Canyon Questions

Issue 7 and Volume 120.

By Brian Schimmoller, Contributing Editor

What comes to mind when you hear “Aliso Canyon”? Anything at all? For those of you in California (and those of you who closely follow the natural gas industry), I’m sure it rings a bell. For those of you more partial to nuclear power, it might not mean a thing.

Alison Canyon – the fourth largest underground natural gas reservoir in the U.S. – sits just north of Los Angeles, and supplies gas to nearly 20 gas-fired power plants serving the LA Basin. In October 2015, one of the wells at Aliso Canyon ruptured, triggering what turned out to be the largest atmospheric release of methane in U.S. history. Almost 100,000 metric tonnes of methane were released over four months, leading to the evacuation of 5,700 families and the declaration of a state of emergency.

The state determined that the safety significance of the event warranted a halt to natural gas injections into any of the 114 wells at the facility until detailed inspections could be performed. In April 2016, a report issued by the California Energy Commission, California Public Utilities Commission, California Independent System Operator, and Los Angeles Department of Water and Power indicated that the region could face up to 14 days of gas shortages this summer, potentially interrupting electrical service to utility customers.

Some have questioned the justification for these warnings – to the point of even suggesting that Aliso Canyon’s operator, Southern California Gas Co., was highlighting the potential for blackouts in an attempt to pressure the state to resume injections. As I write this column, it’s too soon to know whether any blackouts will occur, but the whole scenario paints some interesting corollaries with nuclear power.

  • Scientific reality is not the same as political reality: An article on the KPCC web site examined the impact of the Aliso Canyon outage on natural gas-fired power plants. One of the people interviewed, Fred Fletcher, a manager at Burbank Water and Power, bemoaned the non-scientific approach to the ongoing restrictions on natural gas injections: “We’ve only had one well fail. What we didn’t anticipate was…policy makers wanting to shut it all down at once instead of taking it one at a time.” Certainly not a surprise to those of us who have followed the Yucca Mountain debate. Science can fall pretty far down the list in terms of critical decision factors in such a publicly-charged situation.
  • Diversity is easier to talk about than to implement: Nuclear proponents have been trying for several years to draw attention to the importance of fuel diversity to the electric power grid. In 2014, for example, the industry deservedly patted itself on the back for its reliability during the Polar Vortex, when many coal and natural gas facilities were shut down or curtailed because of physical fuel access limitations. More recently, in public efforts to save nuclear plants from premature shutdown, nuclear plant owners have questioned the wisdom of putting too many natural gas eggs in the proverbial basket. To date, however, these exhortations to retain fuel diversity have not found a viable policy partner. The abundance of low-cost natural gas continues to drive coal (and nuclear in some cases) out of the market, further increasing reliance on gas and the potential risks of fuel unavailability.
  • Flexibility is not the same as reliability: Natural-gas fired power plants are undeniably flexible. Their ability to quickly flex up and down and to start up and shut down over short durations make them an incredibly valuable part of the dynamic power grid. This flexibility, however, is not the same thing as reliability. Yes, certain steps can be taken to improve reliability. System operators can impose requirements (or penalties) related to the firmness of supply contracts, and gas-fired power plant owners can potentially store more fuel on-site or convert to dual-fuel operation. These things cost money, of course, so their degree of implementation is not uniform. Meanwhile, the nuclear industry continues setting reliability records.

The energy industry is often framed in terms of winners and losers. It’s predominantly a shareholder-based industry, so yes, decisions will always have to be made regarding which investment option provides the greatest opportunity for shareholder value. But to me, electric power is more fundamentally a system, and getting the right pieces to work together in the most effective way possible should have a comparable level of importance.

In the end, California and its residents will have to live with the consequences of the Aliso Canyon accident, blackouts or not. But wouldn’t it have been nice if the San Onofre Nuclear Generating Station had been available this summer?