Aliso Canyon Leak Could cost Gas Co. Billions

The leak at the Southern California Gas Co.’s Aliso Canyon storage facility could cost the utility billions of dollars after wreaking havoc with the lives of residents of Porter Ranch, some legal experts said in remarks published today.

To date, the gas company has spent more than $50 million combating the leak that began Oct. 23, according to a securities filing Thursday, the Los Angeles Times reported. More than 25 lawsuits have been lodged against the utility; “the cost of defending the lawsuits, and any damages, if awarded, could be significant,” the filing stated.

The utility has told the U.S. Securities and Exchange Commission that it had “at least four types of insurance policies that it believes will cover many of the current and expected claims, losses and litigation … associated with the natural gas leak at Aliso Canyon,” which has forced thousands of people from their homes.

Those policies, the utility said, have a combined limit available “in excess of $1 billion.”

But legal experts and lawyers for residents in the Porter Ranch community near the natural gas storage facility argue that $1 billion might not come close to what the utility will need, according to The Times. Part of the reason, they say, is that the company has yet to plug the gas leak.

“I’m unaware of anything of this magnitude that has happened before,” Brian Panish, an attorney for some of the homeowners, told The Times. “There’s no study to know what the long-term effects are. What about some of these children? Do you think people’s homes are going to be worth the same?”

The Gas Co. is a subsidiary of San Diego’s Sempra Energy, which has seen its stock price fall more than 15 percent since the leak was discovered at the facility in the northern part of the San Fernando Valley.

Browne Greene, a former president of the California Trial Lawyers Association, said he believes that Southern California Gas is looking at significant penalties for the ongoing leak.

“I would think that they would be looking at a huge fine in terms of endangering the public,” Greene, who has practiced law for some 50 years, told The Times

Gov. Jerry Brown on Wednesday declared a state of emergency in the Porter Ranch area due to the continuing leak. The order came two days after Brown met with a handful of residents in the Porter Ranch area and toured the storage facility and a relief well.

Brown’s emergency proclamation orders that all viable actions be taken to stop the leak, withdraw natural gas from the facility and develop contingency plans in case a relief well being dug at the site fails to cap the leaking gas.

City News Service