US to impose new rules to limit natural gas storage leaks

(Reuters) The US government will impose new federal rules to reduce the risk of leaks at natural gas storage facilities in the wake of last year's massive methane release at California's Aliso Canyon, a task force said on Tuesday.

Operators should phase out "single point of failure" designs, which hindered the ability to swiftly control and repair the leak at Aliso Canyon, the task force said, giving a total of 44 recommendations.

The months-long gas leak forced thousands of Los Angeles residents from their homes and was the largest known accidental methane release in US history.

To avoid future pipe failures, the task force recommended storage facilities upgrade their wells to include a two-pipe design with a casing pipe cemented to the rock wall surrounding the well with another pipe inside the casing pipe. The gas would move through the middle pipe so if there was a leak it would be contained within the casing pipe.

The task force recommended using a phased approach that would likely take years to implement to get storage operators to upgrade wells to include the two-pipe design.

The Department of Transportation expects to publish new rules for the industry by the end of the year, said Marie-Therese Dominguez, administrator of the department's Pipeline and Hazardous Materials Safety Administration. She co-chaired the task force along with Franklin Orr, under secretary for science and energy at the Department of Energy.

Dominguez could not estimate the cost of the new rules but said that would be part of the review.

The task force said there were 12 storage facilities that potentially could affect 2 GW or more of power generation capacity, including Aliso Canyon. Five of the facilities are located in Mississippi, three in Louisiana, two in California, one in Michigan and one in New York.

For these and other facilities, the task force called for better coordination between electric grid operators, storage providers and others.

SoCalGas, owned by California energy company Sempra Energy , shut Aliso Canyon in October 2015 due to a massive methane leak that was not plugged until February. Aliso Canyon is the biggest of its four storage fields and supplies gas to homes and businesses in Southern California, including power plants and refineries.

Reporting by Arpan Varghese and Scott DiSavino; Editing by Chris Reese and Lisa Shumaker

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