A potential natural gas shortage that could develop later this year due to a lack of storage capacity following the Porter Ranch gas leak could hamper the five Los Angeles area refineries that make gasoline.
The manufacturing process for gasoline that fuels our cars, trucks and airplanes relies on natural gas, said Gordon Schremp, the energy commission's senior fuels specialist. Refineries use natural gas to heat boilers that create steam, to heat crude oil, to run power plants, and create the hydrogen used to make cleaner fuels.
The commission has been gathering confidential data from large natural gas users and compiling it for public examination at the workshop.
"We want to see how much they're using and what portion is that of the total supply in the basin," Schremp said.
Southern California Gas Company has been barred from injecting new supplies of natural gas into its massive Aliso Canyon gas reservoir since a well ruptured, creating the nation's largest-ever methane leak. The company bled the contents of the reservoir down to about 15 billion cubic feet — about a three day's supply at peak demand. That gas is being held in reserve for an emergency that potentially threatens the energy reliability of the Los Angeles and Orange County area.
Without the buffer of a large backup supply of gas waiting in storage, big users of natural gas including refineries are strategizing how to stretch the supply that they can receive over SoCal Gas' distribution network of pipes.
The Western States Petroleum Association issued the most dire warnings about potential gas and electrical outages stemming from the continued shutdown of the Aliso Canyon gas storage field.
"Service outages, whether gas or electric , will have significant economic consequences and, in some cases, further risk public safety," wrote WSPA President Catherine Reheis-Boyd in a letter to the commission in April.
Sixty percent of California's gasoline, diesel and aviation fuel supply is produced in the LA basin, according to WSPA.
The rapid shutdown of a refinery could result in excessive flaring to burn off a petroleum product. It could destabilize refining operations and present potential safety concerns, Rehies-Boyd said. She added that the electric power crisis in January 2001 presented similar risks when power outages caused delays in moving petroleum products through pipelines and interrupted refinery operations.
WSPA wants the state to move quickly to finish safety testing of 114 wells at Aliso Canyon Natural Gas Storage Facility so the region can once again have a backup supply for days when the demand for gas is greater than what is moving through the pipelines. The WSPA also requested that five Los Angeles area refineries be protected from electrical outages or curtailments in gas supplies.
State utility regulators overseeing Southern California Gas call for the company to cut off supplies to big gas users like local power generation plants and refineries if a gas shortage is imminent. Cutting off gas supplies to homes and small businesses would create too much work doing the safety checks necessary to turn all those stoves and furnaces and pool heaters back on.
Some who want to see the underground storage reservoir closed because it is close to homes have said the risk of shortages and blackouts has been overstated by the energy industry in an effort to pressure the state to return the reservoir to normal operations.
Forcing big gas customers to more precisely predict gas usage should reduce the possibility of shortages, said Jamie Court, president of Consumer Watchdog.
"We've changed the protocol so that we have to be more precise in what is ordered," Court said. "The more precise we get the chances of there being any curtailments or blackouts are very minimal."
New state rules that took effect June 1 require big gas users to predict their gas purchases with a greater degree of accuracy, about 5 percent above or below actual usage per day. That's called daily balancing. Previously the goal was was to predict actual usage within ten percent per month.
The margin was generous because the gas system, with Aliso Canyon in full operation, had enough capacity to cover shortages or store extra gas that was ordered. Other parts of the country that do not have the luxury of significant gas storage must keep their estimates within a much smaller percentage.