Thursday, December 30, 2004

HOV Lane for Hybrids: Not on Saturday

Although laws adopted by the State Legislature go into effect in California on January 1st, one law will not. The measure allowing drivers of Hybrid vehicles to drive in California highway's carpool lanes still requires an act of Congress before it may come into effect:

Although Assembly Bill 2628 is set to become law with the new year, it cannot be implemented without approval by Congress, where the measure is stalled indefinitely.

That's confused and frustrated many hybrid enthusiasts who loved the idea of zipping past their gas-guzzling brethren on Los Angeles' notoriously jammed freeways.

"We're getting e-mails from all over the state, from people who either say they own a hybrid or they're thinking about buying one, saying, 'When can we use the HOV lanes?"' said Louise Rishoff, district director for Assemblywoman Fran Pavley, the Woodland Hills Democrat who introduced the legislation.

"We're just waiting for Congress," she said. "The bill acknowledges that this federal approval is a prerequisite to implementation.

Tuesday, December 28, 2004

LNG operations unscathed by Tsunami

One of the canards launched against the proposed offshore liquefied natural gas (LNG) facilities off California's coast is what might happen in the case of a tsunami, like the one that killed tens of thousands in Southeast Asia on December 26, 2004. Critics of LNG are sure to be disappointed by this news:

• OPEC member Indonesia's 1 million barrel per day (bpd) oil production and exports unaffected;

• Liquefied natural gas (LNG) processing at the Arun facility in Aceh province near the tsunami wave, was briefly disrupted on Sunday but infrastructure was undamaged. Indonesia is the largest LNG exporter in the world;

• Indian port of Madras closed on Sunday but expected to reopen by Tuesday. Madras is expected to handle about 190,000 bpd of crude and oil products this year;

• Operations at India's 190,000 bpd Chennai Petroleum Corp. Ltd refinery, near Madras, unaffected but may see delays in crude supplies due to port closure;

NIMBYs blamed for California Energy Woes

California faces many difficult choices in energy planning, as it balances environmental concerns with its need for natural gas and petroleum. But the two are now in conflict, according to energy experts Wayne Lusvardi and Charles Warren:

As “black gold” was exchanged for the brown gold of real estate development the NIMBY problem emerged – oil fields may be necessary but “not-in-my-backyard.” The emergence of NIMBY-ism and the growth of the tourist industry formed a political base for creating coastal “marine reserves” in Monterey Bay and elsewhere. It also gave cause for filing environmental lawsuits with the “discovery” of oil sludge along beaches in scenic coastline areas. Environmentalists have been successful in attributing such natural deposits of oil as caused by industry instead of nature, exacting hundreds of millions of dollars from oil companies in mitigations for redevelopment projects at Avila Beach and Guadalupe Dunes. This NIMBY-style environmentalism has historically bought Democratic votes from the blue-colored wealthy coastline counties.

Enter the Energy Crisis. From 2000 to 2002, California experienced a series of rolling electrical system blackouts and skyrocketing electricity bills. This “electricity crisis” was blamed on faulty governmental deregulation of the electricity industry together with the “gaming” of the deregulated energy markets by Enron and other energy companies. To technical experts the crisis was caused many to what was called a “perfect storm” of unusually cold winter weather, the lack of backup hydropower availability from the Pacific Northwest due to a drought, and unusually high regional natural gas prices due to a lack of competing cheap hydropower all converging just at the same time as old polluting power plants were taken off line under energy deregulation.

This “crisis” was artificially created when in 1996 the Clinton-run Federal Environmental Protection Agency (EPA) threatened to cut off all Federal aid to California by the year 2000 unless it met its clean air mandates. The only way to meet these standards was to mothball the polluting monopoly-owned energy plants along the coast. The problem was that the old mortgages, or bonds, on the power plants weren’t paid off yet leaving unanswered the question of who was going to pay for billions of dollars of these “stranded assets.” The crisis was resolved by a recall of the governor and folding the stranded debt into a government bond to be repaid by the taxpayers. The media mostly blamed the crisis on greedy corporations such as Enron rather than the actions of government environmental and energy agencies which left the public in the dark as to what was really going on. The so-called “energy crisis” wasn’t really about energy at all, but about cleaning the air by shutting down old polluting power plants with unpaid mortgages on them.

Enter FERC. In a backdoor maneuver to overcome the obstruction of the Democratic-controlled CPUC and State legislature, language authorizing the Federal Energy Regulatory Commission (FERC) absolute power over California to issue permits for off-shore LNG terminals was recently slipped into the back pages of a recent massive Congressional spending bill, which Senator Barbara Boxer voted against.

Anticipating this change of events, two foreign companies, a subsidiary of Mitsubishi and BHP Billiton LNG International, have proposed to build California’s first LNG terminals in the ocean 15-miles off of Long Beach and Oxnard to import liquefied natural gas from overseas. Nimble politicians and commercial enterprises have finally found a safe, environmentally unobtrusive, and politically acceptable way around California’s entrenched environmental interests. The environmental community is apoplectic at this “leap frog” maneuver over entrenched state environmental interests.

The mainstream newspapers around the state have portrayed this change of events as “big business” trumping “environmentalism” and “local control.” But the ugly fact is that we are fighting resource wars abroad to preserve ocean views in Malibu and tourism in Monterey Bay rather than exploiting our own natural resources.

San Mateo County to Sue over Natural Gas prices

The County of San Mateo is joining the rush of public agencies filing suit over price manipulation of Natural Gas in the monts leading into the 2000-01 California Energy Crisis:

The lawsuit was filed in state Superior Court in Redwood City on Dec. 23, and names as defendants more than 25 producers, marketers, traders, transporters, distributors and sellers of retail natural gas and their subsidiaries.

Filed by the county's legal counsel in cooperation with the Burlingame-based national law firm of Cotchett, Pitre, Simon & McCarthy, the suit accuses the companies of illegally colluding to spike the price of retail gas to more than six times the national average during the state's energy crisis in 2000 and 2001.

"... This case is about anti-competitive, unlawful, unfair and fraudulent conduct under California law that was motivated by greed and facilitated by industry insiders for one purpose: to generate increasingly larger profits from the sale of gas to retail customers in California," the 27-page complaint states in part.

Among the companies named in the suit are San Diego-based Sempra Energy and its subsidiaries: Sempra Energy Trading Corp., a leading marketer and trader of natural gas, Southern California Gas Company, the nation's largest natural gas distribution utility, and San Diego Gas & Electric, a provider of gas and electric service to 3 million California consumers.

Whether or not these lawsuits pan out, they do make the case for diversifying the supply of natural gas providers in the future so one company which generates, purchases and delivers the product cannot exercize its forces upon a less-than-free market.

Wednesday, December 22, 2004

LNG report concerns Long Beach residents

A new report on LNG safety from Sandia National Laboratory has stirred concern among local activists over the security of the Port of Long Beach.

"Anti-LNG activists viewed the report as confirmation of their concerns. They've long argued that the port is already a terrorist target before adding another potentially hazardous site.

'And the site-specific aspects of Long Beach could make it worse,' said local LNG opponent Bry Myown. 'They're holding out that the probability is low, but the probability here has to be seen as much higher.' Giles, meanwhile, said the site will be safe.

'I don't think we ought to talk about probability. We ought to talk about safety,' he said. 'The site is a small area. Only the container ships from Hanjin and the Navy and Sea Launch have access there. It's not easy to get in there and do something.'"

Tuesday, December 21, 2004

Gas prices fall

Gasoline prices are down $0.35 since hitting a CA record high in October, but prices are still well above the national average.

"Including the latest drop, gasoline prices in the state have fallen 35.3 cents since hitting a record statewide average of $2.402 a gallon Oct. 18, according to the weekly fuel price report by the Energy Information Administration, an arm of the Energy Department.

California's latest retail average remains more than 23 cents above nationwide levels and more than 43 cents a gallon higher than the state's year-ago average, the figures show. Diesel prices fell 5.1 cents to a statewide average of $2.087 a gallon, according to the survey.

Nationwide, the cost of regular dipped 3.2 cents to an average of $1.815 a gallon."

San Diego residents to foot $790 million energy bill?

San Diego Gas & Electric Co. is appealing a decision by the California Public Utilities Commission to shift $790 million in energy costs to the company's customers.

"San Diego Gas & Electric Co. will appeal a decision by the California Public Utilities Commission to shift $790 million in energy costs to the company's customers, it was announced Monday.
The PUC vote is part of a plan to cover $7.4 billion that the state expects to pay for remaining long-term energy contracts entered into during the 2000-01 energy crisis.

SDG&E contends that the PUC failed to take into consideration how the cost shift would impact energy rates. The company also argues that the methodology used by the commission to adopt its energy cost allocation formula was flawed, and gives San Diego an unfair portion of the bill."

Monday, December 20, 2004

Letting the air out of the hydrogen balloon

Atmospheric scientists are trying to figure out how Earth's atmosphere would be affected by leaked hydrogen from cars, hydrogen gas stations. Some claim the "hydrogen economy" could still contribute to climate change.

"A 2004 National Academy of Sciences report on "The Hydrogen Economy" was prepared by "economists and engineers, remarkably lacking any atmospheric scientist or biogeochemists who understand the natural (atmospheric) cycle of H2," said Prather, a professor of Earth system science and former editor-in- chief of Geophysical Research Letters. "It is surprising that all of these groups examining a hydrogen economy are secure in the belief that H2 is a pure fuel, safe and harmless to the environment," although studies suggest otherwise.

One problem is that hydrogen leaked into the atmosphere binds with oxygen molecules, forming water vapor and clouds. A change in cloud abundance in some regions might alter the local temperature and climate -- for example, the climate might warm if the clouds trap heat like blankets, or the climate might cool if they reflect sunlight back into space."

Schwarzenegger's solar plan could burn CA consumers

The Governor's "One Million Solar Bulidings" by 2018 initiative has run into a slight snag, funding for promised rebates.

"Schwarzenegger is expected to finalize a detailed solar program early next year and put it into what would likely become one of the highest-profile bills during next year's legislative session.

The legislation will undoubtedly attract a major battle among many of the most entrenched special interests in Sacramento. Expected is a key fight pitting trade unions against the building industry over whether the program will trigger a law requiring builders of solar homes to pay union-level wages.

The most notable issue, however, is how to foot the bill for the rebates. An effort introduced by Schwarzenegger late in the last legislative session was killed amid concerns that the solar push will require an electricity rate increase in a state still paying for the 2000-01 energy crisis.

"Our rates are very high now and this is potentially a very expensive program,'' said Dorothy Rothrock, vice president of government relations for the California Manufacturers and Technology Association, which has substantial clout in Sacramento.

Administration officials have yet to propose how they will fund the program. Last year, Schwarzenegger's bill could have led to a rate increase that some estimated would have raised $1 billion over 10 years by adding 30 to 50 cents a month to most residents' electric bills. That increase would provide rebates of more than $2,500 to homeowners."

Friday, December 17, 2004

Schwarzenegger puts Poizner, Grueneich on PUC

The California Public Utilities Commission is starting to look more Schwarzeneggerian as the California Governor replaced two Gray Davis appointees on the board:

Schwarzenegger's choices for the PUC are Steve Poizner, 47, of Los Gatos, a Republican businessman who made a fortune in the telecommunications industry and ran unsuccessfully this year for the state Assembly, and Dian Grueneich, 52, of Berkeley, a Democratic lawyer who runs an energy and environmental consulting firm that counts the University of California among its clients.

Both have supported so-called direct-access electricity purchasing, which allows big businesses to shop around for electricity, an idea generally favored by independent energy companies and opposed by utilities and consumer groups.

Poizner set out his views while campaigning this year and Grueneich has backed the idea on behalf of her clients. Both nominees also have promoted expanding reliance on environmentally friendly renewable energy.

They would replace commission Chairwoman Loretta Lynch and Commissioner Carl Wood, appointees of former Gov. Gray Davis, whose terms expire Jan. 1.

Lynch and Wood are considered the most likely on the five-member panel to agitate on behalf of consumer groups against business interests.

The new appointees could shift the regulatory commission to better embody Schwarzenegger's philosophy, one that looks dubiously on organized labor and argues that consumers are better served by a free-market system that encourages outside companies to do business in the state.

Sempra cleared of price rigging

This should come as a relief to executives at San Diego based utility Sempra:

...the California Public Utilities Commission rejected a finding that one of the company's utilities had rigged natural gas prices during the state's power crisis.

In a 3-2 vote, the California Public Utilities Commission rejected an administrative law judge's decision that Sempra's Southern California Gas Co. be fined about $29 million and that evidence gathered in a two-year probe be forwarded to law enforcement authorities.

Voting with the majority, Commissioner Geoffrey Brown said the evidence did not support the judge's decision.

"I cannot conclude that SoCal Gas intentionally created gas spikes," Brown said.

Although you have to wonder how such a deicion would hold up in like, and actual court.

CPUC finds no fault in Friedman

The California Public Utilities Commission is implementing guidelines to advance Governor Schwarzenegger's electric restructuring plan:

The plan approved by the Public Utilities Commission creates a bidding procedure for deciding who gets to build power plants in California. Before, power plant construction was largely the job of the investor-owned utilities, such as Pacific Gas and Electric Co.

Now utilities will submit new proposals to a kind of auction system in which the merchant generators can compete for the right to build the plants themselves and then sell the power under contract to the utilities. The auction will be refereed by an outside party known as an independent evaluator.

The PUC decision was applauded by Gov. Arnold Schwarzenegger, who vetoed a bill in September that would have created a more regulatory-based system and given traditional utilities more leeway to build their own plants.

Hybrid Future: Horsepower!

Seeking to pitch hybrid cars to more than the Arianna Huffington-Leo DiCaprio crowd, automakers are adding the secret ingredient--horsepower:

No longer a funky little science experiment, hybrid cars are growing up and going mainstream. The megawatt success this year of the 60mpg Toyota Prius finally made hybrid cars legit in the land of the SUV. But now comes the auto industry's real killer app: hybrid cars that boost horsepower while pinching pennies at the pump. Forget about sacrifice; the coming wave of new hybrids is all about getting more—more power, more mileage, more credit for saving the planet. Of course, you also pay more—currently about $3,500 extra. And at that rate, getting a payoff at the pump takes years. But analysts predict prices will come down as sales go up. And carmakers are banking on their compelling new pitch—drives great, less filling—to take hybrids to the masses. No longer will they be bizarre larva-shaped cars for tree huggers and techno-geeks. The coming wave of hybrids will be versions of the cars, SUVs, minivans and pickups we already drive. The first of these have-your-cake-and-eat-it models arrives next month, when Honda rolls out a 255-horsepower Accord hybrid that races from 0 to 60mph in 6.5 seconds and still gets 37mpg on the highway. The only way to tell this stealth hybrid from a regular Accord: a subtle spoiler on the trunk. Next summer Toyota will debut a high-powered Highlander hybrid SUV. "It will be like enjoying a hot-fudge sundae," promises Toyota sales exec Don Esmond, "without the calories or the guilt."


Wednesday, December 15, 2004

California's new Energy Source: Canada?

Could Canada be the light at the end of California's energy-deprived tunnel? Rather than import fuels for electric generation--such as liquefied natural gas--some developers was to link power from the Great White North to the Golden State directly:

Under the proposal described Tuesday, the 1,600-megawatt cable would be built by Sea Breeze Pacific Regional Transmission System, owned 50-50 by Sea Breeze Power and Boundless Energy LLC.

The interconnection application with Pacific Gas & Electric Co. of San Francisco is for a high-voltage cable stretching nearly 1,200 miles along the coasts of British Columbia, Washington state, Oregon and California.

I'm nonplussed. The task of getting environmentalists on board such a project is almost Herculean.

Nonetheless, that a company would propose such a risky scheme reinforces the fact that more power supplies are needed in California--an argument rebuffed by environmentalists seeking to block liquefied natural gas terminals along the coast.

Governor reassures Californians

Making a promise that could cost him his Governorship, Arnold Schwarzenegger assuaged concerns over California's energy availability:

Gov. Arnold Schwarzenegger said Tuesday that Californians won't face an energy crisis on his watch despite some experts' concerns about possible shortages by next summer.

"Trust me, everything will be under control - your lights will be on," Schwarzenegger told reporters at the Folsom offices of the state's power grid manager, the California Independent System Operator.

The Republican governor appeared with federal and private energy officials to celebrate the elimination of a bottleneck that contributed to power blackouts during the state's 2001 energy crisis.

Energy experts said the construction of an additional 84-mile transmission line along Path 15, a previously inadequate power corridor north of Coalinga, should help ensure the flow of power between Northern California and Southern California.

Of course, transmission lines mean nothing if adequate energy supplies are not available to transmit.

Solar panel manufacturer boosts production

Due to surging international demand, manufacturers of solar cells are increasing their production:

Solar cell manufacturer SunPower has plans to expand the manufacturing capacity of its factory in Manila, The Philippines to 50 MW by the second half of next year.

All their current manufacturing is sold out.The increase will double the factory's current capacity of 25 MW and allow SunPower to better meet the demand levels for its product.

The new production line for the company's A-300 solar cell will be constructed within the company's existing 225,000 square-foot facility, which started production in March of 2004. Future expansion at the plant could exceed 100 MW, which is production of approximately 32 million wafers per year.

Wafers manufactured by SunPower have an all black contact designed to maximize the working area of the cell, reduce the need for wires and simplify automated production. Efficiency of the cell was measured at 21.5 percent, and testing was done at the National Renewable Energy Laboratory.

Demand for solar electric systems has been growing rapidly. According to Strategies Unlimited, a leading independent market research firm, industry shipments are projected to have increased by 47 percent to more than 990 MW in 2004, and have grown on average by more than 40 percent annually over the past five years.

In order for alternative energy sources, such as Solar Power, to take hold, even more production will be needed.

Tuesday, December 14, 2004

Path 15 fix on way

Path 15--the transmission lines blamed for much of California's energy debacls in 2000-01 is getting its fix on:

Officials on Monday called the project a landmark achievement, but they also disclosed that the Schwarzenegger administration has been forced to adopt dual plans for short- and long-term power development because Californians last summer already hit usage levels projected for 2006.

Consumer groups, who protested Schwarzenegger's rejection of Democrat-sponsored energy legislation earlier this year, said today's ceremony at the state's power-network control center near Sacramento actually signals the Schwarzenegger administration's failure to make progress.

Construction of a third, 84-mile transmission line along infamous "Path 15," between Los Banos and Coalinga in the Central Valley, was kicked off under the previous administration -- that of Gov. Gray Davis, who was recalled last year, partly because of his handling of the 2001 energy crisis.

Of course, transmission lines are useless if you don't have the capacity to generate enough power.

Edison faces reliability troubles in Santa Clarita

Three blackouts in three days have struck Southern California Edison users in the Santa Clarita Valley, just north of Los Angeles:

Saturday’s outage affected Canyon Country, Sunday’s hit the Saugus-Valencia area, and Monday’s hit Saugus, said Southern California Edison spokesman Paul Klein.

At 7:40 p.m. on Saturday, power shut off to 1,640 customers because of a malfunction beneath Begonias Lane and Shadow Pines Boulevard. The last of the customers got their lights back on at 1:06 a.m. on Sunday.

On Sunday, the valley saw less than nine hours of complete power-flow before more damaged subterranean equipment cut out 2,121 Valencia residents from the circuit. Workers righted this outage at 11:55 a.m.

Twelve hours later at midnight on Monday, another hit the Saugus-Valencia area. This blackout lasted until 7:35 a.m. and affected 3,290 customers. It was caused by failed underground equipment beneath Mockingbird Lane and Temoco Drive.

Immigrant activists to boycott gas stations

Protesting their struggle to get drivers' licenses for illegal immigrants, activists plan a Monday-only boycott of gas stations:

Pro-immigrant groups urged motorists to avoid buying gas every Monday through next year or until lawmakers allowed illegal immigrants to apply for licenses.

"Our campaign isn't a day protest," said Nativo Lopez, president of the Mexican American Political Association and Hermandad Mexicana, after announcing the "Dark Mondays" boycott at a gas station in downtown Los Angeles. "It's a prolonged campaign of pressure to obtain licenses for immigrants regardless of their status."

Several outside observers questioned the effectiveness of the proposed boycott.

"Obviously people can arrange not to buy gas on Monday but arrange to buy gas on all other days," said Stephen Levy, senior economist at the Palo Alto-based Center for Continuing Study of the California Economy. "This is equivalent to a bumper sticker drive
Bummer. At $2.29 a gallon, Californians could have used a reduction in demand--and theoretically prices--as a result.

Monday, December 13, 2004

Coalition pushes LNG in California

The California Manufacturers and Technology Association (CMTA) is organizing a coalition to educate Californians on the need for and safety of liquefied natural gas:

Without a steady flow of LNG, the state could be whipsawed by the kind of volatile prices that boosted electricity and natural gas bills during the energy crisis of 2000 and 2001, LNG advocates say.

But LNG projects have ignited considerable opposition.

LNG critics — mainly environmentalists, alternative energy advocates and coastal residents — say the state should work to become less dependent on fossil fuels. They worry about accidents or terrorist attacks, and those fears have generated headlines and stirred up environmental activists and homeowners along the Pacific coast.

Now, industry is getting ready to fight back, led by the California manufacturers and technology coalition and the California Chamber of Commerce.

What's needed to win the LNG war is an industry-sponsored campaign that "will provide political air cover to elected officials of both parties who might be willing to support LNG but fear fallout [from voters] in their districts," according to Murphy's winning sales pitch, which was presented to the state manufacturers group in August.

That's Mike Murphy--political guru to Governor Arnold Schwarzenegger--who is managing the Pro-LNG campaign.

Friday, December 10, 2004

Ecologists protest Mexican LNG Plan for Baja California

While proposed LNG terminals in California have to go a rigorous environmental process, some companies have decided to circumvent that process and build in Mexico, just south of the California Border. Suspicions that this was because it would be easier to get around tough environmental regulations are being confirmed, according to a recent Reuters report:

A ragtag group of protesters gathers once a week near the Sempra site and is routinely ignored by oil executives driving by. Local newspapers are filled with angry editorials.

Many locals refuse to believe the gas will benefit Mexico, convinced the bulk will be piped north to energy-guzzling California, which imports around 85 percent of its gas.

"This will not benefit Mexico as they would have us believe, and we were never asked if we wanted it. We are worried about safety too. One fear is accidents, another is terrorism," Imana said...

But opponents say that with nothing in writing to guarantee where the gas goes, wildlife is being sacrificed for corporate profits.

They say noise from ships unloading LNG will disturb wildlife and floodlights will upset nocturnal birds. They also fear contamination of the seawater used to warm up the LNG.

Locals say fishermen will be hit by exclusion zones, and the Sempra project, in which Royal Dutch/Shell (SHEL.L) (RD.AS) is a partner, will trample on archeological remains.

Mexico's CRE energy regulator has given Sempra permits to start construction and will soon decide if ChevronTexaco can build a plant using the tiny Coronado Islands, a refuge for seals and a dozen species of sea bird, as a breakwater.

That has also upset conservationists. "It costs $10 million to build an artificial breakwater. Is that all the Coronado Islands are worth?" Aguirre said.
Most Ensenada locals are already resigned to losing the battle over the proposed terminal.

"Every year from the porch we watch the whales come by frolicking with their babies. And at night you can see stars," said Imana. "The noise and lights will ruin everything. No more whales. No more starry nights."

Schwarzenegger to try again for Solar Incentives

Solar power is not economical yet, without help from the Government. Arnold Schwarzenegger is going to try again to get the legislature to increase incentives for switching to solar power. Plans will be announced Monday:

The plan, to be carried in legislation co-sponsored by Sen. John Campbell, R-Irvine, expands an earlier proposal that Schwarzenegger rolled out this summer but failed to get through the Legislature.

That plan would have raised $1 billion over 10 years through increased electricity bills for subsidies to homeowners who install solar panels. The current proposal expands to include businesses and may shift from cash subsidies to giving participants offsets on their electricity bills.

Though solar panels currently provide 0.3 of 1 percent of all energy generated in California, the stakes for Schwarzenegger's proposal are high because, according to environmental advocates, it will show whether he has the will and ability to enact major environmental proposals.

Of course, since the bill is being carried by a Republican, it faces an uphill battle...but maybe the pro-environment purpose of the bill will help it carry the day.

Shell narrows negotiations for Bakersfield Refinery

The on-again, off-again refinery in Bakersfield looks like it may have a new owner soon:

New York investment firm Kelso & Co. has emerged as the leading bidder for Shell Oil Co.'s Bakersfield refinery, people familiar with the situation said Thursday.

Kelso and others have been talking to Shell about buying the facility for several months, and Shell in the last week signed an agreement pledging to negotiate exclusively with the privately owned equity firm, the sources said.

It was unclear what price and terms were under discussion, though one person said Shell continued to insist on keeping ownership of a few assets — such as certain pipelines and a fuel-dispensing terminal — that are integral to operating the refinery.

The refinery generated a public outcry from Senator Barbara Boxer when Shell threatened to close it do to low profit-margins.

Thursday, December 09, 2004

San Diego Businesses feel electric shock

Following the rise in energy prices as a result of the 2000-01 California Energy Crisis, the State entered a recession. As energy prices rise in San Diego, businesses are starting to feel the pich again:

The $733 million in new electricity costs levied on San Diego Gas & Electric customers last week could hit local restaurant owners with increases of nearly 19 percent in coming years.

Factories, school and business could also face double-digit rate hikes, according to projections released yesterday by SDG&E of how the new costs will affect customers.

While releasing the numbers, the local utility also confirmed that it will soon ask the California Public Utilities Commission to reconsider its decision to impose the new costs...

According to SDG&E projections released yesterday, the proposal would increase annual power bills for a typical restaurant from about $58,000 this year to more than $69,000 by 2008, when they would begin to decline.

Electricity bills for a high school would increase from about $84,000 this year to about $97,500 in five years, the utility said.

The new cost would hit SDG&E's biggest power users – industrial customers – the hardest. Their average yearly electricity bills would rise by $500,000, from $2.9 million to $3.4 million within five years, the utility said.

BREAKING-- NIMBYs oppose power plant

This is a story that could be in the can, left to simply fill in the blanks:

A group of residents and environmental activists shut down the main gate of a power plant in Hunters Point on Wednesday to protest pollution they say is sickening neighborhood children and years of what they consider broken promises to close the facility.

Braving a strong cold rain, the protesters called on the plant's owner, Pacific Gas & Electric Co., to close the power station next year, criticizing a recently announced agreement that would shut the plant by the end of 2006.

"This plant is a destroyer of our lives and our well being,'' said Marie Harrison, a member of the Hunters View Tenants Association. "You can't just keep overlooking the people. This plant could have been shut down three years ago, and the lights would not have gone out.''

San Francisco and state officials are working on a plan to close the PG&E plant and a facility owned by Mirant Corp. on the city's central waterfront east of Potrero Hill. But state authorities want to ensure that if the plants are shut down, the power they produce will be replaced through new sources of energy and upgrades.

Having the cake and eating it too is always the toghest thing to do...

DWP Cites Gas Price Volatility as Greatest Challenge

In Mayor Hahn's absence, Ron Deaton, head of the Los Angeles Department of Water and Power spoke before the Valley Industry and Commerce today. He told the regional business leaders that the number-one challenge to the agency was volatility in the price of natural gas. That falls in line with statements from the leading business group in Ventura County, VCEDA, which is encoraging the development of liquefied natural gas facilities in order to increase supplies of the commodity.

Wednesday, December 08, 2004

NorCal Spared South's Energy Woes for 2005

Northern Californians will be sitting pretty as Southern Cal faces energy shortages next summer, or so the experts say:

Southern California could run low on electricity in the summer of 2005 even if the weather stays mild, state energy officials warned Tuesday.

Average summer weather could force the region to dip into its power reserves in September, according to the California Energy Commission. Hot weather could drain those reserves completely -- possibly triggering blackouts.

"I'm as concerned about next year as I was in 1999 about the year 2000," said commission Chairman William Keese, referring to the year when California's newly deregulated power market melted down.

Northern California, in contrast, should have more than enough juice next year to keep its air conditioners and server farms humming. Not until 2008 does the region risk tapping into its reserves in hot weather.

"We don't see a problem right now in Northern California," said Bob Therkelsen, the commission's executive director.

Locky Los Angelenos, however, should be spared, as the one thing the LADWP seems to have done right lately is secure electric generation.

Tuesday, December 07, 2004

Lynch, Sempra engage in final battle

Outgoing PUC Commissioner Loretta Lynch is certainly not exiting quietly. The Gray Davis appointee is looking to take Sempra out with her:

Within the last month, San Diego's Sempra Energy accused Lynch of a vendetta against the company and blamed her for a PUC investigation that concluded it rigged natural gas prices during the power crisis.

At the same time, a Sempra executive sued Lynch for invasion of privacy and said she may have violated state law for her role in a covert videotaping that captured him talking of political payments to influence the PUC.

What's more, Lynch's central role in an investigative television report about energy company influence at the PUC – a report that included the covert videotaping – sparked protests from the PUC president and others about unfair journalism.

...She leaves as a commissioner at year's end vilified by energy companies and applauded by consumer advocates, who note a curious turn in her career.

Of course, the role of PUC Commissioner is not to be loved by energy companies.

Gewe to leave DWP

Gerald Gewe, who has managed water operations at the Los Angeles Department of Water and Power is leaving his post, according to LA Times reports. That makes three top managers who have left LADWP recently, as the organization is embroiled in scandal. Ironically, for once, Los Angeles Mayor Jim Hahn is not using LADWP to boost his own image. He should be describing the goings-on at LADWP as a shake-up...instead, by allowing people to "retire", they are abdicating responsibility to the organization at large--which is not a good sign for the Department's future.

Environmental Rules Eased for Bakersfield Refinery

Those who say that there are no ties between the environmental contraints to operating a refinery and the cost of gasoline should think twice after hearing the latest about the Shell Refinery in Bakersfield:

Shell said it would keep the Bakersfield facility open through the end of this year. And it pledged to continue operations in Bakersfield for an additional three months — through March 31 — if it won a waiver of certain emissions limits contained in a 2001 consent agreement between the oil company, the Environmental Protection Agency and the Justice Department.

On Monday, Shell said it got the necessary dispensation on nitrogen oxide emissions.

The accord with the federal officials, which must be approved by a federal judge in Texas, would ease layoff worries for many of the 250 employees at the relatively small refinery, which produces 2% of California's gasoline supply and 6% of its diesel. It also would keep alive the possibility that a buyer could step in to save the facility and stop car-dependent California from losing badly needed fuel-production capacity.

This is why I find it ironic when the same U.S. Senators who lament the closing of the refineries are the same ones pushing such harsh regulations.

Monday, December 06, 2004

Nuclear Power Future Unclear in California

The State Public Utilities Commission will decide the future of nuclear power in California as it considers permits for Diablo Canyon and San Onofre:

Southern California Edison, which operates San Onofre in northern San Diego County, plans to spend an estimated $680 million to replace four generators that serve two reactors. Pacific Gas & Electric estimates that installing eight new generators at Diablo Canyon, north of San Luis Obispo, will cost $706 million.

At San Onofre, removing the massive generators would require cutting holes in the protective containment buildings and releasing the tension from steel support cables — a delicate and expensive operation. The work would be somewhat simpler at Diablo Canyon, which has large hatches through which the generators could be removed.

If the work is not done, the generating stations may have to be shut down in five to 10 years as their steam-driven generators deteriorate, plant owners say.

But two utility companies that share ownership of San Onofre with Edison, along with some consumer and environmental groups, wonder if the repairs would be worth the expense — and if ratepayers would get stuck with unexpected bills.

Without these generation sources, California will have to rely more heavily on sources such as LNG.

Thursday, December 02, 2004

Act of Congress may mess with LNG Permitting Processes

Currently, the permitting processes for four LNG terminals are under way in California. The most advanced, BHP Billiton's Cabrillo Port is undergoing a joint EIR/EIS Process through the US Coast Guard and State Lands Commission.

Because the Sound Energy/Mitsubishi proposal is on land, the State Public Utilities Commission claimed to have sole permitting authority. This led to a battle with the Federal Energy Regulatory Commission. Now, Congress is stepping in:

A handful of short paragraphs tacked onto a massive federal spending bill could weaken California's fight to approve or veto the location of liquefied natural gas terminals planned for the state.

The rider asserts that federal law passed decades ago gives federal regulators, not state officials, the exclusive legal right over LNG siting decisions.

The four-paragraph rider, attached to a report on the lengthy congressional appropriations bill, specifically takes issue with the California Public Utilities Commission.

The PUC is locked in litigation with the Federal Energy Regulatory Commission over the siting authority question. Both sides contend they have exclusive jurisdiction to rule on a proposed LNG terminal planned in Long Beach. The U.S. Ninth Circuit Court of Appeals is considering the question.

The huge appropriations bill has been passed by both houses of Congress. But it has not been sent to President Bush because of a dispute over a section related to income tax.

Of course, it is unclear whether and how such a change would affect projects already well into the permitting process.

San Diego Firm Marketing Enviro-Friendly Battery

Venture Capitalists are investing in environmentally-friendly batteries:

In the past 18 months, the venture firms have poured $13.75 million into PowerGenix, which has developed a rechargeable nickel-zinc battery that the company says delivers more power than competing batteries and is easier on the environment.

Initial backers include Silicon Valley's Granite Ventures and Technology Partners. They were joined recently by Boston-based Advent International, New York's Braemer Energy Ventures and OnPoint Technologies of Florida.

Even with strong venture capitalists on board, PowerGenix could be fighting an uphill battle. Dozens of companies have failed to bring promising clean-energy technology to market. Carlsbad's Metallic Power, for example, raised $40 million to develop zinc-based fuel cells that would provide backup power to wireless base stations. But the company ran out of money before luring customers and closed last month.

DWP ignored Fleishman fraud warnings

Los Angeles' DWP ratepayers might have saved millions of dollars allegedly-bilked by PR firm Fleishman-Hillard had a 2002 warning been heeded:

Top managers of the Los Angeles Department of Water and Power ignored auditors' warnings about questionable bills submitted by the Fleishman-Hillard public-relations firm years ago -- a revelation Wednesday that renewed outrage over the scandal-plagued $24 million contract.

The municipal utility's own auditors raised concerns in 2002 about $330,000 in bills from the politically connected firm, but then-Chief Administrative Officer Frank Salas of the DWP brushed aside the warnings, according to the agency's director of internal auditing.

Gas Prices going up, up, up!

Although prices at the pump may be on the wane, the prices Californians pay for the natural gas which is pumped into their homes continues to climb. PG&E warns:

With nighttime frost already dusting Northern California, the region's largest utility predicted that its average residential customer will spend about $83.40 each month on gas for cooking, heating and hot water this season, compared to $75.41 last year.

There was a 26.8 percent jump in the average bill last year. And since December 2002, PG&E's natural gas bills have soared by nearly one-third.

Southern California is experiencing record-cold, so I imagine that combined with increased usage, the higher prices will pack a double-punch.

Nuclear plants face hurdles in California

California's two nuclear plants faced hurdles this week. Southern California Edison's San Onofre generator may remain shut down for at least six weeks. "Unit 3 was offline for a 55-day refueling when microscopic cracks were found in water-heater sleeves attached to the pressurizers. The 30 heaters regulate the nuclear reactor's coolant to ensure the water inside the reactor's coil does not boil."

Further North, PG&E's Diablo Canyon facility faced a different obstacle...According to the LA Times, "The California Coastal Commission wants three miles of coastline north of the Diablo Canyon nuclear plant opened to beachgoers.

"The commission staff is recommending that plant owner Pacific Gas and Electric be required to provide public access within two years if the commission approves plans to build a storage facility for the plant's radioactive waste."

Riiiight...just what PG&E needs is the liability of beachgoers coming even closer to its nuclear reactors. Just what is the CCC thinking?

Wednesday, December 01, 2004

Oxnard evenly split on LNG Plan

Opponents of building a liquefied natural gas terminal in Oxnard, CA, have certainly been the most inflammatory, but their numbers were fairly evenly matched by supporters at a public hearing on the BHP Billiton Cabrillo Port EIS/EIR last night, according to the LA Times:

Several speakers alluded to a 1977 study of a proposed LNG facility on Oxnard's shoreline. That study envisioned an accident producing a 60-mile-wide cloud of flame, but on Tuesday, a scientist associated with BHP contended the study was invalid.

It "should be relegated to history and not be used for modern decision-making or to influence public opinion," said physicist Ron Koopman, adding that scientific models available in 1977 were "very primitive by today's standards."

Koopman also said that the experts whose research formed the core of the 1977 study have expressed concern about "the misuse" of their work.

At a hearing in March, only a handful of people had anything good to say about the BHP project, which has been opposed by the city councils in Oxnard and Malibu. On Tuesday, however, a number of speakers said they welcomed it as a relatively safe and inexpensive way to secure much-needed energy for California.

The explosive revelations about the 1977 "study" undercut the premise behind local activist Tim Riley's "documentary" about LNG.

Deaton Moves to DWP Digs

Everything old is new again...and after several Olympiads serving as the "sixteenth man" on the Los Angeles City Council as its unelected Chief Legislative Analyst, Ron Deaton begins his duties at the helm of the City's public utility. The Daily News interviews him:

Deaton was reluctant to outline any dramatic initiatives for his first few weeks as general manager of the DWP. The City Hall veteran, who served as the City Council's top adviser but influenced public policy more than mayors or other officials, said he would spend his first few weeks meeting with DWP managers and learning more about the organization.

He said he would move quickly to fill two key vacancies at the DWP: the chief administrative officer position recently vacated by Frank Salas, and the position heading the DWP's water operations, from which Gerald Gewe plans to retire.

``There are no dams about to break,'' Deaton said, wryly referring to the DWP's greatest scandal, the collapse of the St. Francis Dam that killed more than 500 people in 1928. ``I think I will have a few days, a few weeks to get acclimated.''