Governor signs pro-environment energy bills

Governor Schwarzenegger has signed legislation encouraging the use of alternative energy fuels...

Governor Arnold Schwarzenegger announced today that he has signed legislation that will encourage the use of alternative fuels and reduce California's reliance on foreign oil. He also signed legislation to increase energy efficiency, aimed at protecting California's environment.

"Californians have always led the way in protecting our lands and oceans and pioneering new forms of energy use that reduce our reliance on foreign fuels. Today, we are continuing that proud legacy with new legislation that will decrease our dependence on foreign oil and encourage the use of cleaner burning domestic fuels," said Governor Schwarzenegger. "We also must be more efficient in our current energy usage to better protect our environment. These bills will help California ensure reliable, cleaner and more cost-effective energy - and a cleaner environment."

Natural gas prices to pinch over winter

Relying too heavily on domestic sources of Natural Gas, Californians will have a harder time heating their homes this winter.

Northern Californians face a double punch to their budgets this fall and winter as damage caused by hurricanes Katrina and Rita threatens to keep gasoline near $3 a gallon and send winter heating bills soaring.

Pacific Gas and Electric Co., the primary supplier of natural gas in Northern and Central California, estimates that pinched supplies - largely from the Gulf Coast - will cause natural gas bills here to rise 40 percent to 50 percent this winter compared with last.

Sounds like we need some LNG!

Demand for Gasoline Inelastic in California

Despite $3-a-gallon gasoline, Californians cannot seem to get out of their beloved automobiles:

John Cherniavsky has engineered a bus-to-train-to-bike commute to work, racing each morning to catch the train in the three-minute window after his bus hits the station.

Jerry Martinez and his wife leave their gas-guzzling Suburban at home in Tracy and drive to their Bay Area jobs in gas-sipping sedans.

Greg Heibel has put off buying an SUV so he can kick the tires on more fuel-efficient vehicles big enough for his growing family.

But despite pain in the pocketbook from soaring gas prices, it's too soon for most middle-income Americans to give up their low-mileage Yukons, sell their Central Valley homes to move closer to work or otherwise radically change their commuter way of life.

It might take years of much higher gas prices to dramatically change the behavior of middle-income or affluent Americans, experts say. In short, $3 gas might make them mad as hell, but they're far from reaching the point where they won't take it anymore.

Not-so-Robust Rita reflected in receding energy prices

With Hurricane Rita dissipating before impact, everyone across the nation should be celebrating.

Futures prices for oil, gasoline and heating oil fell Sunday in an extended trading session in New York after preliminary inspections showed less-than-expected damage to refineries in Hurricane Rita's path.

Nonetheless, oil experts warned that Rita's winds packed enough punch to cripple a handful of refineries for a few weeks — and that means retail gasoline prices could rise over the next month in some parts of the country before descending again.

"I think we kind of dodged one of those rocket-propelled grenades, but we took a couple of bullets" in the refining industry, said Tom Kloza, oil analyst and editorial director at the Oil Price Information Service. "This means supply is going to be touch-and-go until about Columbus Day, and generally, we'll see higher [pump] prices."

Consumers in the Southeast and Midwest are the most vulnerable to price hikes, Kloza said. He predicted pump prices there could jump back to $3 or so "until supply gets into balance."

Berkeley Prof: Ethanol harming environment

Dare to speak out against an industry subsidizing farmers in key Presidential election State Iowa and prepare to get attention.

It began benignly enough as an assignment for the 15 freshmen in Tad Patzek's UC Berkeley college seminar class. But it soon mushroomed into something much larger.

Patzek found himself in the national spotlight as his scientific paper published in June touched raw nerves throughout the nation's energy and farm industries. Gas prices were climbing higher; Congress was in the midst of drafting an energy policy; and the article criticized one possible solution -- making ethanol fuel from corn.

Hundreds of newspapers wrote about the publication. E-mails flooded Patzek's in-box. People yelled at him over the phone. He was invited to the National Press Club in Washington to debate the issue and to Chicago to speak to investors.

Patzek and David Pimentel, a Cornell scientist who had been a lone public voice against corn ethanol for more than 30 years, argued that corn ethanol did the environment more harm than good. Growing corn, fertilizing the fields, transporting it to the factories and then out to where it was needed took more energy than the resulting ethanol would ultimately generate, they said.

Gas Company Profits Triple in last year

Gasoline giants are getting scrutiny with higher prices yielding higher profits:

When the average price of a gallon of regular gasoline peaked at $3.07 recently, it was partly because the nation's refineries were getting an estimated 99 cents on each gallon sold. That was more than three times the amount they earned a year ago when regular unleaded was selling for $1.87.

The companies that pump oil from the ground swept in an additional 47 cents on each gallon, a 46 percent jump over the same period.

Governor comes out against 80

Governor Arnold Schwarzenegger announced his positions on the November ballot measures...and he is opposing two of them--including the electricity re-regulation measure, Proposition 80.

Business group opposes Prop 80

San Vernando Valley Business group, the Valley Industry and Commerce Association is lining up against Proposition 80.

Proposition 80, an initiative constitutional amendment which attempts to re-regulate the state’s electric utilities by reversing voter-enacted deregulation status, drew outrage from the Valley Industry and Commerce Association (VICA) Board of Directors, as they voted firmly against the proposition this afternoon.

Randall Neudeck, Co-Chair of the VICA Environment, Infrastructure and Water Committee, voiced his displeasure, stating, “Proposition 80 feeds off of utility consumers’ fear of blackouts and the supposed ‘market manipulation’ caused by deregulation in order to bring back regulation of the industry. If passed, it would neither lower electric bills nor prevent blackouts; instead, it would limit green energy from solar and geothermal resources – and eliminate consumer choice.”

Proposition 80 would subject electric service providers to control and regulation by the California Public Utilities Commission. To VICA, this disregards California voters’ overwhelming decision to deregulate the industry; imposes restrictions on electricity customers’ ability to switch from private utilities to other electric providers; and disingenuously claims that registration by electric service providers with the Commission constitutes the providers’ consent to regulation.

Regulatory Process costs Millions

The Australian company seeking to help California meet its natural gas needs is one of the State's leading spenders on lobbyists.

BHP Billiton, an Australian mining company with an office in Oxnard, spent $1.3 million on lobbying, according to California Secretary of State records. Only the California State Teachers Association, at about $8.6 million, and the Western States Petroleum Association, at about $1.4 million, spent more.

A company spokesman said the lobbying is focused solely on Cabrillo Port, the controversial floating terminal proposed about 20 miles offshore from Port Hueneme. Tankers bearing imported natural gas transformed into a liquid would dock at the terminal and offload their cargo, which would then be transformed back into gas and piped onto land.

What a waste. This company is trying to do something good for California and all we can do is put up more obstacles.

Oil Prices march on Rita news

Is there any chance that the Marga-Rita won't replace the Hurricane as the drink of choice for New Orleans residents displaced in Houston? Not unless rising oil prices make it too expensive to import tequila.

Oil prices recorded their highest one-day dollar jump in history Monday as Tropical Storm Rita took aim at Houston, threatening to smash through Gulf Coast refineries and offshore wells that Hurricane Katrina spared.

Crude oil for October delivery leapt $4.39, or 7 percent, to hit $67.39 per barrel, after falling for most of the past two weeks. It remains below its post-Katrina peak on Aug. 30, when it closed at $69.81.

Rita isn't a hurricane -- yet. But Monday's forecast showed the storm spinning past the Florida Keys and into the warm waters of the Caribbean Sea, possibly striking land near Houston -- the center of the nation's oil industry -- later this week.

If that prediction holds, the storm will charge through a thicket of offshore oil rigs that Katrina missed when it slammed into Louisiana and Mississippi last month. And it would strike a stretch of the Texas coast crowded with gasoline refineries.

CA Power Grid still lacking

Governor Schwarzenegger has more ammo in his arsenal to push the Legislature to reconsider his plans for reforming California's electric system--a new report points out just how fragile it is.

“If a large area of California is hot and there is also demand on the energy grid throughout the western U.S., these conditions will likely lead to blackouts,” says Norm Miller, a Berkeley Lab climatologist who examined the impacts heat extremes will have on the Golden State’s energy demands.

Miller presented the study Sept. 15 at the 2nd Annual Climate Change Research Conference and the First Scientific Conference of the West Coast Governors’ Global Warming Initiative, which was held in Sacramento Sept. 14-16. The research is funded by the California Energy Commission and the California Environmental Protection Agency as part of the West Coast Governors’ Global Warming Initiative. In addition, Miller and colleagues are working on two other studies as part of the Governors’ Global Warming Initiative: an analysis of long-term, multi-decade droughts in California, and the likelihood of storm surges and flooding in Northern California's Sacramento-San Joaquin Delta region, where the Sacramento and San Joaquin rivers drain into the San Francisco Bay.

LNG Critics: Safety Measure Stinks

There's no winning over opponents of liquefied natural gas along California's coastline. First, they instill fear over the possibility of a leak--now they object to the odiferous safety solution proposed to address their concerns.

BHP Billiton officials have told federal officials they plan to use an unpleasant smelling chemical aboard their proposed liquefied natural gas ship in an effort to make any gas leaks detectable by scent.

In documents released last week, Billiton said it now plans to add the sharp smelling chemical to the natural gas before it is pumped from the ship, proposed to be located off the coast of Malibu, into a floating turret-like connection, down 2,300 feet to the ocean floor and then ashore through 20-mile-long twin pipelines to Oxnard.

"Based on advice from regulatory agencies, Billiton has modified the application to provide for an odorant unit located on the FSRU immediately prior to the gas export swivels in the mooring system," the company said in its letter.

Sounds like some folks just can't be pleased.

Rising Natural Gas prices to hit heating-homeowners hard

Those who claimed California didn't need liquefied natural gas because existing supplies were sufficient in California are being proven wrong (shocker).

Hurricane Katrina disrupted natural gas production in the Gulf of Mexico and worsened already tight supplies, according to the state's three major utilities.

Natural gas bills for home heating could soar by more than 40 percent -- the steepest increase since California's energy crisis in 2001-02 -- and cause economic hardship for consumers also facing record-high prices at the gasoline pump.

"It's going to make it an even tougher winter for a lot of households that don't have extra money," said Bob Finkelstein, who heads The Utility Reform Network in San Francisco. "Everyone is going to feel the burden."

Someone--maybe TURN--should consider what strategies they might employ to recover these costs from those who told us that existing supplies were sufficient.

"Paperwork" new culprit in LA Blackout Blame Game

After pointing fingers at each other earlier this week over Los Angeles' massive blackout, DWP workers and administrators have found a culprit they can agree on.

An inaccurate work order led a crew to cut the lines that caused Monday's power outage to 2 million people in Los Angeles, the city's Department of Water and Power has determined.

"It was a case of miscommunication," Henry Martinez, an assistant general manager for the DWP, said Thursday.

DWP engineers who planned the replacement of a control system at a Toluca Lake receiving station specified that a bundle of three charged lines should be left intact, but work drawings handed to the crew called for the lines to be cut and removed, Martinez said.

Switch to winter gas formula may ease prices

While gasoline prices have floted downward like a feather since reaching Katrina-related peaks in California two weeks ago, a regulatory change could help consumers even more:

Blends of gasoline normally used in winter should begin showing up at California gas stations any day now, a move that should increase supply and ease prices, a state official said Thursday.

A week after the switch was approved by the California Air Resources Board, other regulatory approvals have been lined up and the winter gas "should start flowing into the system in the next 24 to 48 hours," said Claudia Chandler, spokeswoman for the California Energy Commission.

Worker mistake darkens Los Angeles

Those LADWP workers should reconsider their demands for an 18% pay raise after one of their workers reportedly made a mistake darkerning half of the City. Despite what the Los Angeles Times or others may lead you to believe, there is no way such a blackout could be attributed to Governor Schwarzenegger, the Cal ISO, the Public Utilities Commission or energy deregulation.

The Los Angeles Department of Water and Power was exempted from deregulation in 1996 and has been generally unaffected since then. When the rest of the State was going dark five years ago, the lights stayed on in L.A.--and just the opposite happened today.

During the confusion of the moment, it crossed my mind that either a major generation source (Hoover Dam?) or transmission line to the City had been cut...but it turned out to be something more minor. Given the chaos in L.A., let's be glad that's all it was!

Senate Kills LNG siting Bill

One benefit of the State Senate taking off a day early: it meant the end of a bill which would have added an extra layer of bureaucracy for all state-controlled LNG terminal siting.

A bill that would have required the state Energy Commission to review and rank the various proposals to build liquefied natural gas terminals on or off the California shore survived its toughest vote late Thursday in the Assembly -- but then died when the Senate adjourned before taking the final action that would have been needed to send it to Gov. Arnold Schwarzenegger.

The measure was sought by environmental groups that contend the state needs to take a comprehensive look at the four proposals -- including two off Ventura County -- to determine which one, if any, best meets California's energy needs while also protecting public safety and the environment.

It took several rounds of voting, but the measure ultimately won the support of 41 members of the Assembly -- the minimum needed for passage -- shortly after 9 p.m. But before the bill had been transmitted across the hall, Senate President Pro Tem Don Perata abruptly adjourned his session and sent senators home for the year. The bill in an earlier version had been approved by the Senate, but a final vote on the amended version was necessary.

High Diesel Prices lead to theft

The market for diesel fuel seems to have exceeded its equilibrium value. While demand is still high enough to justify prices, those prices are beyond what people are willing to pay--leading to an infortunate "externality"--theft.

On a recent morning, almond grower Scott Hunter ventured into the predawn darkness to discover that rustlers had made off with 900 gallons of diesel worth more than $2,700. It was the fourth time in recent months that thieves had raided the tanks at Hunter's Merced County farm.

To keep the thieves out, Hunter had installed chain-link fences, razor wire and bunkerlike concrete structures around his fuel pumps. But they cut a hole through his fence, escaping with the diesel.

Diesel prices hovered around $3.25 a gallon last week, $1.11 more than at the same time last year, according to the U.S. Energy Department.

Authorities say these record fuel prices have resulted in brazen diesel rustling from trucks and tanks in many rural areas of the state — especially unguarded farms in the Central Valley.

Other kinds of fuel thefts are increasing. Many people are rushing to buy locking gas caps after reports that motorists were siphoning gasoline from neighbors' cars.

Politics dim solar panel initiatives

The Democratic Legislature just couldn't help itself and decided it would rather embarass Governor Schwarzenegger than do anything for the environment or the State's energy supplies:

Senate Bill 1, the Million Solar Roofs Initiative, began as a top priority for Republican Gov. Arnold Schwarzenegger and a bipartisan group of lawmakers, including an Irvine state senator.

It passed the Senate on a 30-5 vote in June, and a poll found 76 percent of Californians supported the plan in July. But in August, something went wrong.

Shortly before midnight Thursday, as the 2005 session of the Legislature was coming to a close, Levine and del Chiaro met one last time in the hall outside the Assembly chambers. They began shouting. Levine's aide pulled him back. Del Chiaro left in tears.

Lawmakers passed hundreds of bills before adjourning for 2005 last week. They passed a $118 billion budget close to deadline for the first time in five years. They passed a "car buyers bill of rights." They toughened sex-offender laws.

But they couldn't make the solar-roofs initiative happen.

BoiFromTroy makes some interesting observations about this bill talking on New York radio about, of all things, gay marriage.

Vacation observations: Gasoline Pricing Parity

Back from a week off of blogging, I have this personal observation to make. For the first time in memory, the cost of a gallon of gas is about the same in Los Angeles as in Honolulu as in Texas. Supply and demand at work, I guess, as California and Hawaii felt minimal impacts from Hurricane Katrina, as they have their own refineries and oil blends.

LNG terminals survive Katrina

If there is an upside to the fearmongering over liquefied natural gas, it is that the facilities are built with every precaution to keep them safe.

The storm struck to the east of Southern Union's Trunkline liquefied natural gas terminal in Lake Charles, said company spokesman Jack Barnett.

The Trunkline LNG Co.'s infrastructure was spared any damage, as were Southern Union's pipelines that originate in the Gulf Coast region.

"Our systems are fine," said Barnett on Tuesday. Southern Union was waiting for the production platforms in the Gulf to begin operations again.

So major natural disasters from Katrina to the Christmas Tsunami are 0-2 against LNG. Not a bad safety record if you ask me.

Concentration of oil resources can be costly in disasters

One lesson of Hurricane Katrina is that the concentration of the nation's oil production has put supplies at risk.

Hurricane Katrina struck the United States at a delicate pressure point: its fuel hub.

Rampaging through the Gulf Coast this week, the hurricane caused devastating damage to a region that's responsible for almost half the nation's domestic crude oil supply and refinery output. The Gulf Coast also serves as the receiving point for about 60 percent of the oil and gas that come from overseas.

The U.S. government said 91 percent of the gulf's oil production was out of commission Wednesday, and analysts said several refineries could be out of service for days, if not weeks.

With California and other parts of the country shying away from oil and gasoline production, the major oil companies are spending billions to develop new production in the gulf - making the nation's energy infrastructure increasingly concentrated.

Perhaps it's time to start considering requiring regional responsibility...

Transmission line would link to renewable power

San Diego Gas and Electric is planning a new transmission line to link their customers to green power sources in the East.

The new line would extend about 120 miles -- its exact route remains undetermined -- and could carry 1,000 megawatts, enough to power about 650,000 homes, SDG&E said.

The utility said the line, dubbed the Sunrise Powerlink, would be needed by 2010 or 2011 to bolster reliability in a region with growing electricity demand and would be essential for the utility to meet a state goal of deriving 20 percent of its electricity from renewable sources by 2010.

Edwin Guiles, chief executive of SDG&E, said those potential renewable resources lie -- largely to the east of San Diego in the form of geothermal, solar and wind power.