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California: As Gas Leaks, Pressure for Regulation Builds

Southern California Gas Company’s Aliso Canyon storage facility has been leaking natural gas since October 23, 2015. Company officials have recently announced that a relief well is nearly finished and the leak will soon be plugged. However, for the natural gas industry as a whole, the legal and regulatory challenges have just begun.

California Gas LeaksThe entire natural gas industry may be affected by this leak, as calls for new regulation proliferate. State oil and gas regulators have adopted six new emergency regulations, requiring measures including increased well-head monitoring and pressure limits for gas storage facilities. Additionally, the California Air Resources Board is considering new rules specifically targeting greenhouse gas emissions from the industry. On the federal level, U.S. Representatives Brad Sherman (D-CA) and Steve Knight (R-CA) have each announced plans to introduce bills requiring more stringent regulation for all natural gas storage facilities. Both of California’s Senators, Barbara Boxer and Diane Feinstein, have called for the U.S. Department of Energy to lead an investigation into the leak. Finally, the Pipeline and Hazardous Materials Safety Administration has issued an advisory regarding storage facility safety and is expected to pursue further regulation on the subject.

The Aliso Canyon leak appears to be following the pattern of other environmental mishaps, where the problem leads first to lawsuits and then to regulation. Consider the response to the 2008 Kingston coal-ash spill. That spill unleashed over a billion gallons of coal-ash slurry into two Tennessee rivers. Within a week, local landowners had sued for property damage and soon the whole industry was under scrutiny. Two years later, EPA issued a proposal to regulate coal-ash storage and disposal facilities that was ultimately promulgated.

In the wake of this natural gas leak, the industry should expect increased scrutiny.

© 2020 Schiff Hardin LLPNational Law Review, Volume VI, Number 42


About this Author

Ryan Granholm Litigation Attorney Schiff Hardin

Ryan C. Granholm assists clients with complex compliance and litigation matters involving local, state, and federal environmental rules. He regularly advocates for his clients in a variety of different jurisdictions and venues, from county circuit court, to state administrative agencies, to federal district and appellate courts.

Ryan believes the best lawyers are flexible. He tailors his approach to his clients’ needs and goals—from answering pressing compliance questions to crafting long-term litigation strategies. Employing technical, legal, and negotiation-based approaches, Ryan...

Jane E Montgomery, Schiff Hardin Law firm

Jane E. Montgomery concentrates her practice in a variety of matters at the local, state and federal levels. Ms. Montgomery regularly: Counsels many companies with day-to-day compliance issues, including air permitting, NSPS, MACT, and solid and hazardous waste issues. In her work, she often encounters difficult elemental mercury, manufactured gas plant, and PCB issues, and she recently has focused on Reform New Source Review (NSR) compliance for utilities. Counsels clients with respect to climate change issues. Such work has included work on carbon sequestration issues, greenhouse gas inventory issues, and offset projects. Advises clients concerning audit programs and other environmental management mechanisms. Represents clients in a variety of civil and criminal enforcement actions, including responses to notices of violation or lawsuits, and in pre-enforcement efforts, such as agency requests for information. Represents clients in other Superfund actions, generally at the cost recovery or allocation phases. Counsels clients on "brownfield" redevelopment issues. Successfully represents clients in water matters, including modification of Army Corps of Engineers permits. Experience as common counsel in Superfund matters has figured prominently in her practice. Ms. Montgomery has represented groups of parties alleged to be responsible for environmental remediation in different situations. For example: In Toledo, Ohio, Ms. Montgomery represented an individual client and, later, a group of parties at the Stickney and Tyler landfill sites. Ms. Montgomery represented the common interests of multiple parties in dealing with federal and state regulators and pressed those interests to successful resolution of complex issues. In another joint defense representation, Ms. Montgomery was part of a team defending a similarly situated industry group in a cost recovery action filed in federal court. The matter involved resolution of difficult factual allocation issues. Ms. Montgomery was selected judge for DaimlerChrysler's Environmental Leadership Award Competition in 2002.