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Thursday, Oct 6, 2022
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SPECIAL REPORT: In the Hole

With thousands of residents displaced and small businesses suffering from the loss of clientele thanks to a gas leak at Southern California Gas Co.’s Aliso Canyon facility, the upscale neighborhood of Porter Ranch finds itself in a state of economic disarray. The leak was discovered Oct. 23 seeping from a damaged well nearly 8,800 feet below ground. The company has since relocated thousands of residents to temporary housing after numerous complaints of nosebleeds, headaches and abdominal pain from the smell of the gas. Long-term effects of the leak remain unclear. “We are deeply sorry that (residents) have been impacted, and we are continuing to do everything we can to support families who have been affected and to address their concerns,” said Neena Master, director of community relations at SoCal Gas. “We are providing a range of free, temporary housing accommodations and are working with a dozen relocation agencies that specialize in this area to help us provide those accommodations to families.” SoCal Gas estimates the leak will be fixed by late March, which could be an eternity for retailers and service companies in the area. “We have received several complaints from local businesses that have been affected. Some have seen as much as a 20 percent decline in business,” said Rana Ghadban, chief executive of the Chatsworth Porter Ranch Chamber of Commerce. Luxury businesses such as Pets of Porter Ranch and Nail Garden have seen a huge decline in sales, Ghadban said, and some businesses have been forced to temporarily close their doors on certain days of the week to stay afloat. Paula Cracium, president of the Porter Ranch Neighborhood Council, reiterated that service-oriented businesses that depend on repeat customers within the community have been hit particularly hard. “So far we’ve not heard that the big anchors have been greatly affected. The smaller companies are feeling it a bit more, specifically the ones that have regulars and clientele that are no longer here,” she said. On. Jan. 6, Gov. Jerry Brown declared Porter Ranch in a state of emergency. This followed Dec. 15, when the Los Angeles City Council approved an emergency motion that the city’s Office of Finance assess tax-relief options for businesses affected by the leak, including disaster-related deductions. “(The holidays) should be the busiest time of year, but we’ve heard businesses are experiencing a loss of revenue,” said Los Angeles City Councilman Mitchell Englander, who submitted the emergency motion and whose district includes Porter Ranch. “The residents of the San Fernando Valley have suffered too much for too long. I want to thank Governor Jerry Brown for listening and responding to the thousands of residents affected by this catastrophe and for ensuring that the Southern California Gas Company bears the full financial burden.” Housing implications With an estimated three-month horizon until the leak is resolved and uncertainty about whether another leak could occur in the future, the housing market in Porter Ranch has suffered and there’s no guarantee when it will bounce back. Cracium said the neighborhood council is working to ensure the vitality of businesses and property values in the long run, but it has no way of knowing if or how the market will react to such extreme and unfamiliar circumstances. She added that property values have decreased by as much as 20 percent to 25 percent. “In a seismically active community, when there’s an earthquake prices will drop down but the market will always work its way back up. We don’t know the long-term effects (of this leak). If the Aliso Canyon storage facility remains open, how can we determine it to be safe?” she said. Supervisor Michael Antonovich, whose district covers north Los Angeles County, echoed those concerns when he requested the county temporarily prohibit any annexations of its territory by the city of Los Angeles in the northwest region of the San Fernando Valley affected by the gas leak. Antonovich specifically sought to halt a 118-home equestrian community called Hidden Creeks Estates & Preserve that is proposed to be developed on 114 acres of open space north of the 118 freeway and west of Aliso Canyon. The development, by developer Forestar Real Estate Group Inc. of Austin, Texas, went before the city in June and calls for lots between 18,000 and 25,000 square feet. “Until a thorough investigation can take place as to what caused the leak and what safeguards will be put into place to prevent a failure of this magnitude again, it is not appropriate to annex any further county territory to the city of Los Angeles for residential development in close proximity to Aliso Canyon,” Antonovich said in a letter to the head of the county’s Local Agency Formation Commission. Gas field SoCal Gas delivers natural gas to more than 21 million customers throughout Central and Southern California. The utility, a subsidiary of Sempra Energy in San Diego, has operated the Aliso Canyon underground reservoir for 43 years. The facility, located 1,200 feet above Porter Ranch in the Santa Susana Mountains, consists of more than 100 wells that can store up to 86 billion cubic feet of natural gas. The leaking well, SS-25, was originally drilled in the 1950s before SoCal Gas took over the facility. The company has yet to release a statement detailing how the gas leak happened, but some experts believe it was the result of aging wells and the absence of a subsurface safety valve that could shut down the well, as reported by LA Weekly. R. Rex Parris Law Firm reported similar findings. The Lancaster firm, which has attorneys working with residents to sue SoCal Gas, has released a statement claiming the utility had the means to replace the safety valves on its wells five years ago when it received a ratepayer increase but opted not to do so. Many wells at the Aliso Canyon storage facility are devoid of safety valves, according to the firm. “Once the leak is stopped, a complete investigation will help us determine the cause of the leak,” said SoCal Gas’ Masters. “Our immediate focus is stopping the leak as quickly and as safely as possible – once we do so, we will work with regulatory agencies and officials to investigate the exact cause.” Displaced residents It’s estimated that the amount of natural gas that has leaked from the well since October is equivalent to the gas emissions released by 200,000 cars in a year, as reported by the Los Angeles Times. The utility continues to work around the clock to drill a relief well adjacent to the leaking structure. It will pump in cement to permanently seal the well. The company also reported that it has withdrawn more than 40 percent of the gas stored at Aliso Canyon to reduce the pressure as well as the level of emissions and odorants released into the air from the leaking well. In response to the leak, SoCal Gas has provided temporary housing for more than 2,200 families and has received an additional 7,000 claims from residents who have yet to be relocated. Many residents remain anxious about potential health-related risks associated with the leak, especially since there continue to be reports that the strong odor of gas is causing gastrointestinal and respiratory symptoms. However, government agencies and environmental health experts maintain that the leak poses no long-term health risks. The natural gas consists of two primary chemicals: methane and mercaptans. Methane is an odorless and highly flammable gas, while mercaptans are odorants, often smelling like rotten eggs or garlic, that are added to the methane to make the gas detectable. The county Department of Public Health said that the measured levels of chemicals inhaled from the gas pose no significant health risks to residents. “Measurements (of methane) to date in Porter Ranch have been substantially below flammability limits (and) inhalation in this setting at the measured levels does not pose a significant health risk,” wrote Cynthia Harding, interim director of the department, in a report to the county Board of Supervisors. “(However), as the repair efforts will take months to complete, expanded monitoring of emissions is necessary. (The department) will continue to work with regulatory agencies to assess both short-term and potential long-term health effects from these exposures.” SoCal Gas is working alongside the department and other regulatory agencies including the state Office of Environmental Health Hazard Assessment to monitor the chemicals on a daily basis. “None of our air samples have returned readings above levels of concern and we will continue our air sampling program,” said Masters at SoCal Gas. Legal legacy Even as the utililty’s engineers work to seal the leak, the company’s lawyers are combating lawsuits stemming from the incident. Los Angeles City Attorney Mike Feuer announced in December he is suing the utility for what he claims is an inadequate handling of the leak. Feuer claims the leak was foreseeable and that the condition of the well allowed it to fail. This suit follows a group of class-action and personal injury lawsuits filed by Porter Ranch residents and headed by the R. Rex Parris firm. Councilman Englander maintains that the utility acted negligently and should have had a contingency plan in the event of an emergency such as this. “They were too slow in notifying anyone of the leak and did not have proper channels of communications with regulators and government agencies,” he said. “They also failed to have any type of health study available or even conducted in the event that something like this could occur. It shows that they were really caught off guard.” Since the gas leak was discovered Oct. 23, Sempra’s stock price has traded marginally lower. It closed Jan. 6 at $92, down 9.6 percent since the discovery. At this point, the company’s primary goal is plugging the leak as quickly as possible. As of Dec. 29, the utility has drilled the relief well more than 4,000 feet underground and continues with plans to intercept the leaking well at its base at 8,700 feet. “Once we intercept the well, we will pump heavy mud and fluids into the leaking well to stop the flow of gas from the reservoir and into the well,” said SoCal Gas spokeswoman Anne Silva in a statement. “Once the flow of gas has been stopped, we will pump cement into the bottom of the well to permanently seal it.”

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