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Senate Natural Resources and Water Committee Rodger Schwecke Vice President of Transmission and Storage 4/26/2016 3/2/2025
Introduction The Committee requested SoCalGas provide some clarification on the following topics: Considerations in developing SoCalGas Storage Integrity Management Plan (SIMP) Division of Oil, Gas and Geothermal Resources (DOGGR) recent regulatory actions Opportunities to enhance minimum statutory requirements 2
Storage Integrity Management Plan (SIMP) In 2014, SoCalGas proposed in our General Rate Case at the CPUC to expand our existing maintenance, prevention, and compliance program for storage operations, SIMP The purpose of SIMP is to proactively identify and address potential storage integrity issues SIMP goes above and beyond existing regulatory requirements and operational practices, using enhanced natural gas well inspection technologies. The SIMP was proposed as a comprehensive storage well program set to begin in 2016 and extend for 6-years After six-year baseline assessment period of SIMP, it is expected that well assessments performed on a regular frequency would become part of routine operations. 3
Storage Integrity Management Plan (SIMP) Through SIMP, SoCalGas will enhance existing practices to all wells within our four storage fields: Perform risk assessment for each well based on historical data, age and location of well; Assess wells using enhanced technology; Establish an initial condition of each well; Remediate conditions identified during well assessment activities, if any; and Develop enhanced preventative and mitigation measures. 4
SIMP Prioritization Process To guide prioritization of well-inspection, SoCalGas will develop a new risk assessment matrix and data management system that uses existing and new well data that includes the following: Age of well; Proximity to sensitive areas or populations; Workover history; Inspection data; Historical withdrawal rates; Known reservoir and geologic conditions; and Surrounding geologic conditions (fault lines, landslide potential, etc.). 5
DOGGR Regulatory Actions SoCalGas is committed to being a good steward of our environment and to maintaining safety at our facilities for our customers, the communities we serve, our neighbors in the community and our employees. SoCalGas supports the Division s efforts to periodically review its regulations covering underground gas storage facilities. We are committed to working with the Division and other state and federal agencies to identify practices to enhance the safety of gas storage facilities. 6
DOGGR Regulatory Actions The DOGGR Aliso Canyon Safety Testing Regime (Order 1109) and Emergency Regulations are comprehensive in nature and can serve as the first step in establishing new long-term regulations for natural gas storage Aliso Canyon Safety Testing Regime and Emergency Regulations Enhanced well inspection requirements using more advanced tools (Order 1109) Enhanced real-time pressure monitoring Leak inspection protocols Additional valve inspections intervals Update project data requirements including any geological risks Will establish baseline well conditions [Order 1109] and identify any current issues Tubing flow only limitations creates an additional safety barrier during operations [Order 1109] Put in place Risk Management Plans for all storage fields with action plans based on results 7
Opportunities to Enhance Minimum Statutory Standards API RP 1171 provides a risk-based approach to establishing effective minimum statutory standards including: Design and Construction Integrity Demonstration, Verification and Monitoring Practices Risk Management Data Management Threat and Hazard Identification Risk Assessment Preventive and Mitigative Measures Periodic Review and Reassessment Recordkeeping Procedures and Training 8
Opportunities to Enhance Minimum Statutory Standards (Cont d) API RP 1171 risk-based approach requires operators to: Identify potential threats to the storage operation; Assess likelihood of potential severity of occurrences; Implement preventative and mitigative monitoring processes; and Helps to guide the development of additional safety measures. Provides framework for regulators and industry to establish fact-based solutions to guide new regulation and implement best practices Coupled with federal task force and PHMSA initiatives, can form the basis for strengthened State & Federal regulation 9