Sempra Has to Turn to Cow Dung to Make Up for California Gas Leak

(Bloomberg) -- Reparations for the worst-ever U.S. natural gas leak will involve cow-dung duty.

That’s the takeaway from Sempra Energy’s $119.5 million settlement with Los Angeles and California agencies over the leak almost three years ago at the Aliso Canyon gas storage facility owned by the company’s Southern California Gas utility. Almost a quarter of the money will go to fund a program to capture methane from dairy farms that can be processed into something called renewable natural gas. This RNG can be substituted molecule for molecule for the fossil fuel version and injected into the vast U.S. pipeline network.

Sempra Has to Turn to Cow Dung to Make Up for California Gas Leak

Methane emissions are the second-largest contributor to global warming after carbon dioxide, and gas distributors have been looking for ways to reduce them. RNG, which can be produced from cow, pig or even human waste and from gas emitted off the decomposing contents of landfills -- is an emerging, environmentally friendly renewable fuel that doesn’t have blending limits. Utilities like Duke Energy Corp. and National Grid Plc and trucking fleets are already investing in it.

The drive to recycle farm waste will help California “meet its ambitious climate goals,” Bret Lane, SoCalGas’s president and chief operating officer, said in an emailed statement. Replacing 16 percent of the natural gas used in the state with the renewable version would cut the same amount of greenhouse gases as converting all California buildings to run only on electricity by 2030, according to a SoCalGas-commissioned study released last week by Navigant Consulting Inc.

The Aliso Canyon leak has already cost Sempra more than $1 billion, with more than half of that amount going to temporarily relocate the thousands of people who were sickened by the gas, according to a securities filing.

©2018 Bloomberg L.P.