Gas blowout near Los Angeles leads to settlement worth $1.8 billion

Thousands of families sickened and forced from their Los Angeles homes after the nation’s largest-known natural gas leak have reached a settlement of up to $1.8 billion with a utility, attorneys said Monday.

The settlement with Southern California Gas Co. and its parent company, Sempra Energy, will compensate 35,000 plaintiffs from the 2015 blowout that took nearly four months to control.

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The Aliso Canyon blowout led to the largest-known release of methane in U.S. history and was blamed for sickening thousands of residents who moved out of homes near the San Fernando Valley to escape a sulfurous stench and maladies including headaches, nausea and nose bleeds.

The plaintiffs alleged personal injury for their illnesses and property damage to their homes. SoCalGas spent more than $1 billion on the the blowout — with most going to temporarily relocate 8,000 families. The utility has faced more than 385 lawsuits on behalf of 48,000 people.

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“Our goal has always been obtaining justice for the men, women and children who were failed by SoCalGas throughout every turn of this catastrophe,” attorney Brian Panish said in a statement.

Plaintiffs alleged they suffered personal injury and property damage after a natural gas storage well failed and uncontrollably released nearly 100,000 tons of methane and other substances into the atmosphere over 118 days.

SoCalGas said it would record an after-tax charge of approximately $1.1 billion this month and expects total settlement payments of up to $1.85 billion. The agreement is subject to about 97% of plaintiffs accepting it and could be reduced if fewer agree.

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“These agreements are an important milestone that will help the community and our company work toward putting this difficult chapter behind us,” said Scott Drury, CEO of SoCalGas.

Matt Pakucko, founder of Save Porter Ranch, issued a statement repeating his call for the permanent shutdown of the facility, where natural gas is stored beneath a mountain in vacant, old oil wells.

“You can’t put a price tag on human suffering,” he said. “SoCalGas’ devastating blowout will never be behind us until the Aliso Canyon storage facility is shut down and the danger it poses to the community is permanently eliminated. We are nowhere near a resolution.”

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State regulators found the gas company failed to investigate previous well failures at the storage site and didn’t adequately assess its aging wells for disaster potential before the Oct. 23, 2015, blowout.

SoCalGas previously reached a $120 million court settlement with the state attorney general and agreed to a $4 million settlement with Los Angeles County prosecutors after being convicted in Los Angeles Superior Court of failing to quickly report the leak to state authorities.