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Accidents may also trigger environmental liability

This environmental blog often focuses on strategies for taking a proactive approach to regulatory compliance. However, a recent article serves as an important reminder that accidents can happen. When they do, a company may be facing staggering liabilities associated with the environmental cleanup. Environmental lawyers are also needed in this type of crisis.

The Southern California Gas Co. recently agreed to an $8.5 million settlement arising from a well accident that resulted in a massive natural gas spill. The lawsuit was brought by the South Coast Air Quality Management District, or AQMD, which is the environmental control agency for several counties in Southern California, including Los Angeles, Orange, Riverside and San Bernardino Counties.

The well blowout reportedly lasted around four months, beginning in October 2015 and continuing until the well was capped in February 2016. The spewing natural gas displaced thousands of Los Angeles residents from their homes. In addition, commentators characterize the accident as the largest known release of methane in U.S. history.

There damage to the home residents was clearly visible. Less certain is whether the release of methane into the atmosphere will negatively impact the climate. Also uncertain is the cause of the well leak, which authorities are still investigating.

In the meantime, the company’s entire storage field was closed, and state regulators conducted rigorous inspections. Any wells that are not inspected or that do not pass these state-mandated tests within a year will be permanently sealed.

Notably, the disbursement of the settlement funds reflects the complicated impact of this environmental accident. Southern California Gas will provide $1.6 million to state regulatory authorities for the costs incurred from air monitoring. Another $1 million will go for a health study, $250,000 to AQMD’s legal fees, and the remaining $5.65 million to emission fees.

Source: Associated Press, “Utility to pay $8.5 million to settle suit over gas blowout,” Feb. 8, 2017

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