Anti-LNG legislation scheduled for hearing

By CMTA Staff

Capitol Update, April 20, 2007 Share this on FacebookTweet thisEmail this to a friend

Legislation that would make it harder for liquefied natural gas (LNG) facilities to be sited in California will be heard in the Senate Energy, Utilities and Communications Committee on Apr. 24. 

SB 412 (Simitian) requires the California Energy Commission (CEC) to make an LNG needs assessment study that assesses demand and supply for natural gas and alternatives to natural gas to meet energy demands, and to determine the number of LNG terminals, if any, needed to meet the state's projected natural gas demand.

California ranks tenth in the world in consumption of natural gas, the vast majority of which is imported from out of state.  A growing supply-demand imbalance has pushed California natural gas prices steadily upward, with future demand projected to increase prices still further.  We are welcoming six million Californians to a state that produces only 13 percent of the natural gas we consume. 

With more than 40 percent of the state’s electricity generating capacity being fueld by natural gas, it is critically important for California to identify and build the natural gas infrastructure that will help maintain a robust economy.  We need to have a strong, affordable energy supply that allows our economy to grow, jobs to expand and businesses to thrive, along with the peak demands of a summer heat wave.

A number of private companies are in various stages of an exhaustive and thorough review process to receive permits to construct LNG terminals where LNG would be offloaded, transformed back into its natural state and then distributed through the existing pipeline system. 

SB 412 adds even more layers of review for liquefied natural gas LNG terminals.  The bill is unnecessary and deeply flawed.

LNG projects are already undergoing lengthy reviews by multiple federal and state agencies to ensure public safety and environmental safeguards.  The need for more natural gas to fuel our growing economy and fire electric power plants has been extensively documented by the CEC. As a result, the CEC and California Public Utilities Commission agree that "California must also promote infrastructure enhancements, such as additional pipeline and storage capacity, and diversify supply sources to include liquefied natural gas." [Energy Action Plan II <http://www.energy.ca.gov/energy_action_plan/index.html> .]

Opponents of LNG argue that conservation and renewable power is all we need.  They are wrong, as shown by years of study and recent events. The CEC forecasts that demand cannot be met with natural gas from domestic wells through existing pipelines.  Last year’s summer heatwave was nearly a catastrophe; it was hydroelectric power, nuclear plants and the traditional natural-gas fired plants that kept the lights on. 

Tight supplies are already causing high natural gas prices—nearly double what they were in 2000.  Continued increases in the price of natural gas will slow economic growth in the state.

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