Incompetent, Corrupt, or Impotent: How public agencies mishandled the Aliso Canyon disaster in the San Fernando Valley
(recap of part 10: Setbacks between oil and gas facilities and communities are considered. The fight to transition to all-electric buildings continues.)
NEWSOM SIGNS EOs for the ENVIRONMENT BUT NOT FOR ALISO
In his February 29th State of the State address, Governor Gavin Newsom mentioned a deal made with major automakers to build efficient cars. This included an order that state agencies can no longer purchase vehicles from companies which haven’t agreed to follow the state’s clean car rules.
Because of the pandemic, the number of bills under consideration were reduced by the state legislature. Some energy related bills did get passed and signed by Governor Newsom. One was AB 841, which required the California Public Utilities Commission (CPUC) to approve specified electrification vehicle charging applications. It also included programs to fund appliance upgrades for public schools.
Another one bill that many environments found questionable was AB 3163. This bill expanded the definition of what’s considered “biomethane” to include methane that is produced from the non-combustion thermal conversion of eligible biomass feedstock. Opponents contended the thermal conversion of biomass to methane is a costly and ineffective climate solution.
On September 23rd, Newsom announced an executive order calling for a phase out of gasoline-powered cars by requiring that all new cars and passenger trucks sold in California to be zero-emission vehicles by 2035. In addition, medium and heavy-duty trucks are to be zero-emission by 2045 where possible, making California the first state to mandate 100% zero-emission vehicles. Owners of gas-powered cars can continue to own them or otherwise buy or sell used vehicles.
Also included will be actions directed at transitioning the workforce away from fossil fuel industries.
Many environmental groups would like the zero-emission milestone to be met by 2030 by ending fossil fuel infrastructure, increasing the use of clean electricity, phasing out polluting vehicles and appointing strong climate leaders to regulatory agencies. They are also calling out for more actions taken for communities near oil and gas sites because of health and pollution issues, including instituting a 2500 setback. Some environmental organizations such as Food & Water Watch pointed out that these measures were already in the works. That organization took the occasion of Newsom’s press conference to reiterate that more than 1,500 permits for new wells have been issued in 2020 up to that date, on top of the 7,000 permits issued since he took office.
It was mentioned that the executive order didn’t mandate setbacks between oil and gas wells and refineries and communities. Nor did it ban fracking, but said that the state legislature would have to initiate legislation to do so.
ALISO VICTIMS “CELEBRATE” FIFTH YEAR OF BLOWOUT
Every year, residents and environmental activists have gathered in October to mark each year’s milestone in various ways. From park gatherings to press conferences to sit-ins, and even a premiere of a documentary that featured the disaster, the communities near Aliso had planned events to keep the message alive that the continued use of the gas storage facility was a danger to the health and safety of the residents. But in a year that has been unlike any other year, those planning the fifth-anniversary commemoration had to consider socially distanced activities.
The first one took place in a Sacramento suburb outside the house of Governor Gavin Newsom. The goal was to get local press that would reach Newsom with calls to rollback withdrawals and honor his promise to shut Aliso down. Members of local environmental groups were joined by residents from the San Fernando Valley. Sacramento was chosen as the attendees said they had no other choice to “confront Gov. Newsom’s inaction in person.”
The rally featured residents from north San Fernando Valley communities and other parts of Los Angeles, Food & Water Action, Save Porter Ranch, Aliso Moms Alliance, Mothers Out Front, Breast Cancer Action, Rootskeeper, 350.org, and Live from the Frontlines.
At the destination, Porter Ranch photojournalist Hannah Benet set up her popup project entitled “Aliso Stories.” One by one, the residents’ portraits were held up and their stories were recited.
The second event took place in downtown Los Angeles. A car caravan paraded down the streets until they reached the headquarters of SoCalGas, and joined another group who had walked from Pershing Square. Once again, portraits of affected residents were held up and their stories told.
The onsite managers at the Aliso facility were contacted by their main office. They arranged for a LAPD roadblock at Sesnon and Tampa, just in case the caravan would continue on to the Porter Ranch area, a 31-mile car trip away.
The final event of the week was a webinar on the actual anniversary date, October 23rd, to recap the previous events as well as to feature speakers who would discuss why the facility needed to be shut down. Among the speakers were Alexandra Nagy, the California director of Food & Water Watch, state senator Henry Stern, Save Porter Ranch’s co-founders Matt Pakucko and Kyoko Hibino (the Save Porter Ranch website), Dr. Loraine Lundquist, who’s a sustainability instructor at CSUN, attorney Patricia Oliver, and many of those involved in the fight against SoCalGas.
This event was sponsored by Food & Water Action, the Aliso Moms Alliance, the Center for Biological Diversity, Save Porter Ranch, and the Sierra Club/Angeles Chapter.
Among the topics discussed were the history of the disaster, other SoCalGas storage facilities, the upcoming health study, and the increase of withdrawals in the past couple of years.
In addition to the planned events, some elected officials also acknowledged the fifth anniversary. Besides Stern’s press release, US senator Dianne Feinstein, and congressmember Brad Sherman also called for the closure. There was no such acknowledgement from the local city council member John Lee nor Congress member Mike Garcia, whose district includes the facility.
The Los Angeles Daily News published a five-part series that week, including this article regarding the health crisis caused by the gas storage site.
UPDATE ON CPUC INVESTIGATIONS
In part 4 of my series, I discussed the two investigations into the Aliso disaster opened by the CPUC just about six weeks after the root cause analysis came out. The first one (I.19–06–014) concerned whether the safety culture of SoCalGas and its parent company Sempra Energy fostered a workplace culture that contributed to the blowout. The second one (I.19–06–016) concerned whether SoCalGas should be sanctioned for causing the blowout to happen.
From the beginning, SoCalGas tried to keep the Blade Energy report from being used in both OIIs.
For the investigation into the safety culture, in October 13, 2019, the Safety Enforcement Division (SED) of the CPUC was authorized to hire an expert consultant to assist in the investigation. SoCalGas will be responsible for the costs.
Much of the discussion in the docket during June and July 2020, centered around whether SoCalGas can use a memorandum account to help with tracking the costs. One organization, The Utility Reform Network (TURN), questioned whether SoCalGas should be able to handle the costs this way, and that SoCalGas shouldn’t be allowed to recover their expenses. But the Administrative Law Judge (ALJ) allowed SoCalGas to use an account, but only for the consultant’s costs.
The next ruling in July centered around two issues. First, it described the role that Sempra Energy played in overseeing its subsidiaries (which include SoCalGas and SDG&E), but added that the company doesn’t supervise the day-to-day operations of its subsidiaries. In the initial stage, though, the Sempra organization, policies and accountability will still be examined.
Regarding the second issue, SoCalGas wanted the root cause analysis to not be used in the proceeding, claiming that doing so “would be duplicative and prejudicial.”
The CPUC’s response was that the utility’s argument went too far, “particularly when it demands that the Commission’s consultant not even consider the Blade Report.” It ruled that “the Aliso Canyon gas leak (and SoCalGas’ responsibility for and response to that leak) is certainly relevant in any consideration of SoCalGas’ safety culture, and barring the Commission’s consultant from even considering a report on that leak only serves the interest of SoCalGas, not the public or the record of this proceeding.”
As for the next steps, there should be a prehearing conference and the consultant’s report will help determine the scope of the next phase.
The final ruling of the year came on December 17 when the statutory deadline was extended to December 31, 2021.
For the investigation into whether SoCalGas should be sanctioned, the SED issued an opening testimony, listing 330 violations. This was near the end of 2019. The gas company responded on December 13, 2019, to refute the testimony. The utility was also trying to get out of complying to the Safety and Enforcement Division (SED) subpoena that was issued on October 22.
But the ruling on December 30, 2019 denied the gas company’s motion to quash the subpoena. And in late January, SoCalGas was told to comply with the request.
Blade Energy presented a slide presentation for the investigation in 2019, referring to the many casing failures, “historically, most of the well work at Aliso was reactive in response to corrosion or other problems identified by routine surveillance. Well integrity issues were becoming more frequent.”
On January 14, 2020, SED argued that the Bruno Declaration (by Ken Bruno, the lead SED investigator) should not be stricken and that the facts in the statement were important. The CPUC’s ruling stated that the SED needed to prove that the declaration was admissionable, but did say the SED could try to get the declaration into the record.
Over the course of 2020, SED and SoCalGas traded motions regarding subpoenas.
Evidentiary hearings were delayed due to the COVID crisis as well as the deadline for the proceeding. In October the ALJ’s announced that the hearings will take place sometime during the first quarter of 2021.
On November 17, 2020, SoCalGas submitted a motion to dismiss violations concerning lack of cooperation with the SED investigation, including refusing to produce two Boots and Coots employees and refusing to release pages of communications.
The SED responded that the gas company’s ploy was part of a “vexatious and abusive pattern of behavior in an attempt to stretch the regulator’s resources.” The CPUC administrative law judge ruled in favor of the SED’s motion regarding witnesses.
SoCalGas tried again in February to have some of the alleged violations dismissed. But that motion was denied as the CPUC felt there were issues “that can be best explored through evidentiary hearings.”
A status conference was set in late February to be “a dress rehearsal for evidentiary hearings” that will begin in mid-March.
UPDATE ON CIVIL LAWSUITS
The first lawsuit filed against SoCalGas, Gandsey v. Southern California Gas Co. et al., case number BC601844, was filed a month after the blowout began. Since then, many other plaintiffs filed suit that were consolidated into one main civil case, JCCP4861. Besides residents, local businesses, and fire fighters had also filed in LA Superior Court. A separate case was also filed by shareholders in a “derivative” lawsuit.
As noted in part six of this series, Judge Carolyn Kuhl ruled against SoCalGas for playing games with discovery.
That pattern seemed to have continued as there were many motions filed about the requested documents. In March 2020, the judge told the defendant’s lawyers to re-serve privilege logs, as the February logs were “unreliable.” This included another fine levied toward SoCalGas and their attorneys.
On May 26, 2020, the Plaintiffs’ lawyers told the court that SoCalGas had continued to abuse the discovery process.
Then on August 5, 2020, a ruling went against the plaintiffs when the judge quashed a subpoena for AQMD governing board chair William Burke because he would be considered an “apex witness.” According to the American Bar Association, it’s considered a general rule that in California court that agency heads and other top government executives are not subject to deposition without compelling reasons, such as having unique first-hand knowledge of the facts at issue, and that other means of discovery have been exhausted.
In the SoCalGas lawsuit, plaintiff lawyers needed to show that the Burke had direct personal factual information regarding the 2016 abatement agreement and the settlement between the AQMD and the gas company the next year, and that the information that would be gain from the deposition is not available through any other source.
Sometime between August and December, the civil case was transferred to a different judge.
Plaintiffs did receive some good news on January 6, 2021. The new judge Daniel Buckley ruled that the plaintiffs may be able to recoup damages received from SoCalGas and Sempra due to the blowout. To obtain punitive damages, a plaintiff must prove “by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice,” according to the Civil Code.
Plaintiffs have presented evidence about Defendants’ approach to the management and operation of SS-25 at Aliso Canyon. These alleged facts, if proven, support findings of (1) willful failure to undertake meaningful safeguards in a conscious disregard of their safety obligations under the Public Utility Code, (2) blasé attitude toward well containment after the blowout, and (3) misrepresentations aimed at securing its own financial and reputational interests to the detriment of Plaintiffs’ health and well-being.
In a press release by the R. Rex Parris Law Firm, attorney Patricia K. Oliver said the jury trial might begin in August or September of this year.
One twist in the civil lawsuit regards one of the law firms for the plaintiffs. Girardi Keese (GK), whose slogan is “We treat our clients like family.” This firm, which was founded in 1965, handled about a fourth of the cases in the Aliso mass tort, either on a sole basis or jointly with the Frantz Law Firm.
Probably the best known of the partners, Tom Girardi had made a reputation for himself by working on several high-profile cases including the one against Pacific Gas & Electric that was made famous because of the movie “Erin Brockovich,” as well as suing the LA Dodgers on behalf of Bryan Stow, who had been attacked after a game. A March 2021 LA Times article painted Girardi as a “mover and shaker” who expected favors in return for the candidates he helped, including considering his recommendations of lawyers he wanted to be appointed to judgeships.
But in recent years, successful litigants reported not receiving their full award. One such case involved the 2018 airplane crash with $2-million that somehow went missing. Another case of a settlement not fully being passed on was in 2019. The victim of the 2010 San Bruno gas pipeline explosion filed a lawsuit against GK claiming he hadn’t received all the money owed to him. There were accusations that Girardi had embezzled the money received for these suits to help pay for a lavish lifestyle, which included private jets, multiple houses, and a $250,000 Lamborghini, per Statesattorney.org.
The charge of misappropriation of the Boeing settlement money led to a federal judge issuing a contempt judgement against both Tom Girardi and his law firm on December 14, 2020, as well as referring the case to the U.S. Attorney’s office.
Another part of GK’s financial problems was due to taking out many litigation financing agreements. In these types of loans, an investor advances money to a party to pay lawsuit expenses. In exchange, the borrower agrees to give the investor a portion of his proceeds from the litigation, according to the National Law Journal. Some plaintiff lawyers use outside financing to help when combating corporations that have deep pockets for their defense.
The National Law journal article added that court papers have indicated that Girardi used potential fees from the Aliso case as collateral, based on the possibility that settlements arising from the upcoming civil trial could gross $1 billion. He is facing a $6.2 million judgement regarding these loans per statesattorney.org. Three of his partners are asking for punitive and compensatory damages against him, too.
Just as the contempt charge was being brought up, the firm had to declare Chapter 7 bankruptcy. Girardi’s brother claimed Tom Girardi is suffering from cognitive issues and is incapable of understanding the depths of his troubles. According to an LA Times article, Robert Girardi says his brother’s short time memory loss has resulted in a lack of understanding of his financial and legal troubles.
All these troubles have led to a dissolution of the GK law firm. As with other law firms that shuttered, a letter is to be sent out to clients informing them of their options, according to Leadingedgelaw.com. Because some of GK’s Aliso cases were jointly represented by Frantz, one of the options that should be in any such communication would be to continue with Frantz as the sole representation. Clients can also transfer their case to another law firm. The trustee in the bankruptcy case had agreed to have Frantz take over the joint representation as that firm was already familiar with the Aliso lawsuit.
But one firm Abir Cohen Treyzon Salo, also known as ACTS, claimed it had reached an agreement with GK on November 16th to assume responsibility for the Aliso clients, and in January started contacting those plaintiffs. According to Law.com, ACTS had an $11-million judgement against GK in connection with the San Bruno gas pipeline explosion in 2010.
The trustee for the bankruptcy case filed a lawsuit against ACTS, accusing that law firm of sending mass emails in January to former GK clients involved in the Aliso civil case. In the emails is a link to a retainer agreement for being represented by ACTS. The trustee in her lawsuit claimed that GK may have signed an agreement with ACTS “under duress.”
One of the founding partners at ACTs said that the solicitation was sent only to those represented solely by GK, and not jointly by GK and Frantz. But after one client, who is just with Frantz, but still received the email, had forwarded it to her lawyer, Frantz sent emails informing its clients that communications by ACTS, claiming they are taking over GK’s cases, weren’t exactly kosher.
The bankruptcy judge Barry Russell ruled the trustee handling the bankruptcy was within her rights to reject the idea of ACTS actively going after clients in this fashion. ACTS will not automatically take over GK’s Aliso cases, but will be able to keep any clients it had already retained. Russell ordered ACTS to “cease any future negotiation” with the plaintiffs who were represented jointly by GK and Frantz, and “make no further solicitations to any of the clients of Girardi”, whether they were previously represented by GK, or both firms, according to the Daily Journal.
THE PATH TO CLOSING DOWN ALISO CANYON
The 2017 Integrated Energy Policy Report, 17-IEPR-01 was issued to address several issues, including the reduction of greenhouse gas emissions and the implementation of the Clean Energy and Pollution Reduction Act. Unfortunately, much of this report touted the use of “renewable gas.”
Months before this document came out, the CPUC had been told by then governor Jerry Brown to start planning for the closure of the Aliso facility within ten years. But this document seemed to backtrack on that deadline.
This document had a redacted paragraph about Aliso and the plans to close it under the Energy Reliability Concerns in Southern California section. The Energy Commission Chair had written to the CPUC president on July 19, 2017, “With the state’s climate target in mind, Governor Brown has asked me to plan for the permanent closure of the Aliso Canyon natural gas storage facility, and I urge the CPUC to do the same.” But the next section was crossed out: “As California begins to plan for the possible closure of the Aliso Canyon natural gas storage facility over the next 10 years, it must also consider the long-term role of natural gas as California seeks to continue ratcheting down its greenhouse gas emissions.” Does that reduction mean that the agency was considering pushing back that deadline?
The 2020 Integrated Energy Policy Report Update stated, “California laws and executive orders mandate that the state’s energy system must quickly transition away from fossil fuel combustion and towards zero and near-zero emission fuels and technologies, while protecting consumers and ensuring disadvantaged communities benefit from this transition.”
SoCalGas’s submission for the “electricity and natural gas” docket in October 2020 referred to its hope that the CPUC will allow more capacity at Aliso. But at a November workshop, the agency announced that capacity wasn’t going to be increased for the time being.
The Aliso facility was not mentioned in the December proceeding.
Five years ago, Order Instituting Investigation I.17–02–002, which would use the information from the IEPRs, was opened to look into whether the use of Aliso Canyon can be reduced or eliminated.
In November 2019, Governor Newsom sent a letter to the CPUC asking for the agency to work out closing the facility. As a result, the CPUC issued a phase 3 scoping memo the next month. The purpose of this next phase was the hiring of a consultant to look into scenarios such as the use of storage, demand, and gas pipelines with the idea of replacing the Aliso site in 2027 (the ten year period that the previous governor had requested) or 2045 (the deadline established in 2018 for meeting the SB-100 goal). The contractor hired was FTI Consulting Inc.
Last summer the statutory deadline for the OII regarding reducing the use or closing Aliso was extended to February 11, 2022. In the meantime, Phase 3 opened in December 2019 to examine Aliso Canyon can be eliminated in 2027 or 2045. Part of the process was hiring an expert consultant. Despite SoCalGas efforts, the CPUC decided to keep the capacity to 34 Bcf or lower. The utility referred to a ruling issued in July 18, 2018, which stated that the facility was safe to operate. This was just ten months before the Blade report came out, to justify an increase.
At a prehearing conference held in February 2021, counsel for the gas company kept pushing for a final ruling on the second phase of the OII to be issued sooner than later, with the hope of getting an increase for capacity to be approved.
During this hearing, SoCalGas was trying to justify increasing the capacity by pointing out the problems that Texas had during its recent extreme weather condition. The director of Protect Our Communities said that SoCalGas was inappropriately bringing up the Texas situation as for pushing the Commission to increase capacity, saying what happened in that state makes the opposite point.
The former president of the Porter Ranch Neighborhood Council, Issam Najm, who is a party to the proceeding, brought up that the report under consideration lacks any discussion about the impact of Aliso on the local community’s health and safety.
Given that CPUC doesn’t seem to be in any state of urgency about shutting down the gas storage facility, community members and environmental activists need to continue to keep pressure on regulators and elected officials to commit to closing down Aliso right away as well as transition the state to 100 per cent carbon free energy use.