FERC sees CPUC as LNG hurdle

A member of the Federal Energy Regulatory Commission has stated that the California Public Utilities Commission may be the single greatest hurdle to lowering natural gas prices in America, according to the Dow Jones Energy wires:

Liquefied natural gas facilities may be the best way to prevent high natural gas prices, but development of those terminals is threatened by a jurisdictional challenge from California regulators, a member of the U.S. Federal Energy Regulatory Commission said Tuesday.

California utility regulators decided in early July to challenge FERC's claim to sole jurisdiction for siting LNG terminals. If the state prevails, LNG development will come to a standstill, FERC Commissioner Joseph Kelliher said at an industry conference, reiterating a concern he's raised previously.

"In my view, the biggest threat to LNG facilities is the jurisdictional challenge posed by the California Public Utilities Commission," Kelliher said. "Stakes are high in this dispute."

LNG is widely seen as a practical way to bridge the gap between growing demand for natural gas and declining North American supply.

I would add rogue NIMBY's to that list too.

Sound Energy ignores neighbors' concerns

Sound Energy Solutions, the consortium planning to build an LNG terminal near population centers in Long Beach, California, brush off criticism from their neighbors in an article in Inside FERC:

Local opposition to a proposed liquefied natural gas import terminal in Long Beach, Calif., continues to crop up as the regulatory approval process moves forward. But an executive with the project's sponsor, Mitsubishi subsidiary Sound Energy Solutions, said the company is unfazed by all the hoopla.

Long Beach resident Geoffrey Millar has launched a new Web site, www.nolnginlb.com, which he terms a "good neighbor awareness board" to communicate what he sees as the potential hazards of the terminal planned for the Port of Long Beach. Millar's graphics-heavy site speaks of an LNG "ring of fire" 20 miles wide that could "vaporize" the city if there were a major accident at the site.

"Long Beach is just wrong for it. It's too close to people," Millar said in an interview last week. "We're the third-largest port in the world. We're already a terrorist target." Millar said Long Beach is also undergoing a "renaissance" and that an LNG terminal would deflate property values and hurt businesses such as hotels, cruise ships and a new convention center. "I'm not an anti-LNG guy. I'm just saying 'not here,' " Millar added. "We're grassroots. We want to put up the facts and let the people know about it."

SCE Bill: Schwarzenegger Cannot Enact

Governor Arnold Schwarzenegger slapped down Southern California Edison's attempt to guarantee profits by re-regulating the State's energy markets:

Both Edison and Calpine want to construct badly needed plants, and both undertook intensive lobbying and advertising efforts this year related to the legislation, AB2006.

In vetoing the bill, which was carried by Assembly Speaker Fabian Nuñez, D-Los Angeles, and sponsored by Edison, Schwarzenegger said Saturday that it would have added "layers of mandates and process that favor monopoly utilities. ''

The governor said that the state's Public Utilities Commission is implementing market rules that will spark power plant construction and that the bill would have delayed progress.

Maybe next year there will be a serious effort to address California's electricity imbalance. Maybe.

Schwarzenegger signs Hybrid HOV Bill

Arnold Schwarzenegger has signed legislation to allow hybrid vehicles which get more than 45 mpg to ride in HOV lanes along California freeways. Critics wonder if this will reduce the benefits of the lanes themselves:

With the twin goals of saving fuel and easing traffic congestion, the bill generated widespread interest among commuters and bipartisan support in Sacramento.

But transit experts say 80 percent of the car-pool lanes in Los Angeles County are now running at optimal levels and that adding more cars will significantly slow the flow.

"It's not going to give them really much relief," said the Metropolitan Transportation Authority's Ray Maekawa. "That's the practical reality."

Furthermore, the highly anticipated Hybrid Honda Accord, Lexus RX 400h and Hybrid Ford Escape will not qualify since they do not meet the required fuel efficiency standards.

Hertzberg promotes energy reform as Air Quality solution

Recognizing the linkages between air quality, electric generation and transportation, Bob Hertzberg, candidate for Mayor of Los Angeles, promises energy reform should he be elected:

I want to fundamentally change the way we use energy in Los Angeles. We can no longer afford to pollute our air, our water and our neighborhoods. We have the technology to use clean burning fuels – and Los Angeles should lead the nation in the clean-air revolution.

It is a worthy goal that deserves more than a blog posting...we hope Mr. Hertzberg will expand on these thoughts as the campaign progresses.

Shell considering Bakersfield options

Shell Oil has received offers to purchase the Bakersfield refinery it was looking to shut down:

Several companies submitted bids "stating the price they would pay for the refinery and any additional terms and conditions they would propose," according to a statement released by Shell, the U.S. unit of Anglo-Dutch company Royal Dutch/Shell Group.

The company set no deadline for a sale deal, but pledged to continue negotiations as long as they are "warranted by the progress of our discussions," spokesman Stan Mays said. Mays declined to be interviewed for this story, but provided written answers to questions.

Mays said the sale would include some large storage tanks, but not all of them. Shell said it would negotiate a long-term lease with the buyer for use of the fuel terminal, tanks and pipelines not included in the sale.

If no deal is reached, Shell said it would close down the refinery March 31, or by the end of the year if it couldn't get the necessary waiver from the Environmental Protection Agency to stay open into 2005. Shell originally planned to shut the plant Oct. 1, but postponed the closure to allow more time for negotiations with possible buyers.

If the refinery is ultimately shut down, the impacts of a March closure would be much greater than one in October.

PUC Commissioner takes on FERC LNG Decision

California Public Utilities Commissioner Loretta Lynch is taking on the Federal Energy Regulatory Commission, according to Gas Daily over a proposed LNG terminal in Long Beach:

The California Public Utilities Commission is unified in its stance that FERC doesn't have exclusive jurisdiction over the proposed Sound Energy Solutions liquefied natural gas terminal in Long Beach, Commissioner Loretta Lynch told Gas Daily on Monday.

All five members of the often-divided state commission agree that "it's such an extraordinary overreaching by FERC" to proclaim sole authority, Lynch said in an interview. While FERC has acknowledged that the LNG from the terminal would travel through intrastate pipelines and only be sold within the state, it "nonetheless pre-empted California in its entirety," she said.

FERC hinged its position on Natural Gas Act section 3 language dealing with import facilities and a 1974 D.C. Circuit Court of Appeals decision that provided that FERC could impose on imports the equivalent of section 7 certification requirements. But section 3 "very clearly shows a state role and very clearly, from my perspective, by the absence of any language does not show a federal role," Lynch insisted.

To translate into simple English: California wants authority over siting of LNG terminals in California. Simple enough.

Oxnard Lawyer Tim Riley's jihad on LNG Challenged

One of the obvious benefits for Sempra and ChevronTexaco seeking to locate their LNG terminals in Mexico are the less-stringent environmental regulations and less litigious society. Along the Ventura County Coast, Oxnard lawyer Tim Riley has made a name for himself opposing LNG...but it isn't necessarily a good one as Bill Saracino explains:

If you get past the crude graphic and pursue the link, you will find as exhibit A in the case against LNG an explosion that struck Cleveland, Ohio. I thought the pictures looked a bit dated so I read further into the story and eventually discovered that this explosion occurred in 1944. Seems like just yesterday, I guess, when you’re busy holding back the tide of progress.

To be fair, exhibit B is an LNG accident that occurred this year ... in Algeria. Algiers being a well-known high-tech center, I am confident they have all the modern equipment and safety devices that California has — just as confident as I am that Madonna is a virgin. Oh, and the accident in question was, in fact, the explosion of a boiler, not of LNG.

As they do for other disengenuous filmmakers, those pesky facts can get in the way!

Second LNG facility gains permit in Baja California

ChevronTexaco has cleared a major environmental hurdle to build a Liqified Natural Gas terminal in Baja California, which could help California meet its energy needs:

Natural gas already fuels about one-third of California's fleet of power plants, but most supplies are imported through pipelines from distant fields in Canada, the Rocky Mountains and the Southwest. Growing demand for fuel threatens to boost electricity and heating prices, especially since the ability to boost production from existing sources remains in question.

Big energy companies are scrambling to fill the gap with LNG: natural gas produced overseas that must be chilled and pressurized for shipping in huge ocean tankers. ChevronTexaco is developing Gorgon, a large natural gas field in southwestern Australia, and is seeking to line up markets for its output. Gorgon LNG will serve markets on the West Coast, China and elsewhere in Asia, Hodgson said.

Plans for ChevronTexaco's Baja LNG terminal call for the import of about 1.4 billion cubic feet of natural gas a day, roughly equal to one-fifth of California's current demand. A joint venture of Sempra Energy, a San Diego-based utility holding company, and Shell Oil wants to build a $600-million terminal near Ensenada that could handle 1 billion cubic feet a day.

Yet Natural Gas Week is reporting that, "Mexico's Comision Federal de Electricidad (CFE) has issued a gas purchase tender for 235 MMcf/d mainly to supply the Presidente Juarez power plant south of Tijuana." If Mexico starts building native demand for Natural Gas, then the supplies available to California from Mexican LNG terminals will be restricted.

Kerry's nuclear positions in conflict?

JunkScience.com's Steven Milloy asserts that there is a major contradiction in John Kerry's position on nuclear power:

Kerry's Web site states that "nuclear power can play an essential role in providing affordable energy while reducing the risk of climate change." His aides also say he is for nuclear power.

So far, so good. But then on a recent campaign stop in Las Vegas — about 100 miles away from the planned Yucca Mountain (search) site for the long-term disposal of waste from nuclear power plants — Kerry said, "When I'm president of the United States, I'll tell you about Yucca Mountain: Not on my watch."

The realty of the matter, however, is that you can't be "for" nuclear energy (search) but "against" Yucca Mountain.

Coastal communities near Diablo Canyon and San Onofre are likely counting on Kerry to flip-flop on Yucca Mountain were he elected.

LADWP tries to increase green power

The Los Angeles Department of Water and Power is attempting to increase its use of renewable power sources from 3% to 20%:

DWP officials refused to say Friday whether the proposals would provide electricity at a feasible cost, saying that they were just beginning their review.

They also refused to identify the companies that submitted proposals or the location of the proposed electricity plants.

The department would only say that the renewable energy proposals cover a broad spectrum of sources, including wind, geothermal, solar, small hydro, landfill gas, biomass and municipal solid waste.

"The majority of proposals involve wind and geothermal," Martinez said.

Some of the projects could be developed in the Los Angeles area and California, while others are proposed for out of state, officials said.

Martinez said he believed the proposals were enough to cover the 1.32 million megawatt-hours per year of additional renewable energy that the DWP would like to acquire by the end of 2010.

By then, the city hopes to meet an interim goal of having 13% of its power come from renewable energy.

With the Hahn administration's reputation for pay-to-play politics, let's hope these proposals are given a fair and open hearing before LADWP makes any decisions.

New Hybrid focuses on horsepower, not conservation

In the race to catch up with Toyota in Hybrid vehicle sales, Honda is sacrificing the main benefit of hybrid vehicles--gasoline conservation--for greater horsepower:

Honda promises that the Accord Hybrid, with 255 horsepower, will perform better than its top-of-the-line, 240-horsepower, six-cylinder, gas-powered Accord.

As the first hybrid with a six-cylinder engine, the company says, it will accelerate from a stop to 60 mph in 7.5 seconds, besting the regular Accord's eight-second time. What's more, Honda's tests show the Accord Hybrid will get 30 miles per gallon in the city and 37 mpg on the highway, versus the federal EPA rating of 21 mpg city and 30 highway for the conventional model. With an expected price of $30,000, the Accord Hybrid will cost about $3,300 more than the current EX model on which it is based.

That falls short of the fuel efficiency standards required to trigger HOV privileges (if passed), and would double the already-hefty ten years required to recoup the cost of a hybrid engine in gasoline savings.

Energize California website launched

We love attention as much as the next guy, and it was nice to see this blog listed under "News and Views" on the Energize California website. The site says its "mission is to keep you informed about common-sense energy solutions, like LNG, that will energize California today, and into the future." We will keep a close eye to see what they have to say. Share the love and go read about plans to fix California's energy crisis.

Sempra monopoly play in question

In the Union Trib, Peter Asmus asks whether it is smart to allow Sempra to build an LNG terminal off Baja California:

Because LNG terminals already have been rejected off the Humboldt County coast as well as other parts of the country, Sempra Energy has proposed to site an LNG terminal off the Baja coast near Ensenada. On the surface, this Energia Costa Azul LNG facility seems like a nice solution to California's current natural gas supply crunch. Siting such a facility in Mexico gets around the NIMBY problem and, because of cheaper labor, could reduce costs.

But once one digs a little deeper, some red flags start to go up. Sempra, through its subsidiaries San Diego Gas & Electric and SoCal Gas, already dominate both the natural gas and electricity markets of the San Diego area. Does it make sense to allow them even more control of the region's energy future?

Even worse, there is no guarantee that this investment by state ratepayers will provide any near-term price benefits to San Diego. Not only will the natural gas likely come from unreliable OPEC sources such as Indonesia, but there is no guarantee that this natural gas will flow to California consumers or power plants. As the transaction is currently structured, this LNG terminal is to serve consumers in Mexico first. California will have to wait in line with Nevada and Arizona to get any residual natural gas fuel.

What's that saying about putting all your eggs in one basket?

Alarcon criticizes LA Power rates

State Senator Richard Alarcón is demanding that the Los Angeles Department of Water and Power lower its rates:

"I, and the people of the great city of Los Angeles, look forward to your immediate rollback of the 11 percent fee increase for water services which is, in reality an improper and unlawful tax on the residents of Los Angeles," Alarcon wrote.

The letter also takes issue with the $279 million transferred this year from the Department of Water and Power to Los Angeles' general fund to help balance the city's $5.4 billion budget.

Alarcon noted that the DWP allocated 7 percent of its revenue to the city this year rather than its usual 5 percent, and that the difference, $60 million, equals the estimated amount to be generated by the rate hike.

If an investor-owned utility tried hiking its rates in order to increase profits or pass along money to its executives, the CPUC would have none of it. Publicly-owned utilities should be held to the same standard.

Conflicts cited in Nuclear Security

Efforts to secure nuclear generation sites are being scrutinized over possible conflicts of interests:

The GAO report upset committee chair Rep. Christopher Shays, R-Conn., who criticized NRC's sluggishness in implementing post-Sept 11 security reforms. People who live near reactors "and those farther downwind take little comfort from a cozy, indulgent regulatory process that looks and acts very much like business as usual," Shays said in a statement Tuesday. "Findings of security violations elicit promises of correction, but little NRC follow-up. Emergency response plans (for nuclear disasters) may not be current."

Wells' comments also suggested a potential conflict of interest in how simulations of terrorist attacks are conducted. The potential conflict arises, he stated, from the fact the NRC is considering hiring the "terrorist" impersonators from a firm that was selected by the nuclear industry's own trade association, the Nuclear Energy Institute, and that already provides security guards to half the plants where such exercises are to be conducted.

"The company's relationship with the (nuclear) industry raises questions about the (mock terrorist) force's independence," Wells' report says. The GAO report does not identify the company by name, and it could not be determined Tuesday.

Shays concurred: "A proposal to hire an attacking force from the same company used to protect several (nuclear) plants raises legitimate concerns about the integrity" of future simulated attacks.

Fossil Fuels deep down below?

California scientists believe large sources of fossil fuels may exist much deeper than ever believed:

According to traditional theory, fossil fuels -- energy-rich, carbon-based molecules -- are formed over millions of years by biological processes, the disintegration of primeval plants and animals into smelly or gunky hydrocarbons like methane and petroleum. Such biogenic fossil fuels exist fairly close to Earth's surface, in reservoirs such as the oil fields of the Middle East.

One objection to the theory of abiogenic fuels is that they'd quickly disintegrate in the extreme heat and pressure hundreds of miles beneath the surface.

But now, experiments and computer modeling by scientists at Lawrence Livermore National Laboratory and elsewhere appear to have removed this objection. The team was led by geophysicist Henry P. Scott of Indiana University in South Bend, Ind. Their experiments show that methane gas can remain chemically stable at pressures and temperatures similar to those some 120 to 180 miles beneath the surface, the scientists reported in Monday's issue of Proceedings of the National Academy of Sciences.

If true, there could be nearly-endless supplies of fossil fuels available for human consumption...if we could only access them.

Hetch Hetchy study quesries electricity impacts

Yosemite's sister-valley, the Hetch Hetchy has been dammed since the 1920's. Recent efforts to restore the scenic valley have prompted consideration from state officials. The move, however, could jeopardize power supplies:

Susan Leal, general manager of the San Francisco Public Utilities Commission, said she sympathizes with calls to restore Hetch Hetchy, but said advocates are overlooking the potential costs.

Leal said loss of power could make it hard to close dirty power plants in the Bay Area and ensure clean water for residents.

"We have a safe and high-quality source of water," she added. "That is not something you throw out the window."

The power from hetch Hetchy goes primarily to Modesto and Turlock, however. Perhaps they could turn to Natural Gas if Greenpeace ever lets up on the LNG terminals being proposed for California.

Rolling Blackouts possible for Edison Customers

Rolling blackouts might hit customers of Southern California Edison as the utility seeks to remedy recent reliability troubles:

Rolling blackouts might hit eight areas today as Southern California Edison struggles to fix two transformers that failed Friday and Saturday, a company spokesman said.

The transformers, which convert higher voltages to levels used by homes and businesses, serve Moorpark, Simi Valley, Thousand Oaks, Agoura Hills, Westlake Village, Malibu, Calabasas and Newbury Park. Each hour, about 5,000 customers may be affected, spokesman Gil Alexander said Sunday.

Like Edison, the Los Angeles Department of Water and Power is having reliability troubles recently, too. Last week, 5000 customers were affected by blackouts in the Park LaBrea, Mount Olympus and Carthay Circle neighborhoods.

Court says FERC Failed in California Energy Crisis

It was supposed to be a deregulation of the California energy markets, but the experiment which began when legislation passed in 1996 failed. Now a three judge panel is considering giving Californians their money back:

A federal appeals court revived California's claim for $2.8 billion in electricity rate refunds Thursday and blistered federal energy regulators for turning a blind eye four years ago while the state endured power outages and soaring prices.

"Despite the promise of truly competitive market-based rates, the California energy market was subjected to artificial manipulation on a massive scale ... with FERC (the Federal Energy Regulatory Commission) abdicating its regulatory responsibility,'' said the Ninth U.S. Circuit Court of Appeals.

The three-judge panel said FERC failed to enforce a key regulation that would have allowed overcharges to be tracked -- a rule requiring energy suppliers to report every sale to a California utility -- "while energy prices skyrocketed and rolling brownouts threatened California's businesses and citizens.''

Most importantly, the court said FERC "abused its discretion in limiting available remedies for regulatory violations.'' The court stopped short of ordering refunds, however, and instead ordered FERC to reconsider the issue now that its refund authority has been established.

The ruling is important not only for those who hope to recoup some of the money for Californians, but also for advocates for true deregulation, who can rightfully say that there has never been such a thing in the Golden State.

Greenpeace protests LNG sites in Mexico

Sempra and ChevronTexaco proposals for LNG facilities in Baja California--where environmental regulations are less stringent than in the Golden State--are being protested by the environmental group Greenpeace:

The environmental group Greenpeace staged a two-pronged action yesterday, sending boats from Ensenada and San Diego to the Coronado Islands to underscore opposition to two planned liquefied natural gas projects in Baja California.

Greenpeace may be right to protest the projects in Baja California, which seem to have chosen their location in order to avoid California's environmental protections, however, their opposition to Natural Gas seems to ignore the need to meet the State's energy needs in the short- to medium-term.

Power ball makes energy consumption a winner

There is no shortage of lottery jokes to describe the ongoing technology being tested by Sempra and Edison to encourage energy conservation during peak hours. Blogger Boi from Troy reports that in Orange County, businesses are testing a "power ball" which changes color to indicate the price of electricity...which, combined with real-time metering could bring California power consumers closer to real-time pricing for energy usage.

PG&E Estimates Higher Bills for Consumers

Northern California's incumebt investor-owned utility, Pacific Gas and Electric is being criticized for its habit of guestimating consumers' energy bills:

PG&E says it sends out almost 70,000 estimated bills each month -- frequently for amounts higher than actual usage would warrant -- because customers' meters are inaccessible.

But current and former insiders say the utility deliberately bypasses some neighborhoods to save itself the expense of hiring enough people to handle the workload.

State regulators worry that ratepayers are being overcharged on a routine basis. They said an investigation into PG&E's billing practices already is under way and that the utility could face significant fines or penalties.

PG&E spokesman Ron Low said that while meters in a particular neighborhood may go unread due to employee illness or traffic conditions, no policy exists to estimate customers' bills as a cost-cutting measure.

Of course, technology could solve this problem, if labor unions don't block it. For a minimal cost, meters could be programmed to send monthly usage directly to computers at the utility, thereby obviating the need for meter readers, and saving the utility even more money. Heck, with the allegations made here, customers might even be willing to pay for the new meters!

Lexus RX 400h Hybrid SUV most popular Lexus ever

The new Lexus RX 400h--their upcoming hybrid SUV--already has 9000 pre-orders, making it the most popular new Lexus ever.

Lexus said preliminary specs for the 400h include:

- 270 horsepower.
- Mileage "significantly better" than the 28 mpg that an average compact sedan gets.
- New pollution controls.

"You can drive the 400h from Los Angeles to New York and back nine times and produce less smog-forming emissions than painting a room in your house," Toyota Vice President Irv Miller told industry analysts earlier this year.

Of course, to benefit from proposed carpool land incentives for hybrids, a vehicle would have to get more than 45 mpg, which means RX 400h owners will be sitting in traffic with the rest of us

Researchers: Power Grid Vulnerable

Researchers in Pennsylvania have confirmed what Californians learned in 2000-2001: "failures in a fairly small portion of the network can lead to a major disruption." Creating a secure and reliable power supply requires balancing generation and transmission needs.

ChevronTexaco benefits from contributions to Schwarzenegger, Performance Review

ChevronTexaco, which has given $200,000 to Arnold Schwarzenegger and more than $500,000 to the State Republican Party reaped the benefits of their investments in the California Performance Review, according to the Oakland Tribune:

In its section about making it easier to locate refineries or LNG plants, the CPR report cites attorney Mike Carroll of the law firm Latham & Watkins as a source. Based in the firm's Orange County office, Carroll represents Chevron on a variety of regulatory issues, according to the firm's Web site.

Carroll did not return telephone calls for comment from The Associated Press.

Chevron has two LNG proposals -- a $650 million facility that would be built offshore on an island near Tijuana in Baja California; and a second plan that would place a facility at Camp Pendleton in Orange County.

Schwarzenegger is expected to meet with Mexican officials in Mexicali later this month. One expected topic of discussion is Chevron's LNG proposal.

Of course, more than one LNG facility is needed and more than one is proposed; further analysis should be done to determine whether the recommendations unfairly benefit ChevronTexaco over the other proposed projects.

Fires threaten geothermal power plants

The Geysers--a network of geothermal power plants in Northern California--are being threatened by wildfires:

Thousands of residents throughout Northern California could be affected with power outages today and beyond because the fire whipped through an area known as The Geysers - billed as the largest collection of geothermal plants in the world. More than 20 plants tap subterranean steam piped to generating units dotting 30 square miles of Sonoma and Lake counties.

The Geysers supplies power to homes and businesses along the Highway 101 corridor from the Golden Gate Bridge north to the Oregon border. Also, homes and businesses throughout inland portions of Sonoma, Lake and Napa counties receive power generated by the plants.

Of the 1,000-megawatt capacity in The Geysers grid, 750 megawatts are controlled by San Jose-based Calpine Corp. Kent Robertson, a spokesman for Calpine, said Monday that 500 megawatts of the 750 under Calpine's control were off-line as a result of the fire.

As California faces its first heatwave in seevral weeks, the last thing the state needs is a reduction in capacity, even if it is localized.