UPDATE: Suit filed against Energy Initiative

The Sacramento Bee has more on the lawsuit to disqualify November's Electricity Re-regulation initiative:

In the lawsuit, the Independent Energy Producers Association asked the California 3rd District Court of Appeal to kick the measure off the ballot, saying that what it tries to accomplish would require a constitutional amendment.

While that can also be done by initiative, it would require more signatures and different wording, according to association attorneys.

The association opposes the initiative because it fears that if approved, it would also limit wholesale sales, effectively driving non-utility generators out of the state, said Executive Director Jan Smuty-Jones.

LADWP purchases natural gas reserves

The leadership of the Los Angeles Department of Water and Power has consistently stated that instability in natural gas prices is one of their greatest concerns. Now, they're doing something to hedge against it.

The Los Angeles Department of Water and Power has led a group of cities in buying natural gas reserves in Wyoming for $300 million to help ensure a stable supply for its power plants, officials announced Wednesday.

The DWP signed a purchase agreement with Anschutz Pinedale Corp. in Denver to buy a portion of the company's natural gas reserves in Sublette County, officials said.

The agency said the acquisition, believed to be the largest natural gas field owned by public power utilities, will help stabilize the "single most volatile component" of the DWP's operating expenses. DWP's partner in the purchase is the Southern California Public Power Authority, representing Anaheim, Colton, Glendale, Burbank and Pasadena.

Not everyone is comfortable with the purchase. Los Angeles City Councilwoman Janice Hahn voiced concern that the city has not been in the business of owning a gas field before and that the market could make the purchase a bad decision.

"It's a risky venture," she said. "You are basically banking on the price of gas going up" to justify the purchase.

It seems everyone is betting on the price of Natural Gas going up--otherwise, why the scramble to build LNG facilities up and down the California Coast?!?

Energy Initiative Challenged

Dan Weintraub has the scoop on the challenge to the ballot measure to re-regulate the State's electricity markets:

The Independent Energy Producers are filing a lawsuit today seeking to throw the energy initiative sponsored by The Utility Reform Network off the ballot. The claim: the initiative seeks to use a statute to amend the Legislature's powers over the Public Utilities Commission, which are set by the constitution

Hybrid, Diesel Market Shares to Surge

According to JD Power, we're going to be seeing alot more hybrid and diesel cars on the road in the next 7 years:

A new report from JD Power indicates hybrid cars will clock 3.5 percent of US vehicle sales by 2012, sevenfold higher than their current 0.5 percent of the market in 2004. In the same period, diesels will grow from 3 percent to 7.5 percent of sales. The number of available models in both categories are also expected to climb, with diesel models doubling from 14 to 26, and hybrid models increasing fourfold, from 10 to 44.

Calpine to sell oil and gas business

Power producer Calpine is retrenching into its core business:

Calpine Corp., a leading independent power producer and marketer, on Wednesday said it plans to sell all of its domestic oil and gas exploration and production assets for $1.05 billion.

Under terms of the sale, Calpine has formed a new subsidiary, Rosetta Resources Inc., that is selling 45.3 million shares for $725 million in private placement. Rosetta will use proceeds from the sale, plus $325 million in proceeds from a new credit facility, to buy all of Calpine's domestic oil and gas exploration and production assets.

California Family to test Hydrogen Car

One lucky (?) California family will become the guinea pig for the hydrogen-fueled automobile.

In a long-term road test, John Spallino, his wife and two daughters will begin leasing a silver-and-blue, four-seat Honda FCX on Wednesday to get them to work, school and anywhere else they want to roam.

The Spallinos will provide reports about the car's performance to Honda as part of the auto industry's first private test of the promising technology that produces only one byproduct - water clean enough to drink.

"Maybe this is the technology of the future. Maybe it isn't," said the easygoing Spallino, a financial officer who plans to use the FCX for his 80-mile roundtrip commute from his home in Redondo Beach to Irvine.

"But if I can be part of the evolution of this technology, that would be a lot of fun," he said.

The test could give a push to pollution-free cars, said Lindsay Brooke, a senior analyst for CSM Worldwide, an automotive forecasting company.

One Ventura LNG proposal abandoned

The Crystal Energy proposal to build a liquefied natural gas terminal on Ventura County's Platform Grace is a thing of the past.

Australia's Woodside Petroleum Ltd. (ASX: WPL.ax) and Houston-based Crystal Energy LLC have ended an agreement to jointly develop a $350 million liquefied natural gas (LNG) import terminal off the United States' west coast.

Australia's biggest independent oil and gas producer said it would consider developing its own LNG terminal to supply the United States, where it forecasts LNG demand to grow more than eight-fold over the next 20 years.

"Both companies will continue discussions over the supply of LNG to Clearwater Port, although Woodside will concurrently consider the possible development of its own LNG receiving terminal off California," Woodside said in a statement to the Australian Stock Exchange on Monday.

Plans remain intact for the Cabrillo Port off the Oxnard coast and for the Mitsubishi/Sound Energy terminal in Long Beach.

Oil 2/3 of way to historic highs

Pushing past $60 a barrel, oil is two-thirds of the way to its historic highs:

After climbing as high as $60.95 per barrel, an intraday record, the front-month August contract for crude rose 70 cents to close at $60.54 a barrel on the New York Mercantile Exchange. It was the highest settlement on record at Nymex, where crude futures began trading in 1983. The previous settlement high was $59.84 a barrel, set Friday.

Adjusted for inflation, prices peaked in 1980 above $90 a barrel.

So we could be looking at $4 a gallon gas at this rate!

LAT Discovers LNG outside of Long Beach

The Los Angeles Times has put a disproportionate emphasis on the Liquefied Natural Gas proposal in Long Beach, and in today's editorial, it seems they only learned of other projects in the State when Schwarzenegger endorsed the Cabrillo Port:

Gov. Arnold Schwarzenegger on Thursday voiced support for a terminal proposed in federal waters 14 miles off Oxnard. There are three other proposals for the state, one at the Long Beach port, easily the most troubling site. The port is within a couple miles of heavily populated areas and a catastrophic accident there could cripple vital shipping.

Though the governor favors what's probably the safest site, an issue this important calls for a more studied approach. Safety should not take a back seat to federal regulators' eagerness to build terminals.

If Times' editors read more than just their own coverage, they'd know that there has been an exhaustive State- and Federal-process that has been ongoing for a year and a half. That's hardly a rush to judgement.

Solar Plan burns up opponents

Governor Schwarzenegger had a simple plan--install a million solar panels across California in order to help save the environment. But in Sacramento, nothing is ever so easy:

Schwarzenegger is thinking big: He wants to increase the state's total solar output from about 101 megawatts to 3,000 megawatts by 2018. That's enough nonpolluting power to run about 2.25 million homes and eliminate the need to build six large natural gas-fired generating plants.

The governor isn't the only Hollywood star backing sun power. Actors Edward Norton and Ed Begley Jr., both well-known environmental activists, spoke at a recent media event in South Central Los Angeles in support of SB 1.

But the bill, despite such high-profile backing and a bipartisan 30-5 vote in the state Senate, is facing potential difficulties in the Assembly. Opposition from business lobbies, utilities, unions and even consumer groups is setting the stage for what could be a close vote. The first hint of how the bill will fare in the Assembly is expected to come today when it faces its first hearing in the Assembly Utilities and Commerce Committee.

Most of the complaints about the governor's solar program center on its estimated 10-year, $2-billion-to-$3-billion price tag. Much of that would be paid by power users in the form of surcharges imposed by the California Public Utilities Commission.

Proponents estimate that the annual rate hike would be about $15 per residential customer. But business groups — usually among Schwarzenegger's staunchest supporters — complain that increases for large power users such as big-box retailers and industrial operations would be much higher — a key point in a state that already has the highest electricity rates in the continental United States.

Scientist: Ethanol a waste

Despite Archers Daniels Midland's best PR efforts and campaign contributions, they cannot change the basic science of ethanol:

Ethanol, touted as an alternative fuel of the future, may eat up far more energy during its creation than it winds up giving back, according to research by a UC Berkeley scientist that raises questions about the nation's move toward its widespread use.

A clean-burning fuel produced from renewable crops like corn and sugarcane, ethanol has long been a cornerstone of some national lawmakers' efforts to clear the air and curb dependence on foreign oil. California residents use close to a billion gallons of the alcohol-based fuel per year.

But in a recent issue of the journal Critical Reviews in Plant Sciences, UC Berkeley geoengineering professor Tad Patzek argued that up to six times more energy is used to make ethanol than the finished fuel actually contains.

The fossil energy expended during production alone, he concluded, easily outweighs the consumable energy in the end product. As a result, Patzek believes that those who think using the "green" fuel will reduce fossil fuel consumption are deluding themselves -- and the federal government's practice of subsidizing ethanol by offering tax exemptions to oil refiners who buy it is a waste of money.

China thirsty for oil, willing to pay

The Chinese bid to purchase oil giant Unocal is a clear indicator of a market force that has driven oil prices up in recent years--China's growing economy needs the fossil fuel.

China's takeover bid for Unocal Corp. makes clear to sticker-shocked Americans that the 1.3 billion Chinese people are demanding an ever-larger supply of the world's energy to fuel their booming economy and are willing to get it wherever necessary.

From Central Asia to Latin America, Africa, the Middle East and even Canada, Chinese firms are pumping oil and natural gas in many areas that the United States was counting on to meet its own record-high demand.

"We need to supply our people, and like every country we need to buy oil from around the world," said Zhou Dadi, director general of the Energy Research Institute, the central government's main policy agency on the subject. "This is part of globalization. It is a strategy of sustainable development. It is part of a historical process."

Clearly relying on oil is a different concept of "sustainable development" than we have in the U.S. My hunch is that a truly sustainable development model will emerge as a result of market forces--whereby we rely less on oil globally and more on alternative fuels.

Row erupts over Governor's LNG remarks

Governor Schwarzenegger's support for the Cabrillo Port LNG terminal has raised tempers along the coast among the NIMBY set:

Project opponents in Ventura County fear the governor's remarks could give the Oxnard project the edge.

"I've taken the opinion from the beginning that, unless proven otherwise, I am strongly opposed to this project. And nothing the governor said has changed that," Oxnard Mayor Tom Holden said Friday.

In nearby Malibu, where many residents dislike the prospect of any offshore energy facility, Mayor Andy Stern also expressed concern about the governor's comments.

"I'm very disappointed he would make up his mind before the process is completed," Stern said. "I'd like the governor to retract his statement and say he has an open mind until all the facts are in."

Of four possible locations, the two getting the most serious attention are the Oxnard proposal from Australia-based BHP and the Long Beach plan by a subsidiary of Tokyo-based Mitsubishi Corp.

Some critics of the proposed Long Beach terminal two miles from the city's downtown say they are heartened by the governor's preference for an offshore site.

"Having an area offshore is significantly different than putting thousands or hundreds of thousands of people at risk," said Long Beach Councilman Frank Colonna, who opposes the Mitsubishi terminal. "Not that we're opposed to the value of LNG, but let's keep it away from the people."

Those upset by Schwarzenegger's remarks, just as they were when Congress gave onshore LNG siting authority to the Federal Energy Regulatory Commission, clearly don't understand that neither the Governor nor the FERC have the final say on the Oxnard project--that will be in the hands of the Coast Guard and State Lands Commission.

Hybrid Hybrid pulls power from grid

Most owners of hybrid cars that I have spoken to tell me that they are disappointed in their gas mileage. Perhaps noticing a new market, entrepreneurs are developing a way to charge your hybrid vehicle from home--and increase your gas mileage to boot.

By replacing the Prius' batteries with a more powerful array and recharging it using a standard electric outlet at home, engineers have enabled the hybrid to get more than 100 miles per gallon of gasoline.

"We want to get people thinking of [plug-ins] as a real alternative" in the country's long-term energy plan, said Felix Kramer, founder of CalCars.org, an advocacy group in Palo Alto.

The idea of plug-in hybrids is generating a lot of buzz in energy circles because of the work of a start-up Monrovia firm, Energy Control Systems Engineering. The firm bought a Prius and converted it with its own system.

Co-owner Greg Hanssen now tools around Southern California in the bright blue plug-in Prius prototype. The car can deliver 150 to 180 mpg for up to 35 miles of low-speed, around-town driving and can average 70 to 100 mpg on longer trips at higher speeds.

The South Coast Air Quality Management District recently gave the company $130,000 to convert four Priuses to plug-ins that will be tested in several car fleets.

Aren't we really just shifting the pollution from a mobile source (the car) to a stationary source like the power plant?!? How many gallons of LNG will have to be imported in order to generate the electricity so some hybrid car uses less gasoline?!?

"Solar Trees" provide power, shade

Although similar projects have been operational at public facilities (like the DWP headquarters) the idea of putting solar panels over parking lots is now promising to become more than just a demonstration project:

The company's so-called Solar Grove is an array of modernistic stanchions – "solar trees" in Kyocera's lingo – supporting about 1,600 photovoltaic modules over an employee parking lot adjacent to its North American headquarters at Balboa Avenue and state Route 163.

Beyond providing 186 covered parking places and a small fraction of the energy the company uses at its headquarters, Kyocera is marketing Solar Groves as a part of an effort to double revenue this year from its solar energy products.

The diversified manufacturer of electronic components sought to enhance the appearance of the arrays by emphasizing a tree-like aspect, with each solar canopy supported by a single stanchion but shading six vehicles.

Kyocera declined to specify the cost of the new solar array, noting that the facility is a prototype. But the company said about 40 percent of the cost was covered by California rebates for solar projects and that it would benefit from federal and state tax credits.

Schwarzenegger supports Cabrillo Port Plan

Officials at Australian resources company BHP Billiton should be pleased, as Governor Schwarzenegger tacitly endorsed the Cabrillo Port LNG facility:

The Republican governor voiced his support for the Ventura County offshore site, mainly because he believes it is the safest of three California options. The others are in the Port of Long Beach and at the Platform Grace oil facility, offshore from the Los Angeles-Ventura County line. Two other possible LNG locations under consideration are off the coast of Baja California in Mexico.

"I think the key thing is public safety on all of this," Schwarzenegger told reporters during a brief question-and-answer session following his remarks encouraging energy conservation at the California Independent System Operator in Alhambra.

"And I think that we have established - I think that the one, for instance (off) Oxnard, where you build it out approximately 11, 12 miles off the shore, could be probably the most safe one for California."

Of course, the Cabrillo Port proposal must be approved by the U.S. Coast Guard and State Lands Commission first...but having such a public endorsement is a plus.

Unocal Deal about more than $$$

With the bidding war heating up for California energy gian Unocal, it is becoming clear that the end result won't be all about the money:

Most takeover battles can be settled by price - the highest bidder wins. But judging by the sharp reaction yesterday in Washington, that may not be the case with Unocal.

Just a day after the China National Offshore Oil Corporation, or CNOOC, one of China's largest state-controlled oil companies, made an unsolicited bid of $18.5 billion for Unocal, senators and representatives, as well as lawyers, bankers and lobbyists, are taking jabs at what may become one of the thorniest strategic business challenges facing the administration.

At issue is whether CNOOC can buy Unocal, which in April agreed to a $16.4 billion merger deal with Chevron, the American energy giant.

The unexpected foreign bid for Unocal comes at a time when oil prices are hitting $60 a barrel, energy reserves are gaining more value, and the United States is concerned about its own oil and gas resources. At the same time, the administration needs to work with China on trade and currency issues, even as concerns are increasing about the growing economic power of China.

"It does raise questions about how much of the country we are willing to sell to a Communist country that we might be fighting someday," said Michael O'Hanlon, an international military specialist at the Brookings Institution. But he added, "I'd be surprised if we really fall on our sword to prevent the sale."

Little Hoover opposes Energy Overhaul

The Governor's plan to consolidate the numerous energy agencies in the State was dealt a setback by the Little Hoover commission:

Members of the Little Hoover Commission voted 7-1 against a Schwarzenegger plan to create a Department of Energy and transfer some duties between the state's two major energy commissions.

The vote may play a crucial role in swaying the Legislature, which has the power to kill the reorganization. Senate President Pro Tem Don Perata, D- Oakland, has already indicated he does not support the governor's proposal.

Members of the Little Hoover Commission voiced concerns that one part of the plan to shift some responsibilities to the state Energy Commission from the Public Utilities Commission was illegal.

They also said another facet of the proposal gave too much power to a new secretary of energy position.

Schwarzenegger's press secretary, Margita Thompson, said that the Little Hoover Commission had raised "an important technicality'' and that the governor will continue efforts to "streamline the state's convoluted energy regulatory system.''

Governor calls for conservation

Taking proactive steps to avoid an energy crisis, Governor Arnold Schwarzenegger is asking Californians to cut back their electricity consumption before there is a problem:

The governor made the announcement on Thursday

"In 2000 and 2001, Californians conserved power in record amounts," said Schwarzenegger in a news release. "Their actions reduced blackouts and saved the state millions of dollars. While we anticipate ample power supplies across the state, exceptionally hot weather or other extraordinary events may cause our power supplies to tighten. Because of that, I'm asking our citizens to revive their energy conservation efforts."

The state debuted a series TV commercials on Thursday that were part of a Flex Your Power campaign that would encourage residents conserver during peak usage periods during the day.

$1 million slated for energy efficiency institute

As part of its bankruptcy settlement, Pacific Gas and Electric will donate $1 million towards a university energy efficiency institute in Northern California:

The grant will be awarded to a university in Northern California for the development of energy efficiency technologies and the removal of barriers to their rapid commercialization, the fund says.

"Increasing energy efficiency is the single most important step California can take to minimize the long-term cost of reliable energy services," says Michael Peevey, chairman of CalCEF and president of the California Public Utilities Commission, in a written statement. "Establishing a university center on energy efficiency is a natural way to meet the state's goals by tapping into a wealth of academic expertise in developing and bringing innovative technologies to market."

Chinese make bid for Cali Oil Giant

ChevronTexaco's plans to take over West-Coast oil giant Unocal hit a rough patch when a Chinese oil company sought to out-bid them this week:

A state-controlled Chinese oil firm is challenging Chevron's plans to buy Unocal, touching off an international fight over petroleum at a time of dwindling reserves and soaring prices.

The China National Offshore Oil Co. announced Wednesday a cash offer of $18.5 billion for Unocal, an El Segundo (Los Angeles County) company with ample reserves of oil and natural gas. The bid is roughly $1.5 billion higher than Chevron's, which includes a mix of cash, stock and debt.

Both Chevron and its rival -- 70 percent owned by the Chinese government and commonly known as CNOOC -- want Unocal's reserves to shore up their own, since finding and tapping new oil fields has grown increasingly expensive.

Senate approves FERC Control over LNG

The United States Senate has joined the House of Reporesentatives in granting authority to the Federal Energy Regulatory Commission for the permitting of onshore Liquefied Natural Gas terminals.

The Senate voted today to give federal regulators the last word on the location of liquefied natural gas terminals, despite objections from governors, including California's Arnold Schwarzenegger, that states should be an equal partner in deciding where the controversial facilities are built.

Sen. Dianne Feinstein (D-Calif.) led a bipartisan group of senators in an attempt to add to energy legislation a provision that would give governors an opportunity to veto projects they consider a safety risk. The measure was rejected 52-45.

The House-approved energy bill includes a similar provision that would give the Federal Energy Regulatory Commission the final say over where the terminals are built, virtually ensuring that the measure will be included in any final bill that emerges from Congress.

The vote would seem to run counter to the Republican-controlled Congress' tendency to support states' rights.

But President Bush has pushed to give federal regulators the final decision over liquefied natural gas projects, expressing concern that bureaucracy has delayed projects critical to ensuring adequate supplies of natural gas at affordable prices to fuel the economy.

"There is a lot of talk about gasoline, a lot of speeches being made about prices at the pump. That's by far not the biggest problem we have in the United States right now," said Sen. Lamar Alexander (R-Tenn.), a former governor. "Our biggest challenge is the price of natural gas."

Long Winter may be Over for Nuclear Industry

The President may not be able to pronounce the name of the power, but the Nuclear Industry is poised for a rebound during his second term:

Along the streets of this economically depressed farming town, optimism is running high that a proposed nuclear power plant could bring in new jobs, give a boost to local retailers and increase taxes for schools.

The U.S. has not started a reactor project for 29 years, but President Bush is calling for a new era of nuclear power, saying it would reduce air pollution and dependence on foreign energy. If new reactors are built, the first could go into Clinton or two other possible sites nationwide.

"It is the best option for power," says Stan Winterroth, a high school shop teacher in Clinton. "I don't agree with President Bush on anything else, but I think he is right on the issue of nuclear power."

To promote his program, Bush is to visit Calvert Cliffs Nuclear Power Plant in Maryland today. It will be the first time a president has stepped inside a nuclear plant since Jimmy Carter rushed to Three Mile Island in 1979 to calm public fears just after the reactor's partial meltdown, industry officials say.

The Senate, meanwhile, is preparing subsidies and incentives for utilities to build nuclear plants. The nuclear industry has poured hundreds of millions of dollars into new technology in recent years. And the Nuclear Regulatory Commission has hired scores of engineers to accommodate an atomic renaissance.

Bush Administration Pushes Wind Initiative

Anyone who thought President Bush was a blow-hard when it came to supporting clean energy should give pause after seeing the latest news from Washington:

Many more windmills will be twirling in California under Bush administration plans spelled out Tuesday.

By streamlining permits and clearing hurdles, administration officials hope to encourage the turbines already plentiful along the Altamont and Tehachapi passes. An additional 72,300 acres of federal land in California appear particularly ripe for use.

"We're serious about renewable energy being part of the energy picture," Assistant Interior Secretary Rebecca Watson said Tuesday.

The administration's wind-power push is spelled out in a three-volume environmental study released Tuesday by the Bureau of Land Management, just as Congress considers a long-stalled energy bill. The national-level effort also comes as California regulators urge the state's utilities to squeeze more energy from renewable sources.

By 2025, the BLM estimates an additional 3,240 megawatts of electricity can spin from new wind turbines on agency land. Nearly half of this would come from California; in particular, from sites in the Southern California desert.

Senate approves Survey of Offshore Resources

Hoping to reduce American dependence on foreign oil, the U.S. Senate moved forward with a study to look into off-shore resources:

Jittery about political fallout from high gasoline prices, the Senate advanced a measure Tuesday that would allow a survey of offshore oil and gas resources, overriding the objections of coastal-state lawmakers.

The critics warned that the survey could prove the first step toward overturning the decades-old moratorium on new drilling in most U.S. coastal waters.

Ignorance is bliss. If we don't know what's there, we cannot drill for it.

Toyota Brass: Hybrids not worth it

A Toyota executive confirms I've been saying all along.

For the money, Hybrids aren't worth it.

Electric Regulation makes it to Ballot

It's official. California voters will decide whether to turn back time and re-regulate the State's electricity markets. Dan Weintraub suggests that this article is a must-read to understand what we'll be voting on.

Like the claims and counterclaims that wracked the state during the 2000-2001 energy crisis, nothing about the electricity initiative is likely to be simple.

Despite the convenient labels, California never really deregulated electricity when the state Legislature changed the ground rules of the once-monopoly business in 1996.

Now, the ballot measure wouldn't really re-regulate, although the consumer group promoting it likes to call it a "re-regulation and blackout avoidance" initiative.

What it would do is thwart any expansion of something called "direct access," a way that big businesses and other power users can bolt from their utilities and buy power from independent providers.

Shocking. People would try to mislead voters to support or oppose a ballot measure. Truly shocking.

One indicator for me at least comes from CPUC President Michael Peevey--who would stand to gain more power from an expanded regulatory scheeme. Last week speaking to a business group in the San Fernando Valley, he said he's personally oppose the measure because it does not solve the problems that ail the system. Makes sense to me.

Norway, Nigerian unrest push oil prices higher

Oil prices keep testing our pocketbooks. Whether $50 a barrel oil was sustainable is no longer a question. Now, we're pushing $60, and we have Norway and Nigeria to blame:

This year's high prices haven't curbed growing demand. China, India and the United States continue to burn as much as oil as they can get. Most of the world's oil-rich nations are pumping close to capacity, although the Organization of the Petroleum Exporting Countries has promised to produce more.

...Some of the rise can be blamed on speculative investors, who have poured money into oil trading this year. But global events also played a role, especially in the past week.

-- Embassy closure in Nigeria. Recurring violence in Nigeria often triggers price spikes for crude. After the United States closed its embassy in Lagos on Thursday because of a threat from Islamic militants, oil's price jumped nearly $2. The embassy reopened Monday, but the incident heightened fears about terrorist strikes in oil-producing nations.

-- Labor unrest in Norway. Politicians who fret about oil supplies coming from unstable countries usually don't mean Norway. But a Norwegian labor union has threatened a strike that could block 900,000 barrels each day coming from the country's offshore oil fields.

-- OPEC moves. OPEC vowed last week to increase production, adding Monday that it would try to pump an additional 500,000 barrels per day. But analysts say that most OPEC members already produce as much oil as they can, rendering the promise moot.

Still, some oil industry analysts consider the prices overblown. Although supplies remain tight, they are adequate, these analysts insist. And the high prices eventually will cut into demand.

Will they cut into demand? Really? Or will the need for oil displace other uses for peoples' disposable incomes?

Finding a fix to High Gas Prices

With oil inching above $60 a barrel, California is struggling to find ways to keep gas prices under control:

"Doing something that expands supply and reduces demand is absolutely necessary," said Lockyer, who convened a gas-price task force in 1999 and once likened the state's refiners to the Organization of the Petroleum Exporting Countries oil cartel. Two years ago, Lockyer bought his black Prius, which runs on gasoline and electricity, to show his commitment to burning less fuel.

Taming California's energy prices will require using less gasoline and diesel, making or importing more fuel or tinkering with the way refiners and retailers operate, according to interviews with two dozen economists, consumer advocates, oil executives and government officials.

Expensive gasoline is a national problem, reflecting the steep cost of crude oil. But the situation is particularly serious in California, which has some of the highest gas prices in the United States because of a series of actions by regulators, oil companies, community groups and others. Step by step over the last decade — starting with mandates for a special cleaner-burning fuel and adding in oil company mergers, community resistance to refinery expansions and unrestrained demand — the Golden State's fuel business has been transformed into a kind of dream market for oil refiners.

The strains on California's fuel sector won't be easily fixed, the experts stressed. Some ideas are likely to be painful and politically unpopular.

L.A. Lags in BioDiesel

Los Angeles tries to be a leader in environmentally-friendly policies, but policies do not always yield results.

For Southern California users like Dervaes, biodiesel is more than a fuel -- it's a lifestyle.

They're devotees willing to pay more, home-brew or drive hours in search of their fuel. They preach sustainability, cleaner cars and ending the nation's dependence on foreign fuel. "We feel it's worth the extra effort on our part. We feel like we're in a battle for our future and this is our salvo," Dervaes explained.

Despite avid users, Los Angeles is a biodiesel wasteland. There are no stations that sell 100 percent biodiesel, called B100, and only one station, in South Los Angeles, that sells a 20 percent biodiesel blend.

Instead, users must drive to Ventura County or arrange for a fuel company to deliver a tank of biodiesel. Or they home-brew, which is time-consuming and complicated for the beginner. Most folks would prefer to buy biodiesel from their local gas station.

Regulation keeps gas prices high

Here's a shocker: clean air rules forced competition out of California's gasoline market leaving the remaining refiners in charge of pricing, and making a pretty penny.

California refiners are simply cashing in on a system that allows a handful of players to keep prices high by carefully controlling supplies. The result is a kind of miracle market in which profits abound, outsiders can't compete and a dwindling cadre of gas station operators has little choice but go along.

Indeed, the recent history of California's fuel industry is a textbook case of how a once-competitive business can become skewed to the advantage of a few, all with the federal government's blessing.

"They don't have to collude, they don't have to form a cartel, they don't have to be monopolists," said Stanford University economist Roger Noll. "All they have to do is take advantage of the crazy rules."

OK, so the economics lesson is not suprising, but the fact that this got published in the Los Angeles Times truly is!

Mexico eager to beat US in LNG race

Scared off by NIMBY homeowners and vocal environmentalists, many companies looking to import liquefied natural gas to the West Coast are bypassing California and making a run for the border. And Mexico seems willing to take them:

The same week of the Long Beach vote, Mexico's energy ministry disclosed that Spanish energy giant Repsol YPF had proposed building a natural-gas terminal in the port city of Lazaro Cardenas — one of half a dozen such projects moving forward along Mexico's Pacific and Gulf coasts.

"Assuring a sufficient supply of energy with international standards of quality and competitive prices is the first strategic objective of the Mexican government's energy sector," said Carlos Garza Ibarra, Mexico's energy undersecretary.

Coastal natural-gas terminals, he said, are a key to the country's efforts to guarantee future supply "without pressuring the North American market, which is already at a deficit."

The public opposition that has stopped several California projects is present to some degree in Mexico, with many Baja Californians having raised concerns that echo those being heard in Long Beach.

But such protests have generally been trumped by a judicial system deferential to federal authorities, who are pushing imports of natural gas in liquefied form as an answer to the country's pressing need for the fuel.

What local opponents of LNG do not realize is that by delaying or blocking projects in California--where tough safety and environmental regulations and enforcement will guarantee clean and safe projects--they are pushing the development to Mexico, where environmental standards are lower and the risks of an environmental catastophe will be greater. But heck, it won't be in their back yards!

PG&E seeks to raise rates

In order to pay the cost of high-tech metering, Pacific Gas & Electric is asking the Public Utilities commission for a rate hike:

If regulators agree, the utility would end a 100-year tradition of having meter readers go door-to-door to record individual usage.

Instead, electric meters would send such information directly to PG&E computers through the electric lines and gas meters, via radio signals.

First, however, PG&E will have to persuade the state Public Utilities Commission that the $1.46 billion price tag is a good investment. Representatives of small customers are vowing to fight.

"It's just pie in the sky to think that those customers are going to see anything other than increased rates as a result," said Bob Finkelstein, executive director of The Utility Reform Network in San Francisco.

PG&E is seeking to raise residential rates next year by 1 percent for electricity and 1.1 percent for natural gas to pay for the program.

If such a move came with real-time monitoring, the new meters could end up promoting energy conservation.

Demand fuels desire to import Natural Gas

Limited domestic supplies and surging demand for natural gas is fueling the push to import LNG.

International energy companies, the Bush administration and governments in gas-rich countries are aggressively championing the creation of a global market for natural gas, with the United States at its center as the largest importer. They are promoting the fuel as more plentiful and less polluting than oil and needed to sustain economic growth.

But in the same way that American oil output began to fall short in the 1960's and has steadily diminished as a source of energy, the United States is already running low on its own production of natural gas. To fill the gap, vast amounts of gas will have to be imported -- in liquefied form, arriving by tanker on the coasts of the United States or elsewhere in North America.

Like oil, large reserves of natural gas are found far from the big markets for the fuel, in countries like Qatar, Iran, Russia, Angola, Yemen and Algeria. Competition for gas projects in these places has prompted a frenetic race among international oil companies to meet demand for the fuel in rich industrialized countries.

Let's just hope that with all the competition, at least a few of the projects actually come to fruition!

Solar Plant Slated for San Juaoquin Valley

Independent investors are looking to invest in Solar Generation in California's Central Valley.

A Michigan-based energy company is considering building a $250 million solar-roofing manufacturing plant in the central San Joaquin Valley that could create up to 3,000 good-paying jobs, a company official said Wednesday.

Energy Conversion Devices Inc., a publicly traded company valued at $620 million, is looking for a site for a 350,000-square-foot facility.

Being from Michigan, they must have never heard of the Tulare Fog!

Deal could stabilize Bay Area Gas Prices

An agreement between Valero Energy and the State of California could mollify price swings in the Bay Area's gas price markets.

In the California pact, Valero assured Attorney General Bill Lockyer that it will open storage capacity for nearly 1 million barrels of crude oil in the Bay Area.

"Lack of storage has been a significant contributing factor to the dysfunction that afflicts California's gasoline market and the exorbitant prices suffered by this state's drivers," Lockyer said in a statement. "This settlement will help stabilize the market in Northern California."

San Antonio-based Valero must build two 450,000-barrel crude oil storage tanks at its Benicia facility by May 31, 2011. Oil stored in tanks leased from Kaneb in Martinez will be transferred to Benicia.

This will free 1 million barrels of storage capacity at the Martinez facility, which will get new owners under a settlement with the Federal Trade Commission. The pact requires Valero to sell Kaneb gasoline and petroleum facilities in New Jersey, Pennsylvania and California, specifically in Martinez and Richmond.

Because there are no fuel pipelines in California, oil is shipped by tanker, a journey that can take two to three weeks. Additional storage allows increased imported supply for refineries, experts say.

In the next 20 years, Northern California will need to increase crude oil storage capacity by an estimated 3 million barrels, according to the California Energy Commission.

Of course, that means squat for people in Southern California.

FERC to Utilities: Sell Lines

If you can't successfully deregulate energy markets, try, try again...or so it goes for the Federal Energy Regulatory Commission who is trying to take another bit out of the dereg pie:

U.S. regulators said Wednesday that they planned to change a policy that aimed to encourage electric utilities to sell their high-voltage transmission systems, saying the original policy led to too few divestitures.

In January 2003, the Federal Energy Regulatory Commission said it would allow transmission companies that are independent of utilities to charge higher rates for the use of their systems.

The agency, which regulates the rates, said the higher return would make owning the transmission lines more attractive and independent companies would be willing to pay utilities more to buy them.

The change proposed Wednesday would allow the higher rates even when a utility retains a stake in the transmission company, FERC Chairman Pat Wood said during a meeting in Washington.

The utility's ownership would be limited to 5% of voting control and 49% of economic interest.

The commission and Congress have offered incentives to utilities to sell their high-voltage systems, saying independent transmission companies will be more likely to invest in the electricity grid and allow power shipments by non-utility generators.

But does the move build any new transmission lines? Otherwise, what's the point?

LADWP: Email = involvement

The Los Angeles Department of Water and Power recently entered into a Memorandum of Understanding with the City's Neighborhood Councils promising them "involvement" in the Department's decicionmaking process. Now the question remains, what does that mean?

The (Neighborhood Council) representatives said they believe new DWP General Manager Ron Deaton, who formerly was chief legislative analyst at City Hall, represents a fresh start at the utility, which has been plagued by a public relations overbilling scandal and critical audits by City Controller Laura Chick.

Deaton said a neighborhood council task force was briefed at least twice on the budget, and that he sent out an e-mail May 31 to the neighborhood councils concerning the need for a water rate hike -- a week before the proposed rate hikes were on the DWP commission's agenda.

Deaton said any proposed rate hike would include at least a 90-day review period by the councils, including the independent review. He suggested the review could be done annually.

"I think that's involvement," Deaton said in an interview.

Oil giants seek to skirt responsibilities for MTBE

In a move that is certain to enrage environmentalists, the oil industry is seeking to absolve itself of responsibility for the seepage of MTBE into California's water supply:

Staring at potential payouts in the billions of dollars, the U.S. oil industry is maneuvering to escape responsibility for cleaning up after MTBE, the now-banned toxic gasoline additive that has seeped into drinking water across the country.

If the campaign is successful, critics say taxpayers will be forced to pick up the unpaid bill.

Oil producers have attached so much importance to immunity from liability that the issue has taken a place right alongside opening the Arctic National Wildlife Refuge and tax breaks as Congress crafts a broad new energy policy.

Immunity could relieve some pressure on gas prices, but at what cost?

Energy Re-Regulation Qualifies for Special Election

Voters will decide the future of California's energy markets when they go to the polls for a November 8, 2005 Special Election. It is one of eight measures on the ballot:

Electric Service Providers. Regulation. Initiative Statute. (Signatures submitted, but not yet qualified for ballot)

The initiative would reregulate California's electricity providers, putting them under the control of the state Public Utilities Commission. It would block customers from leaving utilities to buy power from other providers and would require all electric companies to provide 20 percent of their power from renewable resources by 2010, instead of the current 2017.

Its presence on the ballot could also have a chilling effect on investment in new energy infrastructure in the State.

LADWP Nuke Site Still Draws Fears in Malibu

Luckily, the Los Angeles Department of Water and Power never decided to build a nuclear generator in Malibu. Nonetheless, the property where it was planned remains a liability for ratepayers.

Call it fallout from Malibu's nuclear era.

Playwright Charles Marowitz is suffering from it, he says as he points into a ravine beneath his home of more than two decades.

It has nothing to do with the mysterious building hidden near the bottom of the mountain — where he says local legend has it that an eccentric billionaire once secretly tried to build an atom bomb.

Marowitz's problem involves the ill-fated atomic power plant the Los Angeles Department of Water and Power tried to construct four decades ago in rugged Corral Canyon.

The DWP reluctantly shelved plans for its nuclear station after experts argued that the isolated canyon three miles west of the Malibu Pier was geologically unstable and unsafe for an atomic reactor.

But the city retained ownership of part of the 305-acre nuclear site. And now a slow-moving landslide at the edge of the DWP parcel threatens to undermine multimillion-dollar ocean-view homes owned by Marowitz and his neighbors.

Know-nothing Governor cost Californians Billions

If you believe former Governor Gray Davis, it was ignorance, not malfeasance, which is to blame for the State's 2000-01 Energy Crisis:

Former Gov. Gray Davis now admits he was unprepared for the 2000-01 energy crisis that sent electricity bills soaring, brought rolling blackouts and ultimately helped bring an early end to his political career.

Davis, recalled by voters in an unprecedented move, was replaced by Gov. Arnold Schwarzenegger in October 2003, a year after Davis had won a second term.

The former Democratic governor said he erred by buying power at inflated rates during the height of the crisis, but said he acted because he "wasn't willing to risk" sustained blackouts.

"Did it turn out to be a mistake? Yes," Davis said during a speech Friday before the Commonwealth Club of California in San Francisco.

SoCal has opportunities to head of energy calamities

As with the 2000 Energy Crisis, there are warning signs that supplies will be tight in Southern California as demand grows. But we might be able to learn from our experience:

Indeed, Southern California has a golden opportunity to head off future calamities.

But we'd better not blow it.

Now is the time for expansion of capacity — and vision.

New power plants must be built and old ones renewed. Transmission lines must be built to bring power into the state from surpluses at the Arizona and Mexican borders and other states. New forms of power generation — solar and wind and geothermal — are becoming possible.

This region needs more electricity because its economy is growing, and so is its use of electric power — extraordinarily so.

In Southern California Edison's territory — Los Angeles and Orange counties plus San Bernardino and Riverside counties — electricity usage grew 4.5% last year and as much as 6% in the hotter inland areas. In San Diego Gas & Electric's territory, especially in the desert regions east of the port city, growth is 4% to 5% per year. These growth rates are expected to continue.

And don't forget the necessary infrastructure to import the fuel by which that electricity gets generated!

Desmond: U.S. needs 8 LNG Terminals

Of 54 proposed liquefied natural gas terminals in the United States, eight will be needed, according to California officials:

"Most people recognise that the market could not and would not support them all. The United States will probably see six to eight terminals in total," said Joe Desmond, chairman of the California Energy Commission.

Speaking at an oil and gas conference in the north Australian city of Darwin via video link, Desmond said he expected California, which imports around 85 percent of the natural gas it consumes, would need one to two.

Australian companies BHP Billiton Plc/Ltd. (ASX: BHP.ax) BLT.L, the world's biggest miner, and Woodside Petroleum Ltd. (ASX: WPL.ax) each have proposals for liquefied natural gas (LNG) terminals to be built offshore California where Desmond said 40 percent of the state's energy mix came from natural gas.

Australian Energy Minister Ian Macfarlane said knowing when California would be ready to accept gas from Australia was a "million dollar question". But the minister told the conference he expected BHP's proposed terminal at Cabrillo Port could be approved this year.

"The challenge is for them (Californians) to overcome concerns about the importation of LNG," Macfarlane said.

Califonia will need two of the four proposed projects along its coast.

Kennedy, Kerry, Feinstein want State Contol of LNG

Reacting to House efforts to put control over LNG permitting in the hands of the Federal Energy Regulatory Commission, Massachussetts and California's U.S. Senators are seeking a mandated State approval:

Sens. Edward M. Kennedy and John Kerry, both D-Mass., said it will be a tough fight, but they are gathering support for an amendment to the energy bill, which the Senate will begin debating next week.

Their amendment, co-sponsored by Sen. Dianne Feinstein, D-Calif., would require LNG developers to get state approval before they file an application with the Federal Energy Regulatory Commission. It would give states one year to act, and it would require that any current application being considered by FERC go back through the state approval process.

The senators' proposal runs counter to current language in the energy bill that gives FERC greater authority in LNG sitings.

Feinstein, California Gov. Arnold Schwarzenegger and other officials in coastal states where LNG terminals are pending oppose that language.

There should be some nuance in the proposal, however, as a distinction is missing on whether the bill prescribes a particular State approval process or simply that a proposal must go through a State approval process. In California, any number of State agencies could claim jurisdiction--from the State Lands Commission to the Coastal Commission to the PUC--and which has the appropriate authority is really determined by the nature of each proposal.

Nuclear proponents meet in San Diego

Advocates of nuclear energy met in San Diego this week to map out their game plan:

The discussion sounded more like a page out of a football coach's playbook. Surprise the opponent. Plan ahead. Coordinate. Be proactive, not reactive.

But "Engaging the Anti's: Communications with Environmental Groups" was a much more serious talk because it could help determine the future of nuclear power in California and the rest of the country.

The session was part of the American Nuclear Society's annual weeklong conference, which has drawn hundreds of scientists and industry professionals to San Diego from around the world.

Wind or Nuclear debate rages in Britain

Observers of efforts to construct a 1000-MW offshore wind farm in the United Kingdom are looking forward to a spirited debate:

...it'll be interesting to see if a savvy PR campaign, with lessons learned from similar projects happening around the world, can smooth the way for the approval of this project. I wonder if this will intersect with the continued push for new nuclear power plants in the UK - it's not hard to imagine windfarm opponents asking why a 152 mi2 offshore wind farm is necessary when you can get more and more reliable power from a single nuclear plant. I like wind power OK, but I feel that in the not-too-distant future, we'll look at these kinds of megafarms as kind of bizarre anomalies, an amusing reminder of the uncertainty that characterized our first efforts to solve the Global Energy Problem Thing.

I am waiting for opponents of LNG in California to suggest building nuclear power...then we'll know their credibility is shot.

[Link via NEI Nuclear notes]

Long Beach LNG Decision pushed to December

Having a stopped clock is better than a stopped project for proponents of a liquefied natural gas terminal in Long Beach, California. For now, their lease on life has been extended until September:

Three hours of heated debate and a razor-thin City Council vote Wednesday morning didn't change much about a proposal to build a liquefied natural gas terminal in the Port of Long Beach.

The 5-4 council decision to continue negotiating with the developer likely means that residents and public officials will have to wait until fall for a decision on whether the terminal will be built.

An environmental impact report on the terminal is due in early September, and is expected to provide the council and Long Beach Board of Harbor Commissioners with answers to long-running safety questions.

That will put them 18 months behind the Cabrillo Port--perhaps California's most advanced and well-designed LNG proposal--which began its EIR process in March 2004.

Energy Plan Sparks Sacramento Controversey

The Governor's plan to consolidate the State's Energy Agencies, once set in motion, will have sixty days to be debated by the Legislature. From the looks of it, those will be a long, hot two months:

As California’s electricity supply tightens with summer weather ahead, Governor Arnold Schwarzenegger will send a state-energy-agency reorganization plan to the Legislature next week that critics say favors big energy companies at public expense.

The administration maintains it is not out to compromise the public interest, but only to streamline the state’s complicated, multiagency energy bureaucracy and encourage construction of the new electric transmission lines and gas pipelines that energy firms say are needed to keep the lights on in California. “This reorganization improves accountability, focuses the development of energy policy, reduces fragmentation and duplication, and improves communications,” said Joe Desmond, chairman of the California Energy Commission.

But consumer advocates and some Democratic members of the Legislature charge that Schwarzenegger’s plan will concentrate power and limit consumer advocacy in determining whether utilities can pass on billions of dollars of project costs to California households and businesses. They also say the plan will do little to address the squeeze on California’s energy supply. “It’s really fiddling while Rome burns,” said state Senator Joe Dunn (D–Garden Grove).

Hundreds oppose Long Beach LNG plant

The fiercest opposition to the construction of a liquefied natural gas terminal exploded at the Long Beach City Council chambers last night, in a rancor of testimony and protest:

The project has provoked strenuous opposition among residents who fear that an accident or terrorist attack could cause a catastrophic fire. But others have argued vehemently that Long Beach needs the jobs the terminal would provide.

Two proposed California gas terminals have been canceled because of public criticism. If the council votes to terminate negotiations, it will seriously undermine the Long Beach project. Although the city's Harbor Commission holds the power to cancel the project, commissioners would have a difficult time forging ahead in the face of council opposition.

The council meeting attracted residents from across southern Los Angeles County.

Tom Miller, 40, came with his wife, Rebeca Shelley, 38. They are 10-year residents of Long Beach who own the Viento y Agua gallery and coffeehouse.

"We're frightened about the possibilities of liquefied natural gas coming to Long Beach — not only its presence but what could happen in a potential terrorist attack," Miller said. "I just don't trust big business anymore, and the way it works with local government."

The Long Beach City Council seems less than enthusiastic about the project--a decision which, as with the Coliseum and the NFL could whittle down the options to one.

Unocal in International Bidding Was

Don't print the ChevronTexacoUnocal just yet. The oil giant has some competition to its bid for horizontal marketplace expansion:

A Chinese oil company said Tuesday that it might try to top Chevron Corp.'s $16-billion proposed acquisition of Unocal Corp., raising the possibility of a bidding war for the El Segundo-based oil company.

The disclosure by CNOOC Ltd., a division of state-owned China National Offshore Oil Corp., marked the first time that the Chinese entity had confirmed its interest in the exploration and production company.

CNOOC reportedly had been among the companies that had mulled over a bid for Unocal this spring, before Unocal and San Ramon, Calif.-based Chevron reached their deal April 4. Chevron agreed to pay $62 a share in cash and stock for Unocal.

In a filing with the Securities and Exchange Commission, CNOOC said it was "continuing to examine its options with respect to Unocal," which might "include a possible offer."

Refuel-at-home CNG Unit Unveiled

Jalopnik has more information on Honda's Refuel-at-home module for compressed natural gas cars:

Buyers in California of Honda’s new, natural-gas powered Civic GX can choose to home-fuel their vehicles, with a device called (check the meter on your obviousity detector) “PHILL.” The Phill unit is a small, compact gas compressor that can deliver up to 3,600 pounds per square inch of natural gas. It costs about $3,500...

Energy Surcharges lead to Class Action Suit

Undisclosed Energy Surcharges--popular since the 2000-01 California crisis--have become the subject of a successful class action lawsuit between a California man and a Nevada Hotelier:

California residents may bring suit in their own state courts against Nevada casinos for false advertising and deceptive business practices.

That's according to the California Supreme Court, which issued the ruling today. Even though Nevada casinos might not have any properties in California, that state's courts have jurisdiction in such cases because Harrah's Entertainment advertises heavily in California.

...The decision stems from a 2002 class action suit filed by a Los Angeles area man against a group of Harrah's properties.

In 2001, Frank Snowney made a reservation at a Harrah's resort, which said the room would cost 50 dollars a night plus room tax. But when Snowney paid his bill it included a three dollar energy surcharge.

Snowney says Harrah's never disclosed the charge when he booked the room. In his complaint, Snowney accused Harrah's of deceptive business practices, breach of contract and unjust enrichment.

Could the airlines--who regularly tack on fuel surcharges between $10 and $60 each way--be next?!?

Ontario to Get Solar Generating Plant

Quick to act before the State legislature meddles in the rules for installing photovalic energy generation, Northern Power Systems has announced plans to build a 400kW solar generation facility in Ontario:

Northern Power Systems, a subsidiary of Distributed Energy Systems Corp, today announced that it has entered into an agreement to design, engineer and construct a 400 kW solar power system at Timberland's 429,000 square-foot Ontario distribution center in Southern California.

The 401.8 kW photovoltaic (PV) system will be installed on a new "TruckPort" steel mounting structure next to Timberland's warehouse, leveraging an unused area of the facility's truck yard by providing storage space for the facility as well as shaded parking for employees. A total of 1,960 PV modules will be mounted on the structure in strings of 14 each. The high-efficiency modules and inverters are expected to produce almost 60% of the facility's electrical load.

Long Beach at odds over LNG

The Los Angeles Times provides an extensive expose on Long Beach's struggles with Liquefied Natural Gas:

Long Beach must have seemed the perfect location for a liquefied natural gas terminal when Mitsubishi Corp. unfurled its plans more than two years ago for the $450-million project.

This is not a city that shies from the ugly realities of energy production. Oil pumps still bob in the Los Cerritos marshes, and those palm-dotted islands offshore are really poorly disguised oil derricks.

But despite this port city's reputation as pro-industry, the proposed LNG terminal has set off a furious debate over safety.

Under pressure from a coalition of LNG critics, the City Council will consider Tuesday whether to cut off talks with a Mitsubishi subsidiary, a move that could doom the terminal.

Mayor V. Speeds Up Energy-Saving Streetlights

Proving more effective in four weeks than his predecessor could be in four years, Mayor-elect Antonio Villaraigosa is looking to the private-sector to install energy-saving streetlights:

Bucking City Hall's past practices, Mayor-elect Antonio Villaraigosa wants a private contractor to install energy-conservation traffic and pedestrian-crossing lights at L.A.'s 4,300 intersections, and to do it in less than half the time city workers could.

Villaraigosa is pushing the proposal after getting the Transportation Committee he chairs in April to recommend Republic Electric of Novato -- which has performed similar work all over the country -- for the two-year, $22.3 million contract over in-house proposals taking up to five years.

The project to replace the current incandescent lamps with the more efficient ones, known as light-emitting diodes or LEDs, will save the Department of Water and Power millions of dollars in energy costs annually.

"The longer we delay this project, the more it will cost DWP ratepayers," Villaraigosa said in a written response to questions, noting Los Angeles County and many other cities converted their traffic lights years ago.

"Our traffic lights are energy guzzlers that cost too much and burn out too fast. LED lights will save ratepayers money and we need to make this conversion as quickly as possible."

The city's conversion efforts have been bungled from the start, four years ago.

Now if they could only synchronize them while they're at it, that's save even more energy!

Politics a main obstacle to helping environment

You'd think that if the Governor and the Democrats who controlled the Legislature agreed on aggressively reducing emission in California, something would get done. But you'd be wrong, as the Mercury News' Phil Yost explains:

Gov. Arnold Schwarzenegger's targets for greenhouse-gas reduction set off a contest of environmental one-upmanship that had me wondering whether by 2020 California would allow breathing only on alternate days, because exhaling adds carbon dioxide to the atmosphere.

It was all the more exasperating because here's an issue on which the governor and Democrats agree: Global warming is a big problem. They can make California a leader on the issue if they can set aside political rivalry.

...And the reaction from the Legislature's greenest Democrats? The governor's plan is all hot air.

After Schwarzenegger's plan leaked out last weekend, but before he made it official Wednesday, Democrats cobbled together a news conference to disparage the executive order as mere words. They say they were ready to lay down even more ambitious, and enforceable, regulations. But they weren't.

...This sort of politics-first drives people nuts. California is so far away from any of these goals, there's no meaningful difference between the governor and the Democrats.

Instead of debating the right target for 2015, how about just achieving a yearly reduction in emissions? That requires using less fossil fuel -- directly or to generate electricity -- in cars and trucks, in buildings and in appliances.

Let's hope this systemic problem in Sacramento can be fixed before we have another Energy Crisis...but I wouldn't count on it!

California Warming to Solar

As local leaders met in San Francisco over the weekend, it became evident California's love-affair with the sun goes beyond the beaches and in to electric generation:

One of the appealing features of solar-electric cells is their increasingly
affordable price. Bill Blackburn of the California Energy Commission's emerging
renewables program said the cost of photovoltaics has "dropped dramatically in
the last few decades ... and costs are expected to continue to fall long term."

Across California, solar enthusiasts are beginning what they hope will
become a sun-powered version of the Gold Rush.

In mid-April, for example, the Alameda County Board of Supervisors
dedicated 1.1 megawatts worth of new solar arrays they have recently installed
at facilities throughout the county -- which should bring the county $3.8
million in PG&E rebates under the utility's 4-year-old self-generation
incentive program.

Of course, the love affair with Solar is not nearly as strong as legislative Democrats' love affair with unions. They may have killed the Governor's plan to expand solar power to a million homes by inserting a poison pill into the legislation requiring that only union jobs can qualify to install the photovalic cells--undermining recent gains in cost savings.

EPA maintains fuel additive requirements

EPA Administrator Stephen L. Johnson has rejected a request from California and two other states to waive requirements for oxygenates in gasoline.

State officials and refinery executives say the ethanol added to California's gas supply pads costs at the pump and can worsen air pollution during the summer.

Officials say ethanol has its place in California as a pollution fighter, but the federal rule forces the state to use ethanol even when it isn't beneficial.

"We're disappointed," said spokesman Jerry Martin of the California Air Resources Board, which regulates fuel formulas.

"We have no problem with ethanol - we just don't think that the requirement works very well in a hot climate like California in the summertime."

The EPA, in congressional testimony in July, estimated that ethanol can add 4 cents to 8 cents to the price of a gallon of gas.

However, the ethanol and the adeed cost will remain as the EPA ruled that California failed to prove that the oxygenate requirement "prevents or interferes with the state's efforts to achieve clean air."

The Dark Days of Summer?

Federal Energy Regulatory Commission (FERC) officials are warning that Southern California's energy supply could be strained this summer, and even worse next year.

The southern half of the state "is the worst electricity supply situation in the entire country," Joseph Kelliher, a member of the Federal Energy Regulatory Commission, said at an electricity conference in San Francisco."

It's indisputable that there are problems, and some problems have remained for some time," he said.

FERC Chairman Patrick H. Wood III, reflecting on the chaotic blackout days of the California energy crisis in 2000 and 2001, expressed disappointment."I thought we would be further along after four years," he said. "It's a bit disheartening, quite frankly, to see we're looking at a potentially tight summer and maybe two."

Disheartening indeed.

Schwarzenegger to unveil global warming plan

Gov. Arnold Schwarzenegger is set to unveil emmissions goals at the United Nations World Environmental Day Conference in San Francisco. The goals, set forth in an executive order, call for reducing the state's emissions to 2000 levels by 2010, 1990 levels by 2020 and 80 percent below 1990 levels by 2050. The executive order also establishes a "Climate Action Team" responsible for meeting those goals.

The policy, seemingly at odds with the Bush administration's established posistion, is billed as a voluntary solution as opposed to a bill passed by the California Assembly earlier this week. The Assembly bill calls for a mandatory 7 percent reduction in greenhouse gas emissions by 2010.

Paying less at the pump

Memorial Day drivers welcomed a drop in gas prices for the seventh straight week as average gas prices across the state fell to $2.39/ gallon.

Despite the decline, Californians continue to pay 30 cents more per gallon than the national average of $2.09. Stricter environmental standards, more imported fuel, and higher taxes continue to maintain a price gap that reached as high as 39 cents from the national average during this Spring's price run-up.

Despite stalls, hybrids remain highly rated

Apparently hybrid owners remain satisfied with more flower, even when there is no power.

Despite a National Highway Safety Administration investivation into reports of 2004-2005 Toyota Prius vehicles stalling at freeway speeds, consumers continue to rate the hybrid among the most relaible in the automotive industry.

The Los Angeles Times reports that the complex hybrid continues to enjoy a loyal following and limited downtime, rating among the top compact cars by J.D Power & Associates three of the past five years.