Military wants say on LNG siting

After a liquefed natural gas terminal was proposed by Crystal Energy at Platform Grace off the Ventura Coast--in the line of a military test range--the Pentagon says it wants in on the regulatory process over LNG.

Leading West Coast officials of the Navy and Marines told a state legislative panel Thursday that regulatory agencies overseeing the siting of liquefied natural gas terminals should strongly consider their potential effects on military training and preparedness.

...Lehnert and Navy Capt. Michael Allen said their agencies are preparing a report that will be sent up the Defense Department chain of command. It will address potential conflicts between offshore military training exercises and both the sites of proposed LNG terminals and the routes of tankers that would dock at those terminals.

Natural Gas Prices to add punch to Consumer Pocketbooks

Customers of Pacific Gas and Electric will be feeling the pinch in the pocketbook caused by soaring natural gas prices.

Reflecting the disruption in Gulf Coast natural gas supplies, heating bills will jump 49.6 percent for millions of Californians in November compared with a year ago, Pacific Gas and Electric Co. said Thursday.

The increase is in line with projections PG&E made a month ago, in the immediate aftermath of Hurricane Katrina.

PG&E said average residential customers can expect to pay $80.30 in November, a $26.61 increase over a year earlier.

The CPUC is approving measures to ease the pain, but in the end, only new supplies will be the solution.

Oil companies reap rewards from high prices

As the price of oil soared this summer, so did the profits of oil companies:

Thanks to two hurricanes and a thirsty world, the oil industry's largest firms are reporting the kind of profits this week that put whole national economies to shame.

Exxon Mobil Corp., the world's largest publicly traded oil corporation, set a new record Thursday with a $9.9 billion quarterly profit, a 75 percent jump from the same period last year. That broke the previous record set several hours earlier by Royal Dutch Shell, which made $9 billion. San Ramon's Chevron Corp. is due to report its profits today, and another blockbuster is all but assured.

Such a monumental tide of black ink is raising suspicions from Capitol Hill to the corner gas station that the oil giants are taking advantage of supply interruptions to squeeze their customers.

Sempra citicized for Power deal

Sempra energy's proposal to buy power from a new plant in Otay Mesa is coming under fire.

San Diego Gas & Electric says a watchdog group's criticism of the utility's plan to buy electricity from a proposed new power plant on Otay Mesa fails to properly calculate the benefits of the deal.

In a filing with the California Public Utilities Commission, the utility says the Office of Ratepayer Advocates seriously underestimated the value of buying power from the new plant.

SDG&E says more electricity will be needed as long-term contracts expire over the next decade – a point it says the ORA overlooks – and that the plant will save money by displacing electricity that would otherwise be bought from older, less efficient power plants.

The utility says that failing to buy power from the new plant, which has been permitted and partially built by Calpine Corp., could leave it without alternative sources of supply within the region.

Solar Tower plan knocked down

Revolutionary plans to get solar energy for Norhtern California have met a stormy ending.

A proposal to drape electricity-generating solar panels over the huge former dirigible hangar at NASA's Ames Research Center at Moffett Field won't be pursued because it isn't cost-effective, agency officials say.

Only one company responded to NASA-Ames' request for bids for the project by the Oct. 14 deadline, said Sandy Olliges, deputy director of safety, environmental and mission assurance at Ames.

That firm was Sempra Energy of San Diego. The Sempra proposal concluded the hangar scheme wouldn't generate enough electricity to be worth the investment.

However, Sempra has some nice Mexican LNG they'll sell you!

Fuel Prices Falling

While Californians are starting to see the threes become twos in their gas prices, some analysts think the trend may be short-lived.

Cheaper gasoline and oil showed up at service stations and futures markets Monday, but analysts warned that the relief probably would be temporary.

California's average gasoline price fell nearly 8 cents a gallon and the U.S. average dropped more than 12 cents in the last week, a government survey found Monday, as the U.S. benchmark grade of crude oil moved lower for the fifth session.

Analysts attributed the gasoline decline to higher imports, which were attracted by record prices, and to lower fuel demand, which always happens at this time of year but was accelerated by consumers' pump-price sticker shock. Oil prices slumped on relief that Hurricane Wilma bypassed the important Gulf of Mexico energy production region, traders said.

Although analysts predicted that gasoline could drop soon to prices not seen since last spring, they added that demand would rise again early next year and push pump prices up. Similarly, the oil price break will end as heavy winter use of petroleum products strains a market that is trying to recover from hurricanes Katrina and Rita.

Baja LNG site moving forward

While California stalls the approval process for Liquefied Natural Gas terminals north of the border, Mexico is getting a jump start on building the infrastructure to import LNG:

After spending four years putting together a globe-spanning deal amid a binational chorus of protest, Sempra Energy is well along in building the first liquefied natural gas terminal on North America's West Coast.

Since the first of the year, workers have graded 74 acres of undeveloped seaside land 50 miles south of the Mexico-U.S. border. Two 17-story storage tanks, each containing more steel than the Eiffel Tower does, are starting to rise on the picturesque Costa Azul plateau.

By January 2008, if all goes according to plan, Sempra's $1 billion Energía Costa Azul terminal will begin supplying Baja California and Southern California power plants with a new source of natural gas that could change the region's energy future.

Energy Crisis Trials Power Up

California appears to have lucked out with the weather this summer and avoided a major energy crisis...and that's good since we'll need all our power to follow the legal warfare from the last one!

In San Diego, jury selection is set to begin this week in the $23-billion antitrust case against Southern California Gas Co. and San Diego Gas & Electric Co., along with their parent company Sempra Energy. They're accused of squeezing natural gas supplies to California, contributing to wild price jumps during the state's infamous energy market meltdown of 2000-01.

In San Francisco, four former employees of Houston-based Reliant Energy Inc. will go on trial Oct. 31 on federal criminal charges that they turned off power plants in June 2000 to raise electricity prices.

Alaska drilling snuck into Senate Budget

Supporters of increasing domestic energy production scored with the Senate budget plan.

A key Senate committee on Wednesday advanced a measure that would achieve President Bush's long-sought goal of opening a portion of Alaska's Arctic National Wildlife Refuge to oil and gas drilling.

"This has been a long time coming," Sen. Pete V. Domenici (R-N.M.), chairman of the Senate Energy and Natural Resources Committee, said after the panel voted to include authorization of the energy exploration in a budget bill.

But the drilling initiative, which environmentalists strongly oppose, still could be thwarted by an issue unrelated to the decades-old dispute: a fight over federal spending cuts.

Drilling proponents have hoped the measure would finally become law because, by attaching it to the budget bill, it would be immune to the filibusters that have previously blocked energy exploration in the refuge.

LA Power Agency urges to conserve cash first

A novel idea for a government agency--try saving money before sticking it to your customers.

The Department of Water and Power should freeze tens of millions of dollars in spending as it considers whether a proposed 3.8 percent water rate hike is needed, a DWP commissioner said Tuesday.

The suggestion came as Mayor Antonio Villaraigosa's new Board of Water and Power commissioners continued to set an aggressive tone as they settle in as the citizen oversight body for the nation's largest municipal utility.

The panel started the day with an "urgent" call for more renewable energy as it reviewed the DWP's power system amid three recent blackouts that have roiled parts of the city. Then it moved to another focus area: financial accountability.

Commissioner Nick Patsaouras questioned DWP's budget of about $40 million for economic development at the same that it considers a water-rate hike that would generate about $25 million.

"How are you going to enhance the image of the district by raising the rates and then you're spending $40 million?" he said.

Energy Initiative going under radar

Californians will be asked whether to change the rules of the State's electricity markets in a few weeks...but there is confusion about what they're being asked to vote for in Proposition 80.

The consumer advocates who got Proposition 80 on the November special election ballot have a simple message for voters: Don't get fooled again.

They contend that the measure would prevent a repeat of the energy crisis of 2000-01 by removing the last vestiges of retail competition from the state's system for generating and selling electricity and by leaving traditional utilities such as Southern California Edison Co. as the dominant providers of power.

"California learned that deregulation in the electricity industry is a disaster, and Proposition 80 says never again," said Bob Finkelstein, executive director of the Utility Reform Network, referring to the state's failed 1996 deregulation law.

But opponents — mainly businesses, independent power producers and alternative-energy advocates — say there's nothing simple about the issue.

They contend that the initiative is rife with inconsistent language and legal contradictions that could create enough uncertainty in the state's electricity market to stall investment in badly needed power plants. Passage could destabilize California's still-fragile energy industry for years, the proposition's critics say, leaving the state susceptible to power shortages.

"This is going to create chaos in [the electricity market] because of uncertainty and litigation," said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies in Sacramento, who fears the measure could make it harder for the state to require utilities to buy more solar, wind and geothermal energy. "This is a backward-looking initiative that does not solve any problems we now face."

Leftovers from Landfill to Generation

Californians are desperately trying to find new sources of energy--and biomass may be the next wave.

Scrape your dinner plate into an airtight container of bacteria and what do you get?
In the wrong hands, a stinky mess. But with some engineering finesse, food scraps can be transformed into fuel for electricity.

That's the thinking behind a $100,000 pilot project at the Sacramento Municipal Utility District, given the catchy name "Leftovers to Lights."

SMUD has contracted with Ruihong Zhang, a professor of biological and agricultural engineering at the University of California, Davis, to study the feasibility of collecting food waste from restaurants and institutions in the Sacramento area and feeding the waste to bacteria that make methane gas.

Basically, it's a new twist on the old saw about turning trash to treasure.

"We can't call it 'waste' anymore," said Zhang. "It's a resource."

The food waste SMUD is eyeing is organic stuff that's otherwise buried as garbage.

Rising gas prices pinch poor

With an interruption in domestic supplies of Natural Gas, California's poorest are paying the greatest price:

Hurricane-related damage to Gulf Coast natural gas facilities will cost Inland Empire homeowners and businesses this winter, with heating prices expected to rise sharply.

The federal Energy Information Administration has predicted that home heating bills will increase by an average of 48 percent nationwide this year.

Locally, the cost to heat homes and businesses with natural gas could jump as much as 55 percent this winter, said Southern California Gas Company spokesman Peter Hidalgo.

Among consumers, the poor and the elderly on fixed incomes will be hardest hit, experts said.

"We've never had prices this high and it's never happened this quickly," said Mark Wolfe, executive director of the National Energy Assistance Directors' Association, which helps administer low-income heating programs.

"For low-income families, this will truly be a crisis."

Troubles at LADWP

Mayor Villaraigosa is investigating what has been going wrong at the Los Angeles Department of Water and Power after the third outage since Labour Day.

Mayor Antonio Villaraigosa called on the Board of Water and Power Commissioners on Thursday to seek an independent review of the city's electric system.

Also, Villaraigosa nominated Forescee Hogan-Rowles, an economic development official and former City Council candidate, to the panel that oversees the Department of Water and Power.

"The frequency and duration of power outages is a cause of great concern," Villaraigosa wrote in a letter to his commissioners.

A Sept. 12 blackout, which the DWP attributed to a worker's error, affected half the city. It was followed by two smaller outages, including one Tuesday that affected 1,000 customers downtown.

Some folks seem to think that outages are only part of the problem, though.

CEC Eyes LNG

The California Energy Commission is taking a renewed interest in Liquefied Natural Gas as a solution to the State's supply imbalances.

Californians may soon have something to distract them from high gas prices:
high utility bills.

State officials and a coalition of industry groups are trying to head off
this possibility with long term plans for bringing in large supplies of
liquefied natural gas (LNG) from overseas. While battles with
environmentalists have dominated the headlines about LNG, long-term price
volatility may prove to be a bigger risk.

Last Friday, representatives from the California Energy Commission presented
a draft energy report that outlined a potential two-part strategy for
keeping down Californians' energy bills: driving down the demand side with
conservation while pumping up the supply side with imported LNG. While CEC
officials have not specifically endorsed such a strategy, they say the
report shows the state how to escape the crunch caused by the combination of
growing demand and flat domestic supplies.

"Once you let LNG expand, you're going to see a significant amount of
cheaper gas coming into the continent," Jairam Gopal, a supervisor with the
CEC's Natural Gas Office told an audience at the meeting.

FERC to release Long Beach LNG study

The Federal Energy Regulatory Commission is opening up its heart and soul to reveal what it thinks about plans to plop an LNG terminal in the heart of Long Beach.

Beginning next month, the public will get an opportunity to support or oppose a controversial proposed liquefied natural gas terminal at the port that a federal study has deemed "environmentally acceptable."

Though the Federal Energy Regulatory Commission released a preliminary environmental impact report of the project last week, the Long Beach Board of Harbor Commissioners officially made the study available to the public at the regular Monday meeting.

The report can be downloaded from the Port of Long Beach Web site (www.polb.com) and viewed at the city clerk's office or any city library branch.

The board of commissioners will respond to the report after the public comment phase ends in December.

More Warnings of Higher Heating Bills

More costly wholesale natural gas may become the grinch that steals Christmas this year.

Households using natural gas face the steepest increases in the coming months. They are projected to spend an average of $350 more this winter than last year, a 48% increase, although price hikes will vary around the country. Natural gas expenditures are forecast to go up 34% in the West, where 6 out of 10 households rely on the fuel to heat their homes.

Users of heating oil, which are concentrated in the Northeast, will spend $378 more, for an increase of 32%. Nationally, price hikes for propane are expected to be similar to those for oil, and families who heat with electricity face an increase of $38, or 5%.

Hurricanes Katrina and Rita have boosted prices for oil, natural gas and other energy products, according to a report from the U.S. Energy Information Administration, the Energy Department's statistics arm, which provided new details of the projected energy toll from the storms.

The prediction sparked fresh anxiety in Congress, where members of both parties have been struggling to respond to skyrocketing energy costs.

The National Oceanic and Atmospheric Administration has predicted that this winter, defined as October through March in the energy world, will be 3.2% colder than last winter and 0.4% colder than the average winter.

Exxon cleanup to control pollution

Oil giant ExxonMobil is doing its part to control air pollution.

Exxon Mobil Corp. will spend an estimated $571 million for pollution controls at seven oil refineries, including its Torrance plant, in a settlement over alleged violations of clean air laws, the Justice Department and the Environmental Protection Agency said Tuesday.

The world's largest publicly traded oil company also will pay fines totaling $8.7 million and spend $9.7 million to retrofit city buses, restore coastal habitat in Louisiana and sponsor other environmental projects around the refineries. The settlement aims to reduce annual emissions of toxins that can cause respiratory problems and worsen cases of childhood asthma, the federal agencies said.


The refineries covered in two consent decrees filed in federal courts in Chicago and Lafayette, La., represent 11% of the nation's refining capacity.

Even if it is not entirely voluntary, the move is a step in the right direction.

Natural Gas prices on the rise

The basic economics of supply and demand are at work with natural gas prices, too...

Energy analysts estimate California consumers will pay "a near all-time high, nearly $16 billion in commodity costs," said Joe Desmond, chairman of the California Energy Commission.

For residential homes, utilities have warned that means a jump of between 45 percent and 70 percent over last year's monthly bills.

Gas prices tend to drop in the spring, but analysts are "seeing sustained high prices" given the damage caused by the twin hurricanes, Desmond said.

The hurricanes knocked out 80 percent of the daily production in the Gulf Coast, which usually produces about one-fourth of the nation's natural gas supply. California imports about 87 percent of its natural gas, although most is from Canada, the Rocky Mountain region and the Southwest.

Before the hurricanes, Pacific Gas and Electric Co. analysts were predicting a 20 percent increase in natural gas prices, said Jennifer Ramp, a spokeswoman for the largest Northern California utility. That estimate now is between 40 percent and 50 percent.

As the weather cools, "gas bills rise automatically because the amount of usage triples," Ramp said.

The combination of higher prices and use means an average PG&E residential customer will see a 71 percent increase in October's monthly gas bill, company officials said last week. A typical natural gas bill will average $42.10, officials said.

If only there were some kind of way to add to California's natural gas supplies...

Energy Prices Drive Inflation Fears

As energy prices go up, economists are fearful that so too will the cost of everything else:

Rising energy costs are causing Americans to pay more for such diverse products as cat litter and express delivery services, sparking concerns that protracted inflation might be returning as a primary threat to the U.S. economy for the first time in more than a decade.

Signs of higher inflation are beginning to multiply across the economy. Clorox Co. said this week that it would boost prices on almost half its products, on top of increases already announced for its food containers, trash bags and liquid bleach.

With tight supplies, focus turns to conservation

It's "That's 70's Show" time in the energy industry:

Fuel prices stuck at record highs have forced government officials to broach topics many have avoided for years: energy efficiency and conservation.

The very words used to conjure images of Jimmy Carter bundled in a sweater, imploring his oil-shocked nation to use less. Mindful of the one-term president's fate, politicians have focused ever since on increasing America's supply of energy, not cutting its use.

Hurricanes Katrina and Rita changed that, at least temporarily. With gasoline staying near $3 per gallon and natural gas prices expected to rise more than 70 percent this month, even President Bush has begun touting conservation and efficiency -- approaches his administration once treated with skepticism.

Estimates of how much electricity and fuel America can save vary, and many energy economists warn against putting too much faith in the forecasts.

Even those who preach efficiency's virtues doubt it can solve America's long-term energy problems alone. But it could be a key part of the solution, keeping energy demand from exploding while the country finds new sources of power or fuel.

Higher gas prices lead to smaller cars

Having a high MPG is now sexy...

In the land of $3-a-gallon gasoline, the Samurai warriors roll with pride.

Car buffs used to drool over such stats as horsepower, torque and top speed, but there's a new status symbol in the motoring world: miles per gallon.

Because automobiles live on petroleum-based products - gasoline powers their engines, oil keeps them running and is used to manufacture their belts and gaskets - the price of putting just about everything into a car gets incrementally more expensive when oil prices crest at $60 a barrel.

Faced with those hikes, one of the few costs that drivers can contain is the amount of gasoline they consume. In a car town like Los Angeles, ditching your ride's not an option for most, so motorists can either drive less or find a new way to get around.

NorCal homes to get Solar Panels

What the California Legislature failed to do to bring solar energy to people's homes, the private sector is accomplishing on its own.

Pardee Homes, which is in the midst of rallying support for its controversial housing project in North Livermore, unveiled detailed plans on Friday for what could be the largest solar-powered community in the United States.

All 2,450 homes would be equipped with about 48 solar panels each. The panels would provide enough energy to cut electricity bills by 50 to 70 percent, officials said during a press conference that critics dubbed a publicity stunt.

The extensive solar power capabilities of the community is a step in the direction of making new homes with no net increase in energy use, said Joe Desmond, chairman of the California Energy Commission. "This is not just a model for the community but also the state and the nation," Desmond said.

Hurricanes bring puch for drilling, refineries

With recent events in the Gulf Coast underscoring the fragility of the nation's energy infrastructure, some folks are looking for an opportunity to expand driling elsewhere:

Citing hurricane damage to the oil and gas industry in the Gulf of Mexico, key lawmakers are trying to relax a decades-old federal ban on new drilling off California and the Atlantic Seaboard and to encourage energy prospecting in the Rocky Mountains.

Congressional proposals also aim to waive some air pollution rules to encourage expansion of oil refineries and to authorize oil drilling beneath Alaska's Arctic National Wildlife Refuge.

Otherc claim that the hurricanes show the need to build more refining capacity as well:

It's a problem that's been building for 25 years, starting in the early 1980s, when overproduction and heavy losses forced smaller operators out of business. The trend accelerated in the 1990s, as federal and state regulators began mandating cleaner fuels and costly environmental upgrades. Then a wave of mega-mergers among oil companies led to more closures, as those firms saw consolidation as the shortest path to profits.

When hurricanes Katrina and Rita hit the Gulf Coast, they laid bare just how fragile the U.S. refining system had become. The storms knocked out fuel production and vital pipelines along the coast from Alabama to Texas and sent pump prices to record highs.

"It is unfortunate that it takes a hurricane to show us just how acute that problem is," said Rep. Joe L. Barton (R-Texas), chairman of the House Energy and Commerce Committee, whose proposed Gasoline for America's Security Act of 2005 passed through the committee last week without any hearings on its sweeping provisions.

They'd both be right...but they both leave off the need to build LNG terminals as well!!!