SoCal Gas storage field closer to possible return

OREANDA-NEWS. September 12, 2016. California's largest underground natural gas storage field is unlikely to meet SoCal Gas' target for a late summer return even as more Aliso Canyon injection wells pass state-ordered safety tests.

Twenty of 114 active wells at the 86 Bcf (2.4bn m?) Aliso Canyon facility near Los Angeles have passed integrity tests and three more are under review, according to SoCal's latest report to state regulators. California governor Jerry Brown (D) ordered the reports after a four-month leak allowed nearly 5 Bcf to escape from the field beginning last October.

While a moratorium on gas injections at Aliso Canyon continues, SoCal has conducted flow tests to determine the withdrawal capacity of wells that have been reconfigured to meet new emergency regulations from the California Department of Conservation's division of oil, gas and geothermal resources (DOGGR). Wells that return to service can only flow gas through inner metal tubing rather than from the tubing and the well casing.

Aliso Canyon's future has become a political issue in a state that is pursuing aggressive climate change initiatives. The leak has prompted public calls to shut the field permanently and regulators have increased scrutiny of all California gas storage operations.

SoCal is still working to confirm whether operators can draw as much as 420mn cf/d from the field if needed to reduce the risk of a gas curtailment that might lead to electric blackouts under a June order from the California Public Utilities Commission (PUC).

On 25 August, the PUC ordered SoCal to provide daily reports as wells are removed from service and to "provide the estimated date at which the available withdrawal capacity will reach 420mn cf/d."

Regulators have yet to determine how much more gas may be needed this winter for emergency withdrawal as gas demand swells to heat homes and businesses as well as to produce electricity. Aliso Canyon's pre-leak injection and withdrawal capacity was 600mn cf/d and 1.86 Bcf/d, respectively.

SoCal Gas officials plan to ask regulators to certify that the field is safe to operate before 1 October, but that process includes a public hearing and may take weeks. SoCal also said it hopes to add as much as 30 Bcf into the field before year-end, a task that could become more difficult as winter gas burn climbs.

Under normal weather conditions, SoCal should be able to meet daily gas demand by increasing gas receipts into its pipeline system and drawing gas from its smaller storage fields.

On the coldest days, however, SoCal will not be able to meet the expected 5.2 Bcf/d of system demand without pulling gas from Aliso Canyon, according to winter reports prepared by the staff of the PUC, the California Independent System Operator (ISO) and other agencies.

More than two-thirds of Aliso's wells, 79, have been plugged and temporarily isolated from the gas reservoir which holds just 15 Bcf. The report said 11 wells failed initial tests, up from eight wells in the previous report.

The PUC said SoCal could begin to remove from service a group of 17 wells that were kept available for emergency withdrawals. Test results are pending on 15 wells.

Electric output from gas-fired generation in California fell by 20pc this summer compared to last year, the US Energy Information Administration said this week, even as overall electric consumption rose by 2pc on hotter weather. Generation from solar, wind, hydropower and power imports increased this summer.

Utility-scale solar capacity grew by 27pc or 1.4GW, in June 2016 from a year earlier, the EIA said. As solar output fades, gas-fired generation is critical to meet California's peak-hour power demand.

The EIA report did not include the growing impact of the ISO's eight-state Western Energy Imbalance Market that allows abundant California renewable output to be exported rather than curtailed.

Real-time power transfers in the second quarter reduced the need to curtailment renewable output by nearly 158,000MWh, five times the 2015 total, according to the ISO. The imbalance market reduces the need to run more expensive gas-fired generation to respond to fluctuating power demand.