LNG supply bill to be heard in Assembly

By CMTA Staff

Capitol Update, June 29, 2007 Share this on FacebookTweet thisEmail this to a friend

The Assembly Utilities and Commerce Committee will hear a bill on July 2 that could cause severe delays in the delivery of new natural gas supplies to California. SB 412 (Joe Simitian, D-Palo Alto) prohibits the governor or a state or local entity from approving the construction or operation of a liquefied natural gas (LNG) facility until a LNG Market Assessment Report is issued and becomes final.

The bill is redundant and unnecessary.  The proposed LNG terminals are already undergoing extensive permitting processes to ensure that the proposed projects are environmentally sound.  Passing this legislation will create an additional barrier, compromising California's future energy supply and hindering the state's efforts to secure a variety of fuel sources for growing demand.

A LNG market assessment report is also unnecessary.  Current law already requires the California Energy Commission (CEC) to assess future demand and supply and develop long-term forecasts of state energy needs.  The CEC estimates that demand for natural gas in California will grow by approximately 0.7 percent annually from 2006 to 2016, even taking into account maximum increased conservation and renewable energy supplies. According to the 2005 Natural Gas Assessment Update, the total annual statewide consumption of natural gas, which was 2,200 billion cubic feet in 2003, will reach 2,400 billion cubic feet by 2013.

Current law also requires the CEC to assess electricity infrastructure trends and issues facing California and develop and recommend energy policies for the state to address and resolve such issues as part of its biennial Integrated Energy Policy Report.  In the Energy Action Plan II, the CEC and the California Public Utilities Commission agreed that "California must also promote infrastructure enhancements, such as additional pipeline and storage capacity, and diversify supply sources to include liquefied natural gas."

The bill's requirement for a life-cycles emissions analysis is unnecessary and usurps the California Air Resources Board's (CARB) responsibility for implementation of AB 32 (The Global Warming Solutions Act, Chapter 488, Statutes of 2006, Fabian Nunez, D-Los Angeles).

Located on the far end of the nation's pipeline system, California imports 87 percent of its natural gas.  As national gas consumption grows, we continue to find ourselves lower on the priority list while paying 30 percent more for natural gas than consumers in other states.

With more than 40 percent of the state's electricity generating capacity being fueled by natural gas, it is critically important for California to identify and build the natural gas infrastructure that allows our economy to grow and to meet the peak demands of a summer heat wave. Clean-burning natural gas is also a much-needed bridge to renewable resources and next-generation, low-carbon technologies.

A growing supply-demand imbalance has pushed California natural gas prices steadily upward, with future demand projected to increase prices still further.  SB 412 could cause severe delays in the delivery of new natural gas supplies to California and raise energy costs, to the detriment of California consumers and businesses.

CMTA brought together a statewide coalition of business, taxpayer, consumer, local government, education, agriculture and senior organizations to educate the public about the benefits of importing LNG.  To learn more about the efforts of Californians for Clean Affordable Safe Energy (Cal-CASE) or to join the coalition, go to:  http://www.casefornaturalgas.org/

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