1. San Fernando Valley Business Journal • January 11, 2016SPECIAL REPORT ALISO CANYON
ith thousands of
residents displaced
and small busi-
nesses 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 relo-
cated thousands of residents to temporary
housing after numerous complaints of nose-
bleeds, 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 hous-
ing accommodations and are working with a
dozen relocation agencies that specialize in
this area to help us provide those accommo-
dations 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 execu-
tive 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 cer-
tain 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 lis-
tening 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 annexa-
tions 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 pro-
posed 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. ofAustin,
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 ter-
ritory to the city of Los Angeles for residen-
tial 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
IN THE HOLE
W
Porter Ranch businesses
struggle with lack of
customers as smell from
Aliso Canyon gas leak
lingers with no end
in sight.
Deep Rescue: Drilling derrick for SoCal Gas well to plug leak in Aliso Canyon.
By CHAMPAIGN WILLIAMS Staff Reporter
Please see page 10
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2. ➼
By CHAMPAIGN WILLIAMS
Staff Reporter
M
ore than 2,200 Porter Ranch resi-
dents have been temporarily relo-
cated, hundreds have reported
severe headaches and nosebleeds and a
handful of lawsuits have been filed against
Southern California Gas Co. – all in
response to the Aliso Canyon storage facility
gas leak. Leading the way on legal action
against the utility is R. Rex Parris, mayor of
Lancaster and chief executive of R. Rex
Parris Law Firm in Lancaster. Parris’firm
filed a class-action suit against SoCal Gas
in early December, and is simultaneously
working with residents to bring personal
injury claims against the company in hopes
of recovering damages for homeowners on
an individual basis.
The gas leak was discovered by SoCal
Gas on Oct. 23. Since then, the company has
worked alongside city officials and state reg-
ulators to try and seal the leak. The Los
Angeles Department of Public Health and
other regulatory agencies maintain that the
measured levels of chemicals inhaled from
the gal leak pose no significant health risks
to residents at this time. Still, Parris strongly
opposes these results and thinks that the leak
has put residents both physically and finan-
cially at risk. Before recruiting new clients
at a homeowners meeting Dec.17 at
Shepherd of the Hills church in Porter
Ranch, Parris took time to meet with the
Business Journal to discuss the gas leak and
the lawsuits his firm is bringing against
SoCal Gas and parent company Sempra
Energy.
Question: What’s your opinion about
Southern California Gas Co.’s handling
of the Aliso Canyon gas leak so far?
Answer: Deplorably. What they’re doing is
treating it as a PR problem rather than some-
thing that is having devastating effects on
the families that are living here. An example
of that is they’ve clearly been ordered to
relocate these people. So what do they do?
They put ads out saying they’ve relocated
people to the Four Seasons. Well, the Four
Seasons isn’t relocating people. The Four
Seasons is still a gilded cage; you can’t put a
family of four in two rooms for very long
and (think that is) a suitable alternative.
What financial-physical losses would
you say Porter Ranch residents are
experiencing?
The immediate loss is just getting their fami-
lies out and then driving back and forth and
the expenses that come with that. Not being
able to eat in your own home, medical
expenses – these things accrue. These are
hard-working families that have been able to
buy these beautiful homes out here, and this
is their biggest investment. And it’s not
going to be worth nearly what it should be
worth when this is over unless they close
that gas storage.
SoCal Gas said this leak will take a few
months to fix. How do you feel about
this estimate?
It’s going to take three or four months to
plug this well. They like to call it a leak but
it is not a leak. This is a blowout. That thing
is pouring gas into the environment. In fact,
there has never been a blowout of a gas well
this catastrophic in a populated area in
recorded history. So when they talk about
how it’s an inconvenience, they’re guessing.
Nobody knows how bad this is.
SoCal Gas and environmental health
assessors have said the leak poses no
long-term health risks to residents.
What is your take on that?
They’re talking about keeping people sick
for three to four months and saying there
are no long-term health consequences – are
they nuts? I mean, what moron came up
with that?
I saw a lady the other day whose eye was
bleeding, and the doctor said it’s because of
the irritants in the eye, which are the same
things that cause your nose to bleed. You’ve
got people bleeding from their noses and
eyes, and they’re nauseous and having
chronic headaches – where are they coming
up with the idea that these are not serious
conditions? You know, a really bad case of
the flu can kill you and it only lasts a week.
Do you believe this leak will present
any long-term ailments for Porter
Ranch residents in the future?
We are a biological system that has to be in
balance and when you put it out of balance
by being sick for any period of time, parts of
that system will collapse. We are talking
about children who are developing, and we
don’t know what four months of this will do
to their development. And we’re talking about
people who have health conditions; they can’t
afford the burden of this. Their system can’t.
SoCal Gas has reimbursement pack-
ages to supplement residents’ income
and reimburse them for money spent on
food, gas, etc. due to the leak. What do
you say about such accommodations?
They’re putting a Band-Aid on a hemor-
rhage. There is an incredible amount of price
gouging going on now, where you can’t rent
comparable housing. What was available
yesterday for $4,000 is now $8,000. And the
only people I see willing to be accountable
are the lowest of elected officials – like City
Councilman Mitch Englander. He’s doing a
great job. And the school district has stepped
up and quit believing this nonsense that it’s
OK for kids to be sick. But where’s the gov-
ernor? Where’s the president? The state and
federal regulatory agencies have totally col-
lapsed around these things and are just not
there. I guarantee you, if it was their chil-
dren that were sick, there’d be a different
outcome.
Your law firm was among the first to
sue SoCal Gas and Sempra for the
leak. What damages or compensation
do these lawsuits seek?
We’re fighting on multiple fronts. Previously
we had filed the class-action suit, which is to
get them to stop using this facility as gas
storage so we don’t have another blowout.
Right now, what we’re doing here is signing
up individual homeowners and families to
file their individual suits.
How many homeowners do you esti-
mate will participate in the first person-
al injury lawsuit?
We’d like to see 2,000 people in that room,
but we don’t know.
Aliso Canyon Storage Facility has more
than 100 wells. Why do you think this
one blew?
This isn’t the first well that’s going to blow,
nor is it the first problem that they’ve had up
there; they’ve been having problems for
years. It seems that they’re viewing being
accountable as being insurmountable,
because of the enormity of what’s occurred.
You have people trying to pass the buck,
hide the ball, not being willing to step up
and say exactly what happened, why it hap-
pened and what could have been done better.
Do you think the leak was avoidable?
No question in my mind. That well was
drilled in 1954, two years after I was born.
After 60 years, we start breaking down and
the well does, too. It’s a 60-year-old extrac-
tion well and they’re putting high-pressured
gas into it.
Has the leak taken a toll on the busi-
ness community?
Yes. They are all suffering in various degrees,
depending on the business. Go over to the
Town Center, you don’t see anybody. The real
estate people are really suffering, too.
Nobody’s buying and people who were in
escrow drop out, obviously. People who rent,
these houses have become uninhabitable; any
leaser who wants to break the lease and leave
can. Why hasn’t Sempra Energy stepped up
and tried to work with the owners?
What will the legacy of this gas leak
be? How will it affect oil and gas devel-
opment in the future?
In one respect, I think this leak has awak-
ened people to the dangers of having to drill
so deep and having to store this stuff. I think
we may turn the corner and realize that the
risk to the population is too great to justify
doing business as usual if we don’t have to.
This is the year that we’re turning the
corner on alternative energy. You can now
produce electricity with solar panels and you
can store that energy.
I think that might be the silver lining to
this, but it should never have been borne on
the backs of these families and should not be
on their backs for the next three months.
This is a multibillion-dollar company. If they
wanted to help these people, they could.
Lancaster Mayor R. Rex Parris’ law firm leads fight
against well operator Southern California Gas Co.
Clearing Air
R. Rex Parris
Title: Mayor of Lancaster; chief executive
of R. Rex Parris Law Firm
Born: 1952; Palmdale.
Education: B.A., law and society, UC Santa
Barbara; J.D., Southwestern Law School.
Personal: Lives in Lancaster with wife,
Carrol.
PHOTO BY DAVID SPRAGUE
Lawyered Up: Attorney Rex Parris overlooks downtown Lancaster in 2014 file photo.
SoCal Gas, in conjunction with the State
Office of Environmental Health Hazard
Assessment, the Los Angeles Department of
Public Health and additional regulatory
agencies, find that the Aliso Canyon gas leak
poses no long-term health risks to Porter
Ranch residents. The utility monitors the
leak daily, and collectively the agencies
maintain that the toxic levels of chemicals
released into the air are not harmful. To
ensure resident safety, air samples are taken
twice a day both at the leak site and within
the community. Additional statements from
SoCal Gas can be found in the story “In the
Hole” on the facing page.
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3. 10 SAN FERNANDO VALLEY BUSINESS JOURNAL JANUARY 11, 2016
Diego, has operated the Aliso Canyon under-
ground 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 state-
ment 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 ratepay-
er 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 contin-
ues 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 with-
drawn 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 envi-
ronmental 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 coun-
ty 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 set-
ting 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 com-
bating 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 fore-
seeable 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 emer-
gency such as this.
“They were too slow in notifying anyone
of the leak and did not have proper channels
of communications with regulators and gov-
ernment 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 per-
cent 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 leak-
ing 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.”
Continued from page 8
SPECIAL REPORT ALISO CANYON
Plugged In: Councilman Mitch Englander, center, discusses the leak at gas field.
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