US power group studies broader Aliso gas question

The US power grid watchdog wants to determine if the shutdown of large underground natural gas storage sites like California's Aliso Canyon could threaten power reliability in other states.

A moratorium on injecting gas at SoCal Gas' Aliso Canyon field near Los Angeles jeopardized 9,800MW of gas-fired generation in the LA basin over the summer.

Now the North American Electric Reliability Corp (NERC) is studying similar threats to supply in New York, Michigan and other states.

This winter, about 20,000 MW of generation in southern California is at risk of being curtailed, according to a winter outlook prepared by several California energy agencies.

"That's unacceptable," said John Moura, NERC's director of reliability assessment, told Argus. "No one knew there was this vulnerability lurking within a non-electrical facility that we don't regulate. Now, we are very interested."

Aliso Canyon is not unique in that its supply of stored gas is essential to maintain electric reliability in nearby communities, a federal task force concluded in October in response to the massive SoCal gas leak that allowed 5 Bcf to escape over four months beginning in October 2015.

Argonne National Laboratory, working with the Interagency Task Force on Natural Gas Storage Safety, identified 11 additional gas storage sites that are needed to serve at least 2,000MW or more of downstream electric generation. The study appears to identify PG&E's 81 Bcf McDonald Island facility in northern California, along with five storage sites in Mississippi; three in Louisiana; one in Michigan and one in New York. DOE declined to identify the other storage fields by name, but said nine were owned by third-party independent storage operators, not pipelines.

The national lab said its findings were preliminary because some affected power plants may be able to burn diesel or other fuel when gas is not available.

NERC is following up with storage operators and regulators in each state to better understand the risk of a short or long-term disruption on the gas side, Moura said. NERC plans to issue a special reliability assessment next year to provide regulators and utilities with a better understanding of electric transmission-level reliability issues.

The experience at Aliso Canyon tells "us that we need to estimate the likelihood and consequences of a long outage of all of the important components of our natural gas infrastructure, whether singly or in combination, and devise appropriate plans to address unacceptable risks," the task force report said. "Given the increasing reliance on gas-fired generation in meeting our electricity requirements, maintaining electric reliability during such outages is particularly important."

The federal task force led by the US Department of Energy (DOE) and the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) developed dozens of recommendations to improve the safety of underground natural gas storage operations in response to the massive Aliso Canyon gas leak.

Aliso Canyon is more than a gas industry issue, Moura said. "It is layers of multiple vulnerabilities that have been embedded in that area's energy profile over many years."

The added risk started when California ended the use of oil as a back-up power generation fuel and increased with the state's reliance on intermittent, renewable solar and wind generation.

The pipeline system is now being used to serve power plants in ways it was not designed to do, Moura said.

Thirty-one wells have passed all state-ordered tests. On 1 November, SoCal sought regulatory authority to resume partial operations, but California regulators will not act on SoCal's request until early next year after nearby residents asked for a delay.

While pipelines are heavily regulated, the natural gas industry has no similar watchdog agency like NERC to enforce safety standards, monitor operation and planning activity and conduct widespread emergency drills.