Californians prefer gas over food

Not exactly surprising, but the latest Field Poll reinforces an image of Californians:

A new Field Poll shows that 70% of Californians consider fuel prices a serious problem, with 40% admitting that they’ve cut back on expenditures such as dining to keep their cars on the road, a figure that rises to 54% in the under-40k-a-year set.

LNG creates Jobs

In a perhaps-ill-timed article about the economic impacts of liquefied natural gas, the Ventura County Star examines LNG's benefits along the Gulf of Mexico.

The LNG rush headed for Ventura County in the form of two proposed offshore stations is nothing compared to the stampede elsewhere. Five import stations currently take natural gas from places such as Trinidad and Algeria and pipe it into the U.S. Four times that many are proposed in the Gulf of Mexico and the land bordering it. Seven more proposals cluster the Atlantic coast beginning north of Boston.

It's as if someone struck gold and everyone wants a piece.

Poison pill in Solar Bill makes Governor back away

Democrats in Sacramento have proven they care more about labor unions than the environment, and Governor Arnold Schwarzenegger is showing that he ain't gonna take it.

"Senate Bill 1 abruptly lost its bipartisan support when union-sponsored amendments were added that would drive up the costs of solar installations," said Schwarzenegger spokeswoman Margita Thompson. "The governor does not support the recent amendments and considers the bill unacceptable in its current form."

SB 1 could provide more than $2 billion toward solar-panel installations in California on a million residential, commercial and industrial buildings by 2019. Schwarzenegger made the bill a cornerstone of his legislative package in an attempt to appeal to environmentalists, and it has been one of the few high-profile proposals in a lackluster legislative session.

Boasting of bipartisan cooperation, Schwarzenegger met last Wednesday with Republican and Democratic legislative leaders to discuss his top priorities.

But one day later, Assembly Democrats added amendments to Schwarzenegger's solar plan that would require workers to receive a union-based wage on commercial and industrial solar installations. The bill also requires future solar installers to have an electrician's license and imposes penalties on uncertified electrical workers.

Republicans, including Sen. John Campbell, R-Irvine, an original co-author who had his name removed last week, contend that the change will drive up installation costs as much as 30 percent. They say the change makes solar uneconomical - a program some critics have suggested is already more cost-prohibitive than conservation and other forms of alternative energy.

Ray of hope for Californians post-Katrina?

As the damage from Hurricane Katrina mounts, the price of oil continues to rise.

Reports of damaged and missing oil rigs in Hurricane Katrina's wake pushed energy prices to record heights Tuesday, while analysts warned that refinery closures along the flooded Gulf Coast could soon drive gasoline costs above $3 per gallon nationwide.

As oil companies began sending survey teams to their battered offshore platforms, crude oil future contracts for October delivery jumped $2.61 to close at $69.81. Wholesale gasoline futures soared 41 cents per gallon, hitting $2.48.

News trickling out of the gulf gave reason for both optimism and despair. Some facilities -- including a massive offshore oil port -- avoided catastrophic damage. Others may have been wrecked

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Californians, however, may be spared by what is normally the biggest enemy of gas prices in our state--California refineries' special blends. The gas used in California is used only in California and is produced by refineries in the Golden State. This could spare consumers here the price shocks that will be felt in the Gulf States resulting from refining capacity going off-line in the Hurricane's wake--could.

Fear and Loathing in Ventura

Today, the Ventura County Star tries to put the fear of...trial attorneys...into its readers over the prospects of LNG.

Tim Riley is a marked man.

Operators of a liquefied natural gas plant in Everett, Mass., not only know of the Oxnard lawyer leading the charge against LNG but have watched his video that shows a plane flying into a tanker in a manipulated image of terrorism.

Industry representatives in Loui-siana, Texas, California and anywhere else there's LNG know he argues that a vapor fire could extend at least 30 miles and, in areas like Ventura County, could kill 70,000 people.

But maybe it didn't have to...people have already bought into their lies.

Al De La Cerda sits in an open garage after work, tipping a can of Bud Light and mulling over nightmares: earthquakes, terrorism and ruptured pipelines.

The natural gas that fuels his anxiety would come ashore about 2.5 miles from his four-bedroom home at the edge of a strawberry field. The pipeline would likely follow Hueneme Road, a half-mile from this South Oxnard neighborhood of working-class homeowners...

"We're the ones," he said, "who would die first."

Were I Al, I'd be more worried about what those around me were doing after having a Bud Light than the risks of LNG--one is much more destructive, especially if involves a Sara Lee delivery truck.

Hurricane Katrina floods energy markets with worry

Katrina has done more than devistate New Orleans--she has also put energy markets in a precarious position.

Oil prices spiked Monday as Hurricane Katrina tore through a stretch of Gulf Coast thick with pipelines and refineries, raising fears that already elevated gasoline costs could shoot higher.

For the first time, the price of crude briefly topped $70 per barrel in electronic trading before the market opened as the storm raced through one of the country's most important oil patches. The price tumbled later in the day, closing at $67.20, on news that President Bush would consider dipping into the nation's emergency oil reserve to prevent shortages.

By the time Katrina made landfall early Monday, the storm already had knocked 3 million barrels of oil off the market as companies such as San Ramon's Chevron Corp. evacuated their offshore platforms. Two drilling rigs used by Royal Dutch/Shell Group were drifting on the open sea Monday, while the fate of others remained unknown.

The hurricane represented the kind of sudden cut in oil production -- a "supply shock" -- that analysts had feared, hitting at a time when global demand for crude has strained the limits of available stocks. About 92 percent of the gulf's oil production shut down in advance of the storm, according to government figures.

State slapped down on energy claim

Despite a string of victories on recovering energy costs, the State of California finally lost one claim:

A judge has dismissed a lawsuit by California officials accusing Canadian electricity generator Powerex Corp. of $850 million in price gouging during the 2000-01 energy crisis.

In a rare defeat for California officials in their quest for billions in refunds, U.S. District Judge Garland E. Burrell Jr. of Sacramento said the state's claim should be taken to the Federal Energy Regulatory Commission.

"FERC has exclusive jurisdiction to determine 'just and reasonable' wholesale energy rates," Burrell wrote in his decision.

Powerex spokeswoman Elish Moreno said FERC has already ruled that her company's charges were fair.

Energy situation at critical juncture

Solving California's energy woes has been a case of two steps forward, one step back, as Patrick Dorinson explains in Capitol Weekly:

It has now been 5 years since California was in the throes of the 2000-01 energy crisis, and we don’t seem any closer to a comprehensive plan for securing our energy future. In fact, we are at a crossroads that could determine whether we take a step back into a failed past or take a step forward into an undetermined future. Make no mistake, California is riding the edge of the supply-demand curve once again and without bold action, the situation will only get worse in the next few years.

The step back is illustrated by the appearance on the November special election ballot of Proposition 80, sponsored by The Utility Reform Network (TURN). TURN’s initiative would effectively end California’s eight-year attempt to change the way electricity is bought sold and delivered to the customer. It would return us to the "good old days" of cost-of-service based system. It has something for everyone, including a provision accelerating the state’s 20 percent renewable requirement from 2017 to 2010. It would also end the direct access idea that has allowed large industrial and commercial consumers, including the University of California system, to shop for power. It would probably be the end of independent generators investing in new power plant construction.

Talk to anyone in the industry familiar with financing power plant construction and they will tell you that Prop 80 would chill future power plant investment in California by the merchant generators, and possibly force them to abandon California altogether.

Energy problems can be solved, however, as suggested by a recent meeting held under the auspices of California Energy Commission Chairman Joe Desmond. The utilities, the generators and the large customers attended, and while there was no real consensus, it was the first time that otherwise warring factions sat down to try to hammer out a solution that will advance the evolution of a workable energy market.

We have so far dodged the blackout bullet this summer, but we’re heading into next summer with the same level of uncertainty that has greeted every summer since 2000. How do we get ourselves out of this vicious cycle and develop a system that can lower prices, provide reliable electricity, encourage new investment and innovation, and someday put choice in the hands of the consumer where it belongs?

Hyperbole marks debate over LNG

The Ventura County Star gives a surprisingly balanced look at the debate over importing natural gas:

Ventura County residents face a choice between freezing in the dark and dying in a fireball.

Or so you might conclude from the arguments framing the fight over liquefied natural gas imports into Southern California. For nearly a year, since Ventura County was swept up by the nationwide resurgence of interest in LNG, the debate has bounced like a pinball between scenarios of crisis and catastrophe.

Proponents of LNG imports, such as energy companies and business groups, warn that California's economy will be crippled unless the state taps new gas supplies. Opponents counter that LNG tankers and terminals, handling flammable natural gas that is shipped as a super-cooled liquid, would unnecessarily expose coastal residents to mortal danger.

Both arguments contain elements of truth, but the debate over LNG is about much more than public safety and energy resources, and it reaches well beyond the borders of Ventura County.

The fight over LNG will decide the fate of billions of dollars in investment by energy companies. The debate raises questions about the reliability of the nation's fossil-fuel resources and how best to regulate them.

Americans not alone feeling oil pinch

As Hurricane Katrina drives up the price of oil, Americans are not alone in feeling the economic impacts of high oil prices.

Skyrocketing oil prices are "a heavy tax on most Asian economies," said William Overholt, director of Rand Corp.'s Center for Asia Pacific Policy.

Oil has doubled in price since the start of the year, ending last week at $66.13 a barrel. That's worrisome news for Asia Pacific economies, which rely on imports for 67% of their oil needs. Not only do they face unexpectedly high oil bills, but they fear that high energy costs, coupled with rising interest rates, will spook consumers in one of their largest export markets, the U.S.

As U.S. companies trim their energy consumption and consumers pare their spending, the slowdown is already being felt across the Pacific.

"Some of these countries are facing some real issues," said Kenneth Courtis, vice chairman of Goldman Sachs Inc. "Their trade numbers are going bad, inflation rates are moving up and people are grumbling" because governments are being forced to let energy prices rise.

The World Bank predicts that the global economy will slow to about 3% this year from 4% in 2004, but the effect on individual countries will vary widely.

SDG&E wind farm comes blowing into mountain pass

The desert outside San Diego is about to get a new bit of scenery.

With sky-high cranes and delicate calibrating tools, contractors are assembling the giant rotors on what will be the largest capacity wind turbines in the nation.

The 25 turbines will be erected in coming weeks on the Tecate Divide, just north of the Golden Acorn Casino. This remote East County reservation will become home to the first large-scale commercial wind farm on Indian lands in the United States.

The tribe will collect fees on a 20-year lease, plus royalties from electricity sales to San Diego Gas & Electric.

Diesel comback in Cali? Some can dream

Although it is more fuel efficient than other options to power your automobile, only dreamers can forsee a future where Diesel returns to California motorists.

Robert DesRoches has fond memories of his diesel-powered 1984 Mitsubishi Mighty Max pickup. It required minimal maintenance and gave him 22 miles to the gallon, whether hauling groceries from the supermarket or towing his sailboat.

So when President Bush signed an energy bill this month that gives diesel car buyers a tax credit of up to $3,400, DesRoches was all for it. The 43-year-old computer networking specialist would love to buy a new diesel car or sport utility vehicle.

But because he lives in California, the tax break won't do him much good. Thanks to state emission regulations that are tougher than federal standards, sales of new diesel passenger cars and SUVs have essentially been barred here since 2003.

Thank you, Governor Gray Davis!

Dan Walters on Energy Politics

Dan Walters breaks down the State's conundrum when trying to devise a sensible energy policy:

The state, however, lacks a coherent energy policy, largely because of the proliferation of governmental and political players who often work at cross-purposes without anyone being held accountable.

If that sounds familiar, it's because the same malady - checks-and-balances-run-amok - afflicts other issues as well, such as water, education, transportation and housing. The multiplicity of official policy-makers and unofficial "stakeholders" is a recipe for gridlock; everyone has a veto power and the policies that emerge, when they do, are often unworkable.

Read the whole thing!

Power line snafu knocks out electricity to scores in SoCal

Southern California Edison customers had a flashback yesterday as rolling blackouts his Southern California.

In one of the most severe electricity problems since the energy crisis, blackouts hit Southern California on Thursday after a major transmission line was knocked out, cutting power to roughly 700,000 homes.

Gov. Arnold Schwarzenegger, in a hastily arranged visit to the state's power grid operations center here, sought to assure residents that the transmission problem was an isolated glitch and that the state has enough power to get it through the summer.

"Something that could have been a crisis was avoided,'' he said. "... This was one of those unforeseen incidents.''

Some Democrats, however, quickly accused the governor of breaking his promise to keep the lights on and not doing enough to fix transmission problems or build new power plants.

Of course, it would have helped if those same Senate Democrats had passed the Governor's proposals which would have fixed those problems...

Assembly approves solar home initiative with poison pills

The sky isn't falling on plans to put a million solar panels on California homes.

The centerpiece of Gov. Arnold Schwarzenegger's ambitious green energy program passed a key legislative committee Thursday, after taking 10 amendments to overcome opposition from various interest groups.

The bill's passage out of the Assembly appropriations committee means it will be voted on by the full lower house before the end of the legislative session in two weeks. The measure won easy approval in the state Senate earlier this year but encountered opposition in the Assembly from unions, business representatives, home builders, utility companies and consumer groups.

A key question now will be whether Schwarzenegger will still support the measure with the changes, which include a union-backed provision requiring contractors to pay prevailing wages to workers on nonresidential developments.

Lawmakers reject Governor's reorganization plan

State Legislators have blocked Governor Schwarzenegger's efforts to streamline the State's energy bureaucracy.

The state Senate rejected Gov. Arnold Schwarzenegger's plan to reorganize California's energy agencies yesterday.

On a 26-12 vote, lawmakers opposed the governor's plan to consolidate four state agencies under a new Cabinet-level secretary of energy. Schwarzenegger said the plan would centralize decision-making and improve accountability. Democrats in the Senate said it violated the state constitution.

Refinery breakdowns mean higher prices

If you recall the winter of 2000-01 and how just as electricity prices peaked, the generation California needed started to break down, your eyebrows will raise when you hear about what's happening with oil refineries in the State:

Just when it appeared gasoline prices had peaked, California drivers got a double dose of bad news Thursday with reports of breakdowns at two refineries that could tighten supplies and send the price of a gallon of regular roaring past the $3 a gallon mark.

After hitting a record high of $2.805 on Monday, prices inched down slightly more than a cent, to $2.794, by Thursday, according to the Automobile Club of Southern California. This led to ever-so-brief optimism that the summer run-up had run its course, only to be dashed by news of a fire at Tesoro Corp.'s Martinez refinery. There also were reports that Shell Oil unexpectedly shut down machinery at its facility in Martinez as well, although the company would not confirm the information.

After the news, the state's rumor-roiled spot market shot up 13 cents in one day, leading Oil Price Information Service West Coast market editor Denton Cinquegrana to predict a quick hike at the pump.

Hawaii considers gasoline price controls

In a move that may be a case study for future congressional action on high gas prices, Hawaii is moving to cap what customers are charged at the pump.

The state's drivers spend an average of $2.84 for a gallon of regular -- less in the big cities, far more on outlying islands. California might seem to be setting a price record almost every day, but the state's average is still 4 cents lower than Hawaii's.

Tired of those chronically high costs, Hawaii will begin limiting the wholesale price of gasoline next week, the first such effort in the United States. The price cap won't cover retail sales, so gas station owners will still be able to charge drivers whatever they like. But wholesalers will see their prices set by the state.

The price caps would not force wholesalers and refiners to sell below market costs but seek to prevent gouging -- which many Hawaiians blame for their prices.

With the caps due to take effect Sept. 1, no one quite knows what to expect.

Here's one possibility if you know supply and demand: shortages.

Gas Prices spark fear of Backlash

The natives--and the press which writes stories each day about high gas prices--are restless, and the Republican Party is concerned it might haunt them at the ballot box.

When Rep. Shelley Moore Capito (R-W.Va.) toured a Veterans Affairs clinic Wednesday, the first question put to her was: "What are you going to do about the high price of gasoline?"

And a growing number of GOP officials worry that, as the party in power, Republicans will pay their own high price — at the ballot box. They are scrambling to find ways to respond.

"People are mad as hell," Sen. Lindsey Graham (R-S.C.) said.

Oil prices, which hit an all-time high Wednesday, and gasoline prices are expected to be top items on the agenda when Congress returns from its monthlong recess after Labor Day.

As one of its first orders of business, the Senate will hold a hearing to examine the causes of the price increases, and oil executives might be summoned to testify.

"You can safely predict, with more accuracy than any TV weatherman, that the first blizzard of the year will be the blizzard of gas price legislation introduced this September when Congress comes back to town," said Stuart Roy, a former House GOP leadership aide.

Utility customers may be saying "Charge! Charge! Charge!"

California utilities are lobbying to be able to accept credit cards as payment for your utility bills.

Southern California Edison and other utilities want ratepayers to be allowed to use their credit cards to pay their electrical, gas or water bills, opening up a potential $25 billion in frequent-flier miles (that's 500,000 frequent-flier tickets to Europe). But legislation to allow it – to be voted on by the full state Senate today – has hit fierce, last-minute opposition from credit card companies.

The issue is who should pay for the convenience of using the credit card: only the ratepayers who use credit cards, all ratepayers – whether they use the option or not,or the utilities, which can't easily pass the cost to all ratepayers.

AB746 would allow utilities to pass along part of the transactional surcharge (which averages 2 percent) to people who want to use their credit cards to pay their bills.

"When people are trying to rack up frequent-flier miles, we don't want to ask those who are low-income and paying cash to help other people pay for their trips," said Assemblyman Sam Blakeslee, R-San Luis Obispo, author of AB746.

Credit card companies oppose the bill because they fear the surcharge could steer business away from them.Card companies also fear that this legislation would open the door for other utilities, such as phone companies, to demand similar rights.

Long Beach Delays LNG decision...again

Time keeps on slipping into the future for a proposal for an onshore liqquefied natural gas terminal in Long Beach, California.

For the second time in two months, the City Council shied away from taking a position on a proposed liquefied natural gas terminal in the Port of Long Beach until an upcoming environmental review is completed.

And again, the vote was split 5-4 following emotional debate about the potential risks or benefits of the terminal proposed by Sound Energy Solutions, a Mitsubishi and ConocoPhillips subsidiary.

"I want to get my information from policy experts," said Councilman Patrick O'Donnell, who joined Jackie Kell, Laura Richardson, Tonia Reyes Uranga and Val Lerch in thwarting a move to oppose the project. "It's that simple. I'm waiting for it."

Feds Propose new Auto standards

The Federal Government wants your SUV to get better gas mileage.

The Bush administration has announced new rules that will increase slightly the fuel economy standards for minivans, pickup trucks and sport utility vehicles starting in 2008, but critics say the regulations are riddled with loopholes that will encourage automakers to keep building large gas- guzzling vehicles.

The new rules -- the first major rewrite of the Corporate Average Fuel Economy or CAFE standards since they were created in the 1970s -- will replace the current requirement that automakers meet a single average mileage standard for their entire fleet of light trucks with a new system that divides vehicles into six classes based on their size.

For example, a small SUV such as the Honda CRV will be required to get 28. 4 miles per gallon, but a large pickup such as a Dodge Ram will have to get only 21.3 miles per gallon.

Irvine Hopes on Hydrogen Highway

Irvine officials are testing out the future of alternative-fuel vehicles.

Toyota is offering the use of one of its vehicles to Irvine to gauge public support for hydrogen-fueled cars, and city officials agreed to drive the prototype around town to show their support for alternative-fuel vehicles, they said. Production of such a vehicle is at least 10 years away.

Krom said the city's commitment to a clean environment and the university's hydrogen fueling station helped make the pilot program a "good fit."

About 100 fuel-cell vehicles are being tested across the state, according to the California Fuel Cell Partnership. They will be served by 16 hydrogen fueling stations, including the one at UC Irvine. The other 15 stations are expected to open by 2007.

Schwarzenegger Solar Plan Questioned

The Sacramento Bee raises questions about spending on solar power like drunken sailors:

According to an estimate by Severin Borenstein, director of the University of California Energy Institute, energy produced by existing solar systems - photovoltaic (PV) units, generally mounted on roofs, and inverters to transform the direct current they generate to alternating current - will cost at least three times as much as ordinary power.

Calculations by legislative staffers indicate that - for the homeowner or business installing the solar systems the program would subsidize - the deal will probably be a wash over the long haul.

ONshore LNG terminal causes traffic nightmare

Long Beach officials considering plans to build an LNG terminal in their port might be advised to look to Rhode Island's latest findings on the matter.

Giant tankers carrying liquefied natural gas through Narragansett Bay could cause traffic backups, hurt tourism and marine economies and slow emergency response times, according to two studies released Tuesday.

The studies focus on how the economy and traffic would be affected by LNG tankers heading to the planned Weaver's Cove Energy terminal in Fall River, Mass., which has been approved by the Federal Energy Regulatory Commission.

The studies were conducted by two independent companies for the Aquidneck Island Planning Commission, a regional group comprised of the cities of Middletown, Newport and Portsmouth. The commission has not taken a position on the LNG proposal, although the communities have each joined a legal fight against it.

Newport Harbor would be blocked for at least 20 minutes each time a tanker passes because of the wide security zone required around the ships, according to the economic impact report by Lincoln-based Pare Engineering Corp. Weaver's Cove has said it initially plans 50 to 70 tanker voyages per year.

That would restrict use of the bay several times a week during the boating season, and could result in the loss of major regattas and the Tall Ships festival. It could also damage the city's reputation as a tourist destination - one of the region's largest industries.

Jamestown Harbor would also be affected, as would the narrow waterway spanned by the Mount Hope Bridge further north.

Also, the tankers could conflict with testing at the Naval Undersea Warfare Center in Newport, where the U.S. Navy tests torpedoes and sonar. The Navy asked FERC earlier this month to reconsider its approval of the Weaver's Cove project.

Of couese, offshore facilities have no such problems...no wonder the Governor favors them!

Everyone paying for higher gas prices

You're paying for higher gas at the pump--but the costs are being passed along elsewhere, too!

The Los Angeles County Metropolitan Transportation Authority estimates that rising fuel costs will add at least $6.4 million to the agency's bus budget this fiscal year. "At this point, we have no plans to raise fares," said MTA spokesman Marc Littman. "We'll seek funds from other areas in the budget. But it's worrisome if it continues."

The cost of catching a cab has already jumped in Orange and Riverside counties, and fares are expected to rise soon in Los Angeles and Ventura counties as well.

The Los Angeles Board of Taxicab Commissioners has asked the City Council to approve a 10% fare hike. The proposal includes a 50-cent surcharge that would kick in when the monthly average price of gas reaches $2.73 a gallon. A $1 surcharge could be added if the price of gas hits $3.28 a gallon.

And watch out...now government wants to make you pay, too! No surprises there, eh?

LNG Battle in Long Beach becoming EXPLOSIVE!

Decisionmakers in Long Beach have alot to weigh as they head towards a Tuesday vote on whether to support or oppose an LNG terminal just yards from their Downtown.

After months debating issues peripheral to a proposed liquefied natural gas terminal in the Port of Long Beach, the City Council will consider a request Tuesday to oppose the project itself.

But the sides are gearing up for a battle that may only be inflamed by a city report released late Friday detailing the project's potential terrorist and safety threats.

The report that City Hall sent to the California Energy Commission described the potential for "massive damage' downtown and in neighborhoods if an incident occurs at the proposed LNG site. It also detailed an alarming range of potential terrorist threats including hijacked LNG vessels, a small boat attack, a small aircraft attack and underwater diver or mine attacks.

And you wonder why Arnold Schwarzenegger prefers an off-shore alternative?!?

Energy reserves in dispute

If the Saudis are right, there may some day be relief to high oil prices.

Some experts say that the Earth's oil reserves are smaller than we think. For example, Saudi Arabia, the global economy's gas tank, might not have the vast petroleum reserves its leaders claim, according to a new book rattling the energy industry. Royal Dutch/ Shell Group last year admitted overstating its oil reserves by about 25 percent.

Others maintain that crude is more plentiful than we suspect.

Federal rules force U.S. oil companies to underestimate the size of their reserves, a prominent energy research firm argued this spring in a widely circulated report. They can pump far more than their official estimates suggest

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Of course that won't do much to reduce our dependence on foreign oil, either, eh?

DMV deluged with Hybrid permit requests

Californians are going gaga over the chance to drive hybrid cars in the fast lane.

California hybrid car owners, already leveraging super-efficient gas mileage during a time of $3-a-gallon unleaded, are flooding the state with more than 1,000 requests a day for permits that will allow them to zip into carpool lanes even if they drive solo.

More than 12,000 people have applied for the special permits since they became available Aug. 10, said Bill Branch, a spokesman for the Department of Motor Vehicles. So far, about 1,500 stickers have been sent out.

If the goal was to incentivize people to buy hybrids, wouldn't it have made more sense to only give permits to hybrids purchased after the law went into effect?

Comedians make hay outt of high gas prices

At least someone can find some humor in the soaring cost of a gallon of gas!

Gasoline prices have gotten so high, crooks are knocking over service stations and demanding "your unleaded or your life."

There's a barrel of dark humor in three-buck-a-gallon gas and $50 fill-ups, so comics across the nation have seized on the topic people can't stop talking about. With politicians on summer recess and no high-profile celebrities on trial, the gallows humor of gas prices has become a staple of comedy routines.

"The Daily Show" mocks drivers by sending out correspondents in a stretch Hummer. Late-night monologues abound with wisecracks on the price of crude. And everyone seems to know some variation of the guy whose wife wanted an expensive night on the town, so he took her to the local gas station.

"Because of these high prices, I've actually changed to an electric toothbrush," quipped Tom Stern, a Woodland Hills comedian and comic strip artist. "There are other ways to save gas, you know - I'm always pretending to break down, just so people will tow me places.

"And if anyone's hitchhiking, you'd better stick a thumb out with one hand and a gas can in the other. You'll get a lot more rides that way."

I never said it was *good* humor...

Cabrillo Port "Profiled" in Palisades

The Palisades Post presents a mostly-biased look at the proposed LNG terminal off Oxnard's coast.

BHP Billiton, the world's largest mining company, wants to anchor its "Cabrillo Port" floating terminal an estimated 35 miles due west of the Santa Monica Pier. The company says it can provide the West Coast with vital supplies of clean-burning natural gas, which can be used to generate electricity, power buses and trucks and reduce air pollution.

Opponents have zeroed in on the possibilities of terrorist attack or other failures that would cause massive fireballs and disrupt the state's economy. In addition, federal and state agencies have raised questions about ship collisions, pipelines that cross three active earthquake faults, and tons of smog-producing chemicals that would be introduced into the air by LNG processing.

The BHPB plan is part of a continent-wide race by energy companies to be the West Coast's portal to the lucrative worldwide LNG trade. Potential profits are huge, but industry observers have said they doubt that the market will support more than 10 of the more than 40 LNG terminals proposed for North America.

Never do they look to the core issue in Pacific Palisades--that the LA Department of Water and Power has declared volatility in natural gas prices to be their greatest organizational threat. LNG would solve that...and a true "investigative reporter" would find that much out!

IOUs will help State conserve energy

California's Investor-Owned Utilities are lending a helping hand to the State government as it seeks to conserve electricity.

Under the deal, programs administered by Pacific Gas & Electric Co. and Southern California Edison will pay for engineering studies of the Elihu Harris Building in Oakland, the Edmund G. Brown Building in San Francisco and the Santa Ana State Office Building. In response, the Department of General Services agrees to spend up to $20,000 per building to implement the engineers' energy-saving recommendations.

"As our buildings get older, building systems don't work as efficiently as they once did," California Environmental Protection Agency Secretary Alan Lloyd, chair of the team's Green Buildings Committee, said in a statement. "Retro-commissioning is a way to get those systems running like new again.

That not only conserves energy, it helps save tax dollars."

Global cooling won't help energy shortages

Climate change for the better won't do much to ease energy woes:

After a summer of soaring gasoline costs, people should not expect cooler weather in autumn to end their energy woes. Prices at the gas pump probably will stay high and record heating bills in the winter are almost certain to follow.

The Energy Department predicts that heating costs for homes using natural gas or fuel oil could be 16 percent to 25 percent higher than last year. That estimate came before the latest price spike in crude oil and natural gas.

Already, drivers are reeling from gasoline prices that are approaching $3 a gallon in some areas and averaging $2.55 a gallon nationwide. Prices are expected to ease after Labor Day, but not by much, analysts predict, as crude oil prices remain above $60 a barrel.

Utilities are warning customers that their bills will be high this winter, says Chris McGill of the American Gas Association, which represents the natural gas retailers.

Wholesale prices for natural gas have soared along with crude oil and gasoline.

The Energy Information Administration estimates that natural gas could cost more than $10 per thousand cubic feet by January, about 30 percent more it did this summer.

Only building critical energy infrastructure seems to be the solution!

Oil prices down 5%

Oil prices dropped almost 5% yesterday, although no relief is in sight at the pumps for California motorists.

Crude oil prices fell nearly $3 a barrel Wednesday as new inventory and demand data eased concerns about summertime fuel supplies and traders pocketed profits from the oil market's dramatic run-up in recent weeks.

The September futures contract for light sweet crude, the U.S. benchmark, sank $2.83, or 4.3%, to $63.25 a barrel on the New York Mercantile Exchange. The retreat was the largest one-day drop since April and marked the third day in a row of lower prices after crude hit a record high of $66.86 on Friday.

Futures for regular gasoline, an indicator of retail pricing to come, also dropped sharply Wednesday. The cost of a gallon of regular gasoline jumped to an all-time high of $2.03 in early trading, but fell back to close at $1.89, down 9 cents.

Long Beach struggles with LNG decision

The City of Long Beach is struggling with plans to open a liquefied natural gas terminal in its port.

A proposed liquefied natural gas terminal in the Port of Long Beach provoked a messy debate Tuesday among the City Council, which considered but stopped short of taking a formal position on the project after the city attorney warned against any such vote.

The debate was sparked by an agenda item that asked the council to request the Harbor Commission make public safety the "overriding consideration" of the project. The Harbor Commission will have final say over the proposal.

The council voted unanimously to make that request to the commission, although the discussion took numerous turns to get there.

The debate ignited a testy exchange on the merits of the terminal itself, with Councilman Frank Colonna at one point proposing that the council take an immediate position on the project. Colonna withdrew the request after City Attorney Bob Shannon warned that there had been no public notice for such a vote and cautioned that the council would "look pretty silly" if it proceeded.

After the meeting, however, an aide to Colonna said the councilman will seek a formal council vote on the project at the council's Aug. 23 meeting.

No worries, though, the Federal Energy Regulatory Commission will make their minds up for them!

Sempra venture diverts natural gas from California

Sempra, the parent company of SoCal Gas and SDG&E, will build a pipeline to take natural gas from the Western U.S. to the Midwest:

Kinder Morgan Energy Partners, L.P. and Sempra Pipelines & Storage, a unit of Sempra Energy , today announced that the two companies have entered into a Memorandum of Understanding (MOU) to pursue development of a proposed new natural gas pipeline that would link producing areas in the Rocky Mountain region to the upper Midwest and Eastern United States. As designed, the 42-inch diameter pipeline would have capacity of up to 2 billion cubic feet per day and is estimated to cost $3 billion. The preliminary route of the 1,500-mile pipeline would originate at the Wamsutter Hub in Wyoming and extend to eastern Ohio with an ultimate route to be selected based on shipper interest.

Normally, that gas could be coming to California--but since Sempra is already building an LNG terminal in Mexico for our markets, this move stands to drive up California prices making their LNG importation more inline with market rates.

Mileage Myths costing drivers

As gas prices rise, people seeking to improve their milage with old wives' tales are often making matters worse:

In the quest to squeeze as much mileage out of their gas budgets as possible, motorists are exploring all the angles, gleaned from friends, family and even the Internet. Some work; others are urban myths.

Turning off the air conditioning and opening the windows, for example, actually lessens fuel economy because air going through the windows adds drag to the car.

Myung is not alone in thinking gas prices go up on weekends, but experts say he's wrong.

"That's a bit of an old wives' tale, a myth," said Tom Kloza, chief oil analyst for the Oil Price Information Service. "Wholesale prices change every day, with the exception of Sunday. The biggest price moves tend to take place on the wholesale markets on Wednesdays these days."

But there does appear to be truth to the theory that stations near freeways charge more.

"There's substantial premiums you pay if you buy gas near a freeway," said Michael Shames, executive director of the Utility Consumers' Action Network, a San Diego group that has tracked regional gasoline prices. "It's simply a function of gas stations' taking advantage of the convenience factor. They may also pay higher rents, though."

How about driving behind a big rig? That also can improve fuel economy.

"It's the same theory that Lance Armstrong exploits whenever he's riding in the Tour de France," Shames said. "He's taking advantage of the draft created by other riders to reduce the amount of effort he has to make."

However, experts don't recommend the technique for motorists because of the dangers of being in the trucker's blind spot.

Gas Prices Fuel Inflation Concers

The consumer price index jumped a whopping 0.5% last month, egged on my higher energy prices.

Meanwhile, the Labor Department reported that its closely watched Consumer Price Index rose 0.5 percent in July, the biggest increase in three months. In July, overall inflation was driven higher by a big 3.8 percent jump in energy costs.

However, outside of food and energy, prices remained well behaved. The core inflation rate edged up by just 0.1 in July. This price category, which is closely watched by the Federal Reserve, was helped in July by a 1 percent drop in new car prices, the biggest one-month decline in more than 30 years.

Silicon Valley's Tower of Power

It may sound like the name of an Orange County Megachurch, but the Tower of Power is a revolutionary idea by NASA to make good use of an existing structure.

NASA has a revolutionary vision for Hangar One, the toxics-coated hulk that once housed a dirigible at Mountain View's Moffett Field: Wrap the 200-foot-high landmark with a solar-paneled skin that pumps out electricity.

The Silicon Valley icon could become the largest solar-powered building in the state by the end of next year, generating enough juice to power 3,000 homes and house a new aerospace museum. That is, if the U.S. Navy -- charged with the toxic cleanup -- doesn't decide to demolish the hangar first.

``Mars rovers have solar panels, and so does the space station. Why not here on Earth?'' said Diane Farrar, one of the leaders of the preservation campaign at NASA/Ames Research Center, which owns the building. ``We could call this the biggest solar system in California.''

Mexico health threat uncertain

Reports are inconclusive on the effects of Mexican power plants on the health of their California neighbors:

Environmentalists and some U.S. lawmakers have objected to the plants run by Sempra and Intergen near Mexicali, Mexico, three miles south of the border. Critics say emissions from the plants, which began operating in 2003, can easily cross the border, yet the plants are not bound by U.S. pollution rules.

The GAO report was requested by Reps. Bob Filner, D-San Diego, and Hilda Solis, D-El Monte. It said that the plants use advanced technology and equipment, and partly as a result their releases of nitrogen oxide pollution are under the limits set by the Mexican government.

Pollution from the plants is comparable to pollution from similar plants recently permitted in California, and is relatively low compared to the primary sources of pollution in Imperial County - dust and vehicles, the report said.

But the report said that the full extent of the potential health threat to Imperial County residents is unknown. The report said that DOE's environmental impact statement on the plants, which estimated an increase in asthma hospitalizations in Imperial County of less than one per year, failed to assess a series of factors.

DOE did not address health conditions other than asthma, did not consider effects less severe than hospital stays and did not assess the health effects on susceptible populations like children and low- income adults, GAO said.

With Mexico's less-stringent environmental standards, makes you wonder whether we should let Sempra move California's critical energy infrastructure--from power plants to LNG terminals--South of the Border to begin with!

LADWP Gets New Board, Instructions

Mayor Antonio Villaraigosa has appointed a new Board to the Los Angeles Department of Water and Power and given them marching orders:

Mayor Antonio Villaraigosa on Monday appointed a five-member board for the Los Angeles Department of Water and Power that is packed with environmental advocates who vowed to accelerate the agency's move toward cleaner sources of energy, including solar and wind power.

Villaraigosa said the appointments, announced at a Griffith Park nursery that provides free trees to DWP customers, reflect his commitment to a "cleaner and greener" city.

To do so, of course, will require that DWP workers be on the job!

Law firm weighs heavily in LNG debate

Australian resources firm BHP Billiton has called in the big dogs of law and lobbying to help them gain approval for an LNG terminal in Ventura County.

BHP Billiton, an Australian energy giant and leading contender to build a liquefied natural gas processing terminal off the California coast, has hired a lobbying group overseen by George David Kieffer, a Los Angeles lawyer so trusted by Schwarzenegger that the governor asked him to help recruit staff for the administration. He also has served as a personal lawyer to the governor's wife, Maria Shriver.

The account made Kieffer's firm, Manatt, Phelps & Phillips, the top- grossing firm in the capital in the first quarter of this year, up from a rank of 25th for the same period last year.

Beyond Manatt's efforts on behalf of BHP, a range of liquefied natural gas companies and trade groups joined forces last year to fund a $1 million campaign -- called Californians for Clean, Affordable and Safe Energy -- to increase public support for their product. The public relations team hired by the coalition includes current and former political consultants to the governor and a firm part-owned by Schwarzenegger's chief fundraiser.

The governor has unique authority to approve some of the projects under consideration. He appoints one of the three members of the State Lands Commission, which will decide whether to approve some of the ventures, and he has the sole power to veto any of the panel's decisions.

In recent remarks on liquefied natural gas proposals, Schwarzenegger said he supported a terminal "11, 12 miles off the shore" near Oxnard (Ventura County) -- a description loosely matching BHP's Cabrillo Port plan.

On its merits, Cabrillo Port probably makes the most sense among the proposed LNG sites, given its location and use of new technology, but I suppose bringing in Mannatt is like an insurance policy for BHP.

Electric car drivers still on the grid

Despite efforts by automakers to recall the electric vehicles famously launched in the 1990s and take them off the roads, some folks still want to drive them:

After General Motors began crushing its revolutionary EV1 a couple of years ago, leaseholders held a mock funeral at a Los Angeles cemetery complete with a rabbi, an electric car shrouded in black crepe and emotional farewells. "She died before her time," intoned one mourner.

Devotees go undercover to track down death row EVs. They chase freight trucks loaded with cars headed to the scrap heap. One flew an airplane over a desert wrecking yard, snapping photos of flattened steel corpses in hopes of shaming automakers into offering reprieves for others.

"We want to keep the last remaining cars on the road," Raboy said. "We want to show people there was once a choice — and there could be again."

All-electric cars got a boost in 1990 with the state's quest for zero-emission vehicles. But production never took off, and the auto industry blamed real-world liabilities, such as 100-mile range limits and the need to plug in for hours at a time.

"We simply could not afford to lose any more money on a product that appealed to such a small number of people," said Dave Barthmuss, a GM spokesman. GM reported losing $1 billion on EVs before the company, like every other big automaker, halted production.

The first EV drivers — "early adopters," the industry calls them — considered their electric cars "almost members of their family," Barthmuss said. But there was a downside to that embrace, he added. "Like any member of the family, they managed to ignore the faults."

One potential fault is that the *still* need electricity--and in California, electrons are in as high a demand as gasoline...which may stunt the promise of the 250 MPG Hybrid, as well!

HOV for Hybrid vexes many

The Sacramento Bee points out two areas of hypocrisy in California's new Hybrid HOV law:

Two reader gripes: Aren't carpool lanes supposed to be used to reduce air pollution by encouraging more commuters per car, not more cars in the lane? And wouldn't a hybrid be saving more gas if it was stuck in the jammed-up freeway lanes where it presumably would be running on its electric motor, rather than zipping through the carpool lane on its gas engine?

One answer to the first question is that politicians have been changing their philosophy of carpool lanes over time. Hybrids are not, in fact, the first group of cars to be allowed in carpool lanes during commute hours with just one occupant inside. People in all-electric and compressed natural gas vehicles already have the green light for the carpool lane. Motorcyclists, too. And buses.

The experience of one of those drivers suggests this may take some getting used to for California Highway Patrol officers. One reader reports his son has been pulled over by the CHP several times for driving alone in a carpool lane. The officers failed to notice he was driving an electric vehicle with carpool lane stickers.

Meanwhile, back to the question of why allow hybrids in the higher-speed carpool lane if the most popular hybrid, the Toyota Prius, runs on electricity at low speeds, and mostly gas at higher speeds?

From her comments, it is clear Assemblywoman Fran Pavley, who authored the bill, is interested in getting more hybrids on any road, and the carpool lane privilege is just a politically supportable way of doing that - at least, until the carpool lanes start to get clogged. At that point, presumably the end of 2007, the state will kick the hybrids out of the carpool lanes.

Energy Tax Breaks require accounting trickery

If you're hoping to cash in on those new tax breaks in the Federal Energy bill, you'd better take your accountant with you cars hopping.

Some of the biggest tax incentives are for buyers of hybrid cars — which typically use both electric and gasoline power — and "alternative fuel" vehicles. Current tax law provides these buyers with up to $2,000 in tax deductions. The new law will replace the deductions with tax credits that can reach $3,400.

Tax credits are significantly more valuable than deductions because deductions merely reduce the amount of income that's subject to tax, but a credit reduces the tax owed on a dollar-for-dollar basis. Consequently, a $2,000 deduction saves a person in the 30% federal tax bracket $600 in taxes, and a $2,000 credit saves $2,000.

However, figuring how much of a credit a hybrid-car buyer might receive next year is a bit of a trick.

Under the new law, each hybrid car will qualify for two tax credits. The first credit is based on how many more miles the hybrid gets to the gallon than a similar standard-fuel vehicle.

Hybrids that are only 25% more fuel-efficient than a standard car will qualify for a $400 "fuel economy" credit. Those more than 50% more fuel-efficient qualify for an $800 credit, and those that are 250% more fuel-efficient will get a $2,400 credit.

A "conservation" credit is added on top of the fuel economy credit. This credit is aimed at providing a payback for the car's lifetime fuel savings. This credit ranges from $250 to $1,000 per car.

Theoretically, a car that qualifies for the maximum of both credits would allow its buyer to cut his federal income tax bill by $3,400: $2,400 for the fuel economy credit plus $1,000 for the conservation credit.

Manufacturers, the IRS and possibly the Environmental Protection Agency are expected to work out the details on which cars get which level of tax breaks, manufacturers say. But no one is quite sure how much of a break any individual car will qualify for.

Coastal Commission nixes offshore drilling

Oil supplies may not be keeping up with demand, but the California Coastal Commission doesn't care.

The California Coastal Commission went head-to-head with the federal government over offshore oil drilling Thursday, voting unanimously to reject a U.S. agency's plan to extend 36 petroleum and natural gas leases situated off three south and central state counties.

The nine commissioners cited potential risk to the state's marine environment and wildlife as the driving reason for their decision, made during a meeting in Costa Mesa (Orange County).

The commission's move puts the state of California squarely in opposition to the federal government over offshore oil development. At this point, the Bush administration could move ahead to renew the leases without the commission's imprimatur, but such a move probably would prompt a new round of litigation initiated by the state.

Mayor V seeks truce at DWP

Los Angeles Mayor Antonio Villaraigosa is doing his level best to prevent a strike at the City's Department of Water and Power:

Amid continuing threats of a strike by Department of Water and Power workers if their contract is not approved by the city, Los Angeles Mayor Antonio Villaraigosa called for both sides to reduce the heated rhetoric Thursday and try to work out something agreeable.

Brian D'Arcy, business manager of the International Brotherhood of Electrical Workers, Local 18, first raised the possibility of a job action a week ago when the DWP board declined to approve a five-year extension of its contract with nearly 8,000 workers.

How high can crude prices go?

Looking at the inelasticity of demand, I have to wonder whether triple-digit crude oil prices aren't undreasonable...We're 2/3 of the way there.

Oil continued to beat gravity Friday, shooting past $66 a barrel as traders continued to sweat a scarcity of worldwide production capacity.

September crude surpassed Thursday's high and was recently up 32 cents to $66.12 in electronic Nymex trading. The contract settled at $65.80 Thursday, its highest close ever, after a private consultancy said non-OPEC production growth isn't keeping up with global energy demand.

DWP workers threaten strike

Los Angeles Department of Water and Power workers are threatening to strike over the recent row regarding their double-digit pay increases.

Raising the stakes in the debate over a five-year deal that would give 8,000 DWP workers and managers pay hikes as high as 30 percent, the union leader who negotiated the deal threatened to call a strike if the City Council tries to block formal approval of the contract.

Union chief Brian D'Arcy said the Department of Water and Power employees represented by the International Brotherhood of Electrical Workers, Local 18, are willing to give the mayor and a new DWP board time to understand the issues, but that they don't have unlimited patience.

"It's time for the City Council to look at this as a real emergency now to avoid one later," said D'Arcy, the local's business manager. "We have a deadline of Oct. 1 that we're looking at or there could be a work stoppage."

California to proceed with Hybrid HOV restrictions

Despite slight differences between California's law allowing hybrid cars in carpool lanes, the State will proceed with its original plan.

California's law was supposed to take effect Jan. 1 but first needed approval from the federal government. That permission was tucked into the transportation bill.

The state originally planned to wait for clean-air regulators to reconcile the state bill with the federal legislation, which supporters had said could take months. But the state Air Resources Board had time to review the state and federal legislation before Bush's signature, and decided to proceed with the change immediately, said Gennet Paauwe, a spokeswoman for the board.

Gov. Arnold Schwarzenegger said in a statement that the change was "a common-sense policy" toward reducing air pollution. The state has some of the most polluted regions in the nation.

"The more we can encourage Californians to buy and drive cleaner-air hybrid cars and trucks, and give them some incentive to do so, the better off we will all be," Schwarzenegger said.

Only three hybrid models Toyota's Prius and Honda's hybrid Civic and Insight will be allowed in the lanes. They are the only models that meet the eligibility standards of at least 45 miles per gallon and almost no smog-causing emissions, according to the office of the bill's author, Assemblywoman Fran Pavley, D-Woodland Hills.

Chevron closes Unocal Deal

Unocal will remain a California company:

Oil giant Chevron Corp. completed its $17.9 billion purchase of Unocal Corp. Wednesday, the finale of a tortuous four-month takeover that touched off an international bidding war and strained the United States' relations with China.

The two companies, both survivors of California's 19th century oil boom, declared the sale done just hours after a Unocal shareholders meeting in a Los Angeles-area hotel voted to support it, with more than 96 percent in favor.

Airlines face fuel crisis

You thought you had it bad paying $2.83 a gallon? Just try being in the airlines shoes where a jet-fuel shortage is reminiscent of the gas lines of the 1970s!

Airports in California, Arizona, Florida and Nevada recently came within a few days — and at times within hours — of running out of jet fuel.

Because of supply bottlenecks, airlines were forced to fly in extra fuel from other markets and scramble for deliveries by truck.

But these are expensive, short-term fixes that do not address what airline executives consider to be the underlying problem: with passenger traffic rising above pre-9-11 levels, the nation's aviation business is slowly outgrowing the infrastructure that fuels it.

What started as routine supply tightness in these markets quickly snowballed following disruptive events that included a hurricane, a canceled fuel shipment and, ironically, the airlines' own efforts to prevent shortages, according to several airline executives.

Late July and early August were "unprecedented for Southwest for the number of cities where we've had to manage supply problems," said Glenn Hipp, director of fuel purchasing and inventory management at Dallas-based Southwest Airlines Co. AMR Corp.'s American Airlines, UAL Corp.'s United Airlines and America West Holdings Corp., also said there has been recent supply trouble.

LNG shortage means dirty streets in Long Beach

For those arguing that California doesn't need liquefied natural gas, just look beneath your feet...

City streets will not be swept today because of a regional shortage of liquefied natural gas, which powers the city's sweepers, city officials said Wednesday...

Disruption to an LNG production plant in Topack, Ariz., is partly to blame for the regional shortage. In 2002, the South Coast Air Quality Management District mandated that the city purchase alternative fuel street sweepers.

The city's trash trucks also operate on LNG, although there is enough gas in city reserves to run today's trash routes. Those routes include parts of the Westside, Wrigley, California Heights and Central Long Beach, north of Pacific Coast Highway.

If the city does not get a supply of LNG today, it could have to cancel both trash and street sweeping on Friday, Kuhl said.

Energy Bill upsets Long Beach residents

Shifting control over LNG terminals on land to the Federal Energy Regulatory Commission has Long Beach residents upset over the Federal Energy Bill.

Elisa Trujillo was counting on the state to help stop an energy project she considers dangerous to her and her family.

But President Bush's signature Monday on the nation's new energy bill dashed most of her hopes for beating back the liquefied natural gas import terminal proposed for the nearby port.

"I am so disappointed," the 55-year-old Social Security specialist said.
Trujillo had hoped to appeal to the California Public Utilities Commission to block the terminal. But the nation's new energy law seeks to eliminate the state commission's claim that it has some authority over the project.

The law gives the Federal Energy Regulatory Commission exclusive authority to approve the Long Beach terminal and any other onshore facility for importing the supercooled liquefied natural gas from overseas.

Only one project--the Cabrillo Port--is unaffected by the Energy Bill as it is regulated under the Deepwater Posts Act, which means Californians will still have a say in what happens to the project off the Ventura County coastline.

Unocal vote set

Unocal shareholders are set to vote on Chevron's takeover bid:

After months of haggling and international intrigue, Unocal Corp. shareholders will finally meet today to approve a takeover by Chevron Corp.

The vote will mark the end of Unocal as an independent company and a rebuffing of Chinese attempts to secure much-needed energy resources by buying an American oil company.

Few doubt Chevron will win approval after rival Chinese bidder CNOOC Ltd. pulled out of the takeover battle citing intense political opposition. Once it receives the blessing of shareholders, Chevron plans to close the deal as soon as today.

Ethanol Effects of Energy Bill remain Unclear

Looks like someone will need a crystal ball to figure how, exactly, the Federal Energy Bill--signed yesterday by President Bush--will impact California's gas-additive situation.

Mike Scheible of the California Air Resources Board said the state's ethanol consumption, now tops in the nation, might drop by 20 percent.

Ethanol backers disagreed, saying the legislation could mean even more ethanol, not less, will get blended into California's gas. That's because the new law requires the nation's oil refiners to double the amount of ethanol they currently use by 2012, which virtually guarantees some ethanol consumption in California.

"It translates into more ethanol use in California," said Neil Koehler, chief executive of a company that's building a $52 million ethanol-production plant in Madera.

The new law erases a federal mandate, enforced by the U.S. Environmental Protection Agency, requiring the gas sold in most of the state to contain 5.7 percent ethanol.

California officials said the U.S. rule put refiners in a bind, limiting their ability to blend gas less expensively. Industry consultants said the rule was adding as much as a dime a gallon to the cost of California gas.

The EPA has said that ethanol cleans the air, but state officials contend that ethanol's chemical properties can actually worsen air quality during hot weather.

Diesel prices reaching for heights

Commerce in California may be benefitting for reductions in Workers' Comp costs, but the diesel fuel needed for goods movement keeps getting more expensive.

California's average diesel price approached $3 per gallon Monday, the latest unwelcome record in a sudden cost surge triggered by growing demand and a refinery fire.

The state's average stood at $2.94 per gallon, after soaring 28 cents in the last week, according to the Energy Department.

Meanwhile, some cities -- including San Francisco -- hit $3 Monday, according to the AAA of Northern California auto club.

The prices are more than just a reflection of the sky-high cost of crude oil, which closed at a record $63.94 Monday. A fire at Chevron Corp.'s El Segundo (Los Angeles County) refinery three weeks ago squeezed diesel supplies at a time when truckers and farmers are using more of the vital fuel than before.

Diesel powers almost every major industry in the state. The trucks and trains that haul imported computers, cars and clothes from California's massive ports burn it. So do the tractors used on farms that grow the state's food.

New FERC Chair worries about California power situation

The new chairman of the Federal Energy Regulatory Commission is worried about power supplies in California.

"It's discouraging," said Kelliher, who in July became chairman of the Federal Energy Regulatory Commission. "Five years after the crisis, we're still worried about what the temperature will be in Southern California today."

As Kelliher settles into the new job, California's energy problems, old and new, may provide a key test of his leadership.

Relations between the state and the federal agency have improved since the stormy days of the 2000-01 energy crisis. But once again, the risk of shortages in California is bringing scrutiny to energy policy — and unresolved disputes over refunds dating to the power meltdown are still soaking up time and effort at the federal agency.

"I think we need to close out the California crisis," Kelliher said. "Other issues have been languishing."

DWP workers among highest paid

Claims by workers at the Los Angeles Department of Water and Power that they deserve double-digit raises to keep their salaries competitive with the private sector are unfounded, according to the LA Times:

Los Angeles Department of Water and Power officials say they need to offer employees a union contract that could boost salaries by as much as 34% over five years to remain competitive with other utilities.

But the city's utility already has a higher pay scale for key positions than three of the four other major utilities in the state. And agency officials admit they did not research how their salaries compared with other utilities before recommending the raises.

Go Green for common ground for Governor, Legislature, People

Mark Baldasare finds common ground between the Governor, the Legislature and the people of California--protecting the environment.

In spite of all the partisan bickering in Sacramento, the governor and Legislature have produced a unique package of state laws that address global warming, and the public seems to support these efforts. In fact, when it comes to solutions on global warming, California has bucked its usual trend in policymaking, favoring the legislative process of lawmaking over direct democracy through the citizens' initiative process.

Three in four residents support the state law, championed by Democratic legislators, that requires automakers to further reduce the emissions of greenhouse gases in new automobiles. Seven in 10 also favor the governor's proposal to reduce greenhouse gas emissions by industry, power plants, and cars by more than 80 percent over the next 50 years. As for the state's energy policies, there is also solid support for efforts that would help to reduce greenhouse gas emissions. Three in four residents want state policies that promote the use of more solar energy in California's homes and businesses, and most favor a plan to have California lead the nation in hydrogen fuel cell technology by building a "hydrogen highway" with hydrogen fueling stations by 2010.

For Schwarzenegger, there do not seem to be any immediate political gains for taking steps to reduce global warming. He continues to be mired in low job approval ratings, and the general public is not giving him much credit for his serious efforts to address global warming. Yet, the governor's actions today could improve his chances for reelection in 2006. For instance, he would be able to point to a "green" environmental record as evidence of his independence from the policies of the Bush administration. His Democratic opponents would not be able to portray him as a Republican who is out of touch with public concerns about global warming. This would increase his reach to the two in three voters outside of his GOP base. In addition, if Schwarzenegger can continue to deliver on environmental issues, he may be able to reestablish his credentials as a governor who bridges the state's partisan divide.

To do so will require a willingness to forgive and forget on the part of the governor and the Legislature. They need to find a way to work together for a better future, even at a time when they are fighting in the here-and-now over a special election.

Good luck. Democrats have tried to scuttle even the Solar Homes initiative by injecting language requiring union labor be used to install the solar panels--at a cost to the people and the environment.

Glitch may delay hybrid access to carpools

A conflict between State and Federal laws may delay the granting of access to carpool lanes for Hybrid drivers.

Owners of hybrid cars are fast approaching the day when they will be allowed to drive solo in California's car pool lanes.

State lawmakers passed a bill last year that gave some types of the high-mileage, low-emission vehicles access to the coveted lanes, a privilege meant to encourage drivers to buy the environmentally friendly cars.

California's law was to take effect Jan. 1 but first needed approval from the federal government.

That permission was tucked into a $286 billion transportation bill Congress passed last week, meaning there is one last strand of red tape keeping hybrids out of the high-occupancy vehicle lanes: State air regulators need to clarify which vehicles meet the mileage and emissions standards.

Ironically, the federal waiver would not have happened were it not for Schwarzenegger signing legislation to allow hybrids in carpool lanes, however, California won't get to make the change immediately because of its variant standards.

Condors at risk from oil exploration

There's oil in the hills of Southern California--which poses a problem for the condors who live there.

A recent decision to once again open Los Padres National Forest to gas and oil exploration could threaten efforts to replenish the condor population, some say.

While the Forest Service said it has taken great pains to protect one of America's largest birds, some environmentalists claim any new development, and the people and consequences that come with it, could harm the condors.

"It's very ironic," said Jeff Kuyper, executive director of Los Padres ForestWatch. "Here they have the condor sanctuary that is closed to the public, even to hikers, and right next to that they are allowing oil drilling. It doesn't make sense to us."

Biologists with the Forest Service said any new drilling would have a negligible effect on the birds. New regulations for drilling, such as keeping a clean drilling site and sealing all containers, would keep the birds from picking up trash or getting oil on them, which has been a problem in the past.

Little critters may solve MTBE contamination problem

Technology may come to save the day with the leakage of gasoline-additive MTBE into the State's water supply.

To clean up a massive plume of MTBE in Los Angeles' drinking water supply, scientists have produced trillions of tiny "bugs" that feed on the toxic gasoline additive and leave the water pure enough to return to the aquifer.

The project is the first of its kind in Los Angeles, and officials rave that the superefficient microbes will restore millions of gallons of precious San Fernando Valley groundwater, which provides 10 percent of the city's drinking supply.

"This is exciting because we're saving the water, and water is precious in the region," said Yue Rong, a senior environmental scientist with the Los Angeles Regional Water Quality Control Board.

Scientists expect MTBE-gobbling bacteria will become a cheaper, safer way to clean up groundwater contamination.

I have to wonder, though, how toxic MTBE can be if these little critters thrive on it.

Villaraigosa makes changes to DWP board

Rumors about changes to the board of commissioners at the LA Department of Water and Power were correct.

Villaraigosa is said to be nominating longtime political associates Nick Patsaouras and Bill Burke, as well as well-known environmentalists Mary Nichols and David Nahai. The fifth member is believed to be trial lawyer Edith Ramirez.

The Board of Water and Power Commissioners has broad authority and power to submit requests for water and electricity rate hikes. The current board has proposed a 3.8 percent increase in water rates.

The board sets policy for the Department of Water and Power, which became embroiled in several controversies under former Mayor James Hahn.

Hybrids spreading across California

In the San Francisco Bay Area, BART stations will be getting shiny, new, fuel-efficient hybrids for people to rent by the hour:

Promising a "major Bay Area expansion,'' City CarShare on Wednesday said that it has just opened vehicle rental locations at two BART stations, in Berkeley and Oakland.

City CarShare's two new East Bay rental locations, which opened last week, are at the North Berkeley and MacArthur BART stations, both of which will offer 2005 model Toyota Prius hybrid vehicles.

The organization rents parking spots for its cars at three other East Bay BART stations -- Ashby, Rockridge and Lake Merritt -- and at or near the Glen Park, Mission, Powell Street and Civic Center BART stations in San Francisco.

Moves like this may explain why Toyota is bullish on the vehicles:

Toyota Motor Corp. wants hybrids to make up 25 percent of its U.S. sales by early in the next decade and is considering adding the technology to its entire lineup, including trucks, Toyota's North American president Jim Press said Wednesday.

"To us, it's not a passing phase but a vital technology for the 21st century," Press said at an annual automotive conference in Traverse City, about 200 miles from Detroit.

Of course, with gas prices going back up to record highs, who could blame them for thinking there will be demand?

Enron settlement soars

The payout to the University of California from failed Energy giant Enron increased yesterday:

The University of California and other investors scored their biggest recovery yet in the Enron Corp. securities fraud case Tuesday, obtaining $2.4 billion from Canadian Imperial Bank of Commerce.

The deal means UC, negotiating on behalf of thousands of Enron stock and bond holders, has obtained settlements totaling $7.12 billion. That's more than any other securities case in history, said UC's attorney, William Lerach.

"Our strategy of pursuing these settlements with the banks is working," said Lerach, a securities-fraud specialist who practices in San Diego.

In a lawsuit filed three years ago, UC said CIBC underwrote many of Enron's stock and bond offerings and had its investment analysts issue glowing reports that helped pump up Enron's stock price. The suit also said CIBC helped put together a series of "illicit partnerships" that enabled Enron to cover up its debts and inflate profits.

LA Agency balks at Union contract

The commissioners of the Los Angeles Department of Water and Power decided in favor of ratepayers when weighing their proposed labor contract.

In a surprise move, the board declined to act on the new contract. That decision could shunt the controversy to Villaraigosa, who is on the verge of naming his own commissioners to the board.

The mayor's spokesman, Joe Ramallo, conceded Tuesday that the issue may end up in the mayor's in-box.

"Should this come before the mayor's appointees, they will thoroughly review it and consider it," he said, noting that Villaraigosa "is concerned about whether the pay raises can be fiscally sustained."

The union that represents the workers and negotiated the contract was one of the few that backed Villaraigosa during the campaign, and political observers have wondered how he would handle the conflict between his promise to cut city expenses and the union's high wages.

The proposed contract extension would boost the salary of DWP workers at least 17% and as much as 34% over five years, an increase significantly more than what other unionized city workers receive.

Lockyer sues over Ethanol mandate

Getting nowhere with the federal government, California officials are going to court to get rid of the silly oxygenate mandate for California gasoline.

California's attorney general sued the U.S. government Monday to wipe out the federal rule requiring the use of ethanol in California gas tanks.

But new federal energy legislation awaiting President Bush's signature could soften the ethanol requirement and possibly render the lawsuit meaningless, a spokeswoman for Attorney General Bill Lockyer acknowledged.

For years California has been fighting a federal requirement that says ethanol must be blended into the gasoline sold in most of California.

The federal government says ethanol helps clean the air, but California says the corn-based additive is expensive and, because of its chemical properties, actually worsens air pollution in hot weather.

DWP union contract under scrutiny

The Los Angeles Department of Water and power already has some of the lowest rates around, so it can afford to pay its workers more, or so the logic goes. But that might not fly at City Council.

To the chagrin of the city unions, the Department of Water and Power has agreed to give its 8,000 union workers a minimum 16.25 percent pay hike worth nearly $69 million over the next five years but the increases could balloon to 30 percent if inflation rises.

The proposed amendment to the existing memorandum of understanding with the International Brotherhood of Electrical Workers (IBEW), Local 18, goes to DWP commissioners for consideration today. It would require City Council approval.

The deal would automatically bump DWP employees' salaries up at least 3.25 percent each year on Oct. 1, and more if inflation is higher, to a maximum of 6 percent a year. The agreement could be reopened if both parties agree in either of the last two years of the deal.

The DWP's union is the only one in the city that for about a decade has negotiated contracts whose salary increases are tied to the consumer price index, said City Administrative Officer Bill Fujioka.

The city's civilian work force is in the midst of a three-year contract with a total of 6.25 percent in salary increases.

Julie Butcher, general manager of Service Employees International Union, Local 347, accused city officials of falsely claiming there wasn't more money for raises and vowed to take whatever action is necessary -- including calling a strike -- to get equitable treatment for her members.

CNOOC pulls out of Unocal Game

It looks like Unocal will remain a California company, as the chinese oil company seeking to buy out the Southern California oil giant has pulled out of the picture:

The giant Chinese oil company Cnooc today ended its $18.5 billion takeover bid for the Unocal Corporation of America, citing fierce political opposition to its bid in Washington that it called “regrettable and unjustified."

The decision, which was announced this morning in New York, ends a fierce takeover fight between Cnooc and the Chevron Corporation, which have both been vying to acquire Unocal’s valuable oil and natural gas assets, much of which are based in the United States and Asia.

The move now clears the way for the Chevron Corporation of America to finalize its acquisition of Unocal for about $17 billion in cash and stock, much less than the Chinese bid but an offer that comes with none of the political opposition that Cnooc has encountered in the United States.

PG&E seeks to hike rates on customers

Pacific Gas and Electric is looking to squeeze just a little more out of its customers as it recovers from bankruptcy:

Pacific Gas and Electric Co. wants to raise electrical bills for residential customers by 1.6 percent in 2007 to pay for upgrades to its aging grid, the San Francisco utility disclosed Monday.

The company also will seek a 2.8 percent increase in natural gas rates, according to papers PG&E filed Monday with state regulators.

A typical household would pay $1.03 more per month for electricity and $1. 44 for gas if the California Public Utilities Commission approves the higher rates. A decision isn't expected until late next year.

Sempra plans LNG terminal...on Gulf Coast

Whether or not California builds an LNG terminal or two to meet its natural gas needs, the rest of the country isn't standing idly by as they seek to keep supplies up with demand:

Sempra Energy said yesterday it would begin construction within two months of its second North American liquefied natural gas receiving terminal, adding a site near Lake Charles, La., to a plant under construction near Ensenada in Baja California.

In moving ahead with the $700 million Louisiana project, Sempra said it had pre-sold about 40 percent of the facility's potential natural gas output to Eni S.p.A., an Italian energy company.

Buona fortuna, ma abbiamo bisogno di gaz naturale in California!

Little done to fix CA Power woes

Once the lights came back on in 2001, it was easy to forget how precarious California's energy situation was. Four years later, reality is giving us a reminder that we should have had the same sense of urgency after the energy crisis as during it.

"Southern California is hitting peaks [in demand] in July when, historically, it hits its peak in September," warned John Geesman, a member of the California Energy Commission. "Does that mean there's worse ahead?"

The forecast isn't promising. The U.S. Climate Prediction Service expects temperatures to be 5 to 10 degrees above normal across California and the West from August through October. If that prediction comes true, analysts say, there's a good chance for more power emergencies — and possibly blackouts — in the coming weeks.

The dire prediction comes four years after an energy crisis that cost California billions of dollars and helped unseat Gov. Gray Davis. It also drives home the fact that very little has been done in the intervening four years to help the state avert a repeat of that traumatic experience.

California still doesn't have enough power plants to meet the demands of its growing population and expanding economy — a situation made worse by the fact that much of the population growth is occurring away from the cooler coasts, in sizzling interior areas such as the Inland Empire and Antelope Valley. And much of the electricity that is being produced often can't be sent to where it's most needed because of the state's outdated, congested system of high-voltage transmission lines.

"The energy picture in California is not a whole lot prettier than it was under Gray Davis," said Stephen Conant, senior Western power analyst with Energy Security Analysis Inc.

And as tight as supplies are this year, experts expect conditions to be even more tenuous in the summers of 2006, 2007 and 2008.

Indeed, the hangover from the state's disastrous attempt at deregulating its electricity market in 1996 continues to bedevil efforts to provide the Golden State with adequate electricity supplies.

"Part of it is the battle going on between the governor and the Legislature," Conant said. "Part of it is the incompetence of the regulatory apparatus. Part of it is uncertainty over how to best" generate more electricity.

California's fumbling, analysts say, contrasts with progress made by East Coast policymakers, who managed to open their electricity markets and boost generation with few false steps. A widespread heat surge last week spurred record electricity use across the East, South and Southeast, but grid operators reported no significant problems.

DWP charges more to alt-energy generators

Want to produce your own green energy in the City of Angels? You'll have to pay more for it, under a new LADWP pricing regime.

Beginning in January, the Department of Water and Power will charge a new fee to the Los Angeles Community College District and nearly a dozen other unidentified customers that generate a portion of their own electricity, officials said.

"The fact of the matter is, they do not want you to self-generate," said Tony Fairclough, an engineering management consultant for the college district. "They want to appear to be 'green,' but they want those dollars."

But officials with the municipal utility say the new rate schedule will cover the costs of providing back-up power in case the customer's self-generating system fails.

"Our reason for doing this is not to make it less attractive to do co-generation," said Ron Deaton, the city's former chief legislative analyst who took over last fall as general manager of the DWP.

"If you're going to hook up to our system, we have certain costs that we have to bear in order to pick up your load. We don't think it's fair to the rest of the customers for one group not to pay those costs."

DWP officials also insist the utility is committed to meeting the so-called Renewable Portfolio Standard, which calls for increasing renewable power from just 5 percent of the city's energy mix now to 13 percent by 2010 and 20 percent by 2017.

Henry Martinez, DWP chief operating officer for power, said the utility is seeking proposals for renewable-energy projects and is also considering producing some alternative energy itself.

But the new rate has infuriated customers, some of whom have received millions in grants from the DWP and other entities to install generators, solar panels and other alternative-energy equipment.

So the LADWP will give a grant to install solar panels, then turn around and take it out of your backside in higher electricity prices. Classy.

Nuclear hopes rise with fossil fuel prices

Proponents of building more nuclear facilities are salivating at $60+ oil prices:

Nestled in the energy bill that Congress approved last week is perhaps the most tangible evidence yet that nuclear power, long shunned by many as a dangerous energy source, is on the verge of a comeback.

The broad energy plan includes billions of federal dollars to jump-start production of nuclear reactors. The incentives, from tax breaks to loan guarantees, come at a time when soaring oil prices and increasing public concern about global warming have forced even some leading environmentalists to rethink their opposition to nuclear power as a cleaner, cheaper alternative to traditional fossil fuels.

"Nuclear (power), in combination with renewables, is the only source of electrical energy that can replace coal and gas to a significant degree," said Greenpeace co-founder Patrick Moore, now chairman of Greenspirit Strategies of Canada, which helps companies develop environmentally friendly policies.

Small Businesses take big hit from energy costs

Small businesses with narrow profit marguins can least afford the rising costs of energy:

In a nationwide telephone and e-mail poll conducted in July, 72 percent of respondents said their firms are affected by high gasoline prices.

In April, 64 percent said that was the case.

Yet, 51 percent of those hit by higher prices said they are not passing the increased costs on to customers.

That result is little changed from April.

"Fuel costs are an example of the kind of fluctuating expenses that small businesses must deal with every day," said Gregg Steinberg, president of International Profit Associates, a management consultant to small and midsized companies.

Steinberg said "the use of variable pricing strategies (such as pricing by the project or setting prices high but offering discounts on different items) – whether it is for fuel or other escalating costs – should be considered in order to control costs and ensure ongoing success."

The OC Register offers tips on how to save money on energy costs.