With Porter Ranch-area leak halted, gas company prepares for the legal battles

California Atty. Gen. Kamala Harris has brought legal action against Southern California Gas Co.

Feb. 13, 2016 2 AM PT

The L.A. County district attorney slapped it with criminal charges. Los Angeles city and county officials filed accusations of ill-prepared crews and public injury. The state attorney general added claims of irreparable environmental damage. And the local air pollution agency alleged negligence in constructing the Aliso Canyon gas facility in the first place.

As Southern California Gas Co. appears to have sealed the noxious leak that has displaced thousands of Porter Ranch-area residents, its legal battles with various government agencies continue to stack up.

Experts said the litigation could have a large-reaching impact on the way the larger gas industry does business in the future.

“These lawsuits are going to serve as a wake-up call, not just for SoCal Gas, but other gas utilities around the state that the government oversight is there and willing to take legal action,” said Richard M. Frank of the California Environmental Law & Policy Center at UC Davis. “It reflects both the volume of the natural gas releases and the collective impatience with this public agency.”

Gas company officials say they’re prepared for the financial cost of litigation. The company is insured in excess of $1 billion, according to a filing with the U.S. Securities and Exchange Commission.

The utility said the leak so far has cost it nearly $300 million, according to the SEC documents.

Southern California Gas has declined to discuss details of individual lawsuits.

“We are reviewing all of these lawsuits and will allow the judicial process to take its course,” said utility spokeswoman Kristine Lloyd. “Today, our focus continues to be on working hard to stop the gas leak, mitigate the odors associated with the leak as quickly as safety allows and address our neighbors’ concerns.”

The suit brought by city, county and state officials alleges the 80,000 metric tons of methane that have escaped the storage field since October have endangered the public’s health and set off a sequence of statewide environmental harms that will linger for years. Atty. Gen. Kamala Harris included in the filing her client the California Air Resources Board, which acts as the guardian of the greenhouse gas issue.

Though the full extent of the leak’s damage is unknown, officials with the board estimate the climate impact to be equivalent to having 500,000 cars on the state’s roads and highways for a year.

“Against the backdrop of California’s ongoing efforts to reduce GHG emissions generally, this gas leak is a monumental environmental disaster,” the lawsuit said.

The complaint filed by the South Coast Air Quality Management District makes similar claims against the gas utility, as well as allegations that the Aliso Canyon facility was poorly designed and constructed and that the utility failed to properly inspect and oversee the site’s operations. The agency also requested hefty civil penalties that increase with each day the leak is not repaired.

“You’re really looking at a function of deterrent, that the government wants this to be so expensive that this company and others are going to take such exceptional care in their operations that this never happens again,” said David Pettit, an attorney with the Natural Resources Defense Council. “And if there’s any way for them to work faster and harder, these lawsuits will incentivize them to do it.”

In addition to the government claims, at least 67 civil lawsuits — including a class action and mass toxic torts — have been filed against Southern California Gas by residents who temporarily relocated away from a community where headaches, nosebleeds and dizziness are standard symptoms.

“It’s an additional element of comfort, I think, for the residents to know that the government agrees that there were wrongs committed by the gas company that have hurt them,” said attorney Robin Greenwald, who represents plaintiffs in cases against the gas utility.

Greenwald previously worked on cases related to the 2010 explosion of the Deepwater Horizon oil rig. Local and state government lawsuits filed against British oil company BP were rolled into one case after the federal government stepped in. Public and private attorneys ended up working together.

When BP agreed to pay $20 billion in civil penalties, it ended claims from five state governments and more than 400 local governments and agencies. That was in addition to the $4 billion the company was forced to dole out in criminal fines and restitution, as well as an additional massive payout that went to cleanup efforts and to residents and businesses.

“It was those Justice Department lawsuits that drove the legal proceedings and were the most important cases in terms of establishing criminal conduct and obtaining federal fines,” said Frank, of UC Davis.

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It is likely to take years for the government litigation to be sorted out. In 2010, a Pacific Gas and Electric pipeline ruptured in San Bruno, killing eight people. It wasn’t until 2014 that federal prosecutors charged the utility with obstruction of justice. Later that year, state regulators proposed PG&E pay a record $1.4-billion fine.

Some Porter Ranch residents note that the government’s legal involvement does nothing to allay the pain that has already been inflicted and the damage to property values.

Resident Maryam Sadeghi, 51, has sued the utility, but said she sees little use in government-led legal fights in which the benefit is far into the future.

“What good is a lawsuit at the end of the day?” she asked. “What good is it going to do for the people of Porter Ranch?”

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