Foundation for Taxpayer and Consumer Rights alleges LNG-Gate for Governor

The Foundation for Taxpayer and Consumer Rights is taking on Governor Schwarzenegger over his cozy relations with Chevron Texaco and his oversight of the approval process for Liquefied Natural Gas terminals in the State.

"Today's announcement of Chevron-Texaco's purchase of Unocal has a back story that could be the biggest scandal of California Governor Arnold Schwarzenegger's Administration. In July 2004, some of Schwarzenegger's top brass were treated by Chevron-Texaco to an overseas trip -- it included luxury accommodations at the Four Seasons Hotel in Sydney, Australia -- to sell the Governor's people on why Liquefied Natural Gas (LNG) should be California's new source of electricity. Today's announced merger indicates Chevron-Texaco's desire to corner the market on LNG, of which Unocal controls significant supplies in the Far East. It's a $16 billion bet that California will open the door to coastal LNG terminals and make the long-term commitment to gas-produced electricity.

"What kind of insider information could that type of bet hinge on? Schwarzenegger's campaign committees have accepted $222,200 from Chevron-Texaco. Chevron-Texaco's former lobbyist, Patricia Clarey, is now Schwarzenegger's chief of staff. There is no energy company in the state that Arnold's Administration is closer to.

"But if Chevron-Texaco corners the international market on LNG, it will be in the same position to withhold electricity supply and drive up electric prices that Enron and other energy firms like Reliant and Dynegy were in five years ago. (Don't forget Chevron owned about 27 percent of Dynegy when the market was manipulated last time.) And reporting by the Orange County Register-(1) last year showed that Chevron-Texaco shipped three tankers full of California gasoline out of state just as California drivers were paying record prices at the pump.

Of course, a much simpler solution would be to approve an LNG project which does not involve either company--and there are plenty being proposed across the state!