Walking on Gas and Changing the World - Does David Ever Slay Goliath?

By Michael Monasky |

South Sacramento community activists took their message to neighborhood groups and schools, and then to the Marxist School of Sacramento December 20, 2012, accepting the first ever PRAXIS award for their long-standing work in keeping out a project to store natural gas below their homes.  Sacramento Natural Gas Storage (SNGS) kicked off the controversy selling the project by awarding small payments for signed agreements to the storage of the gas, accepted at first by absentee landlords. A filmmaker has been chronicling the struggle with an anticipated March 2013 release.

Constance Slider-Pierre told how the South East Area Neighborhood Association merged with the Avondale Action Committee to form the Avondale-Glen Elder Neighborhood Association (AGENA). These groups represented low-income people of color for over 30 years in an area near the Sacramento Army/Signal Depot, bordered by 65^th Street and Fruitridge, Power Inn, and Florin Roads.

AGENA's formation was prompted by declining association enrollment and an influx of south East Asians who came with a different politics, culture, and language. An arson incident in a local park play structure motivated them to write a grant, which brought attention to the group, and AGENA was invited by SNGS to endorse its gas storage plans.

AGENA represented 6,000 rooftops and SNGS wanted to store gas under 750. It promised $500 per house per year, and $35,000 a year to the neighborhood for its projects to offset blight. “If this is safe, this can be a great thing [for the community], ” said Slider-Pierre. He added there was “a little bit of hope that this can be safe.” Slider-Pierre said that AGENA began to make simple demands for the project's safety; what she did not know was that their efforts would lead to preparation of an environmental impact report (EIR).

Jermain Gill was AGENA's co-chair with Slider-Pierre, and organized children's sports activities for the association. His task was to prepare and distribute newsletters and organize parties for the association.

Slider-Pierre had political aspirations, but her analytical side was inquisitive: “how much more should we really be getting?”

A little arithmetic exercise: one hundred cubic feet of natural gas = one therm. The average therm costs about one dollar. The average home uses 1,000 therms per year. Storing 7.5 billion cubic feet of natural gas under 750 homes means each home sits on 10 million cubic feet of natural gas, or about 100,000 therms. So each home sits on enough gas to power 100 homes. If the annual cost of gas is $1,000, then the $500 compensation represents one-half of one percent (0.5%) of the value of the gas below each home. For a $375,000 homeowner fee, SNGS could sell $75 million in gas. It was prescient that the neighborhood suspected a rip-off by the company.

Colin Bailey was a staff attorney at the Legal Services of Northern California. His colleague Bill Kennedy introduced AGENA to him as it sought non-profit status for the blight-reducing income from SNGS. Bailey helped prepare the association's non-profit formation documents and community benefit agreements. But he had his suspicions.

Bailey said that “material seduction” had been committed by SNGS in the premature payments to property owners. Procter & Gamble's co-generation energy plant was shuttered in the 1980s when the water table under the neighborhood interfered with gas extraction. This was the same geological space SNGS wanted to use to store its gas.

Bailey said that he became painfully familiar with “petroleum geology textbooks” while researching the issues, including a disastrous January 17, 2001 gas migration and explosion at Hutchinson, Kansas. The south Sacramento underground gas storage project was the first of its kind in the country. Red flags were raised because there are so many depleted natural gas fields throughout the West and the Allegheny/Ohio River area. Sacramento could be a test case for natural gas storage expansion (c.f. Page 13). http://www.energy.ca.gov/research/notices/2007-11-15_workshop/presentations/MRW+associates_NG_Storage_in_CA.pdf

Slider-Pierre said that SNGS pushed for a simplified environmental report, a Negative Declaration. AGENA insisted on a full-blown, multi-million dollar EIR.

To do this, Bailey organized a multi-platform advocacy strategy involving attacks and end-runs with multiple agencies and resources. The association involved many attorneys from private and public institutions and pursued the EIR through the courts and the California Public Utilities Commission.

This was not to be a simple struggle between a diminutive community of David-with-slingshot versus the industrial Goliath. AGENA argued its case before its local city councilman whose unswerving support helped secure the performance of the EIR.

SNGS choreographed a visit to a southern California and tried to restrict the movement of activists. Slider-Pierre disobeyed SNGS' prohibitions, delaying their return to Sacramento and visiting environmental activist and former actress Patricia McPherson (the auto mechanic on the 1980s drama Knight Rider).

McPherson told them that Playa Vista residents in Los Angeles sit atop a poorly monitored gas and oil deposit. At nearby Ballona Creek McPherson has volunteered for the Wetlands Trust which has set aside state-purchased wetlands as open space. Meanwhile, natural gas percolates and bubbles at the surface of both southern California projects.

Gill reported mixed reactions from neighbors: some cared, and others didn't. During the first iteration of talks, neighbors opposed the project. During a second visit by SNGS, there were divisions in the neighborhood association. AGENA asked the company not to sign leases with homeowners before the EIR came out.

But due to the falling economy and home foreclosures, the offer of $500, then $1,000 per year, and a distribution flurry of gasoline and grocery gift cards was too seductive. Attorney Bailey said by that time “panic set in.” Gill said that the majority were senior citizens on fixed incomes. With threats by SNGS of eminent domain seizures of their property, many decided to “take the money and run,” he said.

Slider-Pierre estimated that one third of the neighborhood was Latino, another third Asian, and the remainder African American. She waged a door-to-door educational campaign. Bailey said the neighborhood was interested in and hopeful for a positive outcome. By then, a full EIR was required of SNGS. To demonstrate significant risk, an overriding consideration hinged on whether the community should bear the burden of environmental hazards: explosion, inhalation of leaking gas and further collapse of the ground.

Gill maintained that lessees needed money, and some were lied to by the company, especially regarding eminent domain seizure of their property. SNGS tried to shuffle responsibility for “who was going to be responsible for 'what ifs?'” to the city, county, and state, he said. There were a lot of lies and personal attacks, but the community prevailed with support of family and friends since “we were in it for the long-haul,” Gill said.

Bailey stated that the San Bruno gas explosion came from a 16 inch pipeline, but that the AGENA sandstone could lose 1% of its capacity instantaneously; that's an explosion combusting about 80 million cubic feet of natural gas at once. When Democratic Governor Jerry Brown appointed CPUC members Florio, Sandoval, and Ferrin, AGENA threw its resources at that agency for relief.

SMUD had contracted with SNGS so it could get funding from Wells Fargo bank. SMUD was contractually obligated to support the project, and its engineers told the CPUC that the project was needed.

 However, it was CPUC commissioner Ferrin whose deciding vote in July 2012 turned the tide for AGENA when he declared that the project was unnecessary. The case before the CPUC had a complex trajectory. The time and place of CPUC Public Participation Hearings were inconvenient to AGENA.

And it was not until a pro bono lobbyist pushed California Senate President Pro Tempore Darrell Steinberg's office to insert, carry and pass a “strict liability” clause into gas storage contracts such as this one. The company was no longer off-the-hook in case another San Bruno-type explosion occurred.

In the media, local TV remained unfriendly to communities of color. “Sacramento News & Review writer Cosmo Garvin wrote influential articles early on,” Bailey said. “Then issues got big enough for the Sacramento Bee to be involved.”

Visits with its editorial board, and conversations with Ginger Rutland in particular, told of the history of government design, exhumed by UC Davis sociologist Jesus Hernandez, to make it an exclusively African American housing resource for black workers at the Sacramento Signal Depot. Then came the icing on the cake: a letter from Senator Steinberg, declaring “This is an environmental justice issue.”

Enron created spot energy markets in California in the late 1990s, sparking niche markets for natural gas storage facilities. In response, Wells Fargo, Shell Oil, Lodi Natural Gas Storage, and Sacramento developer attorney John Diepenbrock composed the SNGS investors. Bailey said that there remains an ongoing case before the CPUC. Colin Bailey has left LSNC and is director of the Capital Regional Organizing Project, and works with the Environmental Justice Coalition for Water (ecjw.org) Both are environmental justice initiatives.

Constance Slider-Pierre stated that “so many areas in the six county region are experiencing economic oppression” as she continues her work on similar justice projects in the Bay Area. So the battle continues. 

Jermain Gill declared that “this [experience] made the neighborhood association stronger.” He coaches and leads the Junior Giants children's sports club and is President of AGENA.    

For more information, go to http://www.walkingongas.com/