Judge approves $119.5 million settlement over Aliso Canyon gas leak

A judge approved a $119.5 million settlement to resolve claims by several government agencies stemming from the massive Aliso Canyon methane leak -- the biggest in U.S. history -- that sent more than 100,000 tons of natural gas into neighborhoods around Porter Ranch.

The settlement resolves claims against Southern California Gas Co. by the city and county of Los Angeles, as well as the state Attorney General's Office and the California Air Resources Board. It does not resolve a still-pending class-action lawsuit involving thousands of residents who said their health and property values were damaged by the leak.

Los Angeles Superior Court Judge Carolyn Kuhl approved the settlement, despite objections by some environmental groups that objected to how some of the money will be spent. The settlement was announced last summer.

SoCalGas issued a statement saying it was "pleased" to resolve the litigation.

"Under the terms of the $119.5 million settlement agreement, SoCalGas will, among other things, reimburse city, county and state governments for costs associated with their response to the leak; establish a program with the California Air Resources Board to mitigate the methane emissions from the leak; and fund local environmental benefit projects to be administered by the government parties.

"In addition to the comprehensive safety enhancements made at the Aliso Canyon storage facility, SoCalGas also agreed to continue its fence-line monitoring program and hire and independent ombudsman to monitor and report on safety at the facility."

The gas leak, which was discovered at the underground storage facility in October 2015 and continued emanating methane until February 2016, poured an estimated 109,000 tons of methane into the air. Thousands of residents were forced out of their homes for months due to the leak.

Limited operations resumed at the facility in late July 2017 with the blessing of state regulators. Efforts by Los Angeles County officials to block the resumed operations failed in court.

In 2017, SoCalGas reached an $8.5 million settlement with South Coast Air Quality Management District over the leak, which included $1 million in funding for an SCAQMD-sponsored health study on the impacts of the leak, although county health officials said that $35 million to $40 million would be

needed for an adequate study.

Government officials said last year the latest settlement includes $25 million for a long-term health study. The settlement also precludes SoCalGas from passing along the costs of the litigation to its ratepayers.

The settlement agreement has been criticized by some Porter Ranch-area residents, who have been pressing for the complete closure of the Aliso Canyon storage facility. Some residents have claimed they are continuing to suffer negative health impacts due to emissions from the facility.

Some environmental groups also objected to the settlement, in part because $26.5 million of the amount will be used to develop a process of collecting methane produced by cows at dairy farms in the San Joaquin Valley and converting it into energy.

The California Air Resources Board issued a statement calling dairies "the largest source of California's methane emissions." According to the board, the money being used for the methane-capture process will be recaptured through "proceeds from sales of the generation of the renewable methane which
will not return to SoCalGas," but will be placed in funds for other air-quality projects in Southern California.

"This agreement will mitigate the methane leak itself, and will have a positive impact across California while providing long-term funding for air quality improvements in the parts of the L.A. Basin most directly affected by what happened at Aliso Canyon," CARB Chair Mary D. Nichols said in a statement.

"The settlement will also provide examples of transformative technology which can be shared around the world, as California pushes ahead with its own efforts to reduce methane emissions and limit the effects of climate change."

CNS contributed to this story.