles Basin area, which has multiple transmission constraints. And while alternative energy storage facilities could be installed to offset the loss of the field, the charging requirements would still need to be met by importing energy or supplying power through other gas-fired generation facilities.

The original plan to decide whether Aliso Canyon could be closed involved a two-step process of identifying, then evaluating the impacts that would follow from scaling down the field. The CPUC added a third phase in December 2019 to identify the resources and infrastructure that would be required to replace the field, explains Utility Dive. A ruling in July from the CPUC commissioner expanded “the scope of the commission’s effort to also look at what steps it would need to take if it does authorize closing down the Aliso Canyon facility—including what to replace it with, when to do so, what directions to provide utilities, and how to begin implementing the closure.”

Each scenario offers its own complications, and utilities and other stakeholders have different perspectives on how and when to wean the system from Aliso Canyon. While some say the site’s energy storage is necessary to counter volatilities caused by adding renewable sources to the grid, others counter that promising advances in renewable technologies could help to address those storage needs. 

What many stakeholders do agree on, notes Utility Dive, is that the right answer hinges on a bigger question: what role gas will play in California’s energy transition.

“If the proceeding ends up being an opening to a broader conversation of the nature of the infrastructure, of the gaseous fuels, of the role of renewables, electrification—then that will be beneficial. All of those resources have roles, including storage,” said Jonathan Peress, a senior director at Southern California Gas Company.