Friday, March 31, 2006

Sempra opts out of Coal Plants

NIMBYism has forced Sempra to abandon two electric generation plants in the Western US.

Sempra Energy said yesterday it was ending its effort to build two coal-fired electricity-generating plants in the West, projects that had prompted stiff opposition from nearby residents and environmental groups.

San Diego-based Sempra said that rather than build the plants in northern Nevada and southern Idaho, it will seek buyers for the development work it has done on the projects over the past two years.

Thursday, March 23, 2006

Municipal Utilities Responsible for Profiteering?

The LA Times Michael Hiltzik writes that municipal utilities should pay up the dough they made when electricity prices soared in California during the energy crisis.

There's an ancient principle to the effect that even if you're the unwitting recipient of an undeserved bonanza — say a bank mistakenly funnels a million bucks of someone else's money into your ATM account — you can't keep the money.

Apparently this notion hasn't registered at the Los Angeles Department of Water and Power. The DWP has so far refused to concede that it should return the estimated $250-million windfall it drained from the pocketbooks of California ratepayers during the energy crisis in 2000 and 2001. That's when sleazy maneuvers by the likes of Enron drove electricity prices up, and innocent municipal generators like DWP pocketed the windfall like everybody else who sold power.

Did I say innocent? A fair amount of evidence suggests that DWP and other munies knowingly joined in this jolly rip-off — all the more reason that they should cough up. (DWP, for its part, has denied that allegation as "sheer speculation.") By keeping the money, of course, the municipal utilities do a favor for their local customers, but only at the expense of everybody else in the state.

Tuesday, March 21, 2006

Governor backs off of L.B. LNG

After stating clearly that California needs new sources of natural gas when supporting the Cabrillo Port LNG terminal project, Governor Schwarzenegger is thinking twice before putting a liquefied natural gas facility in the heart of Long Beach.

California needs liquefied natural gas, Gov. Arnold Schwarzenegger said Monday, but study and public input are needed before deciding on a location for a receiving terminal in the state.

In an interview with the Press-Telegram, Schwarzenegger was asked about a proposal for a $450 million LNG terminal at the Port of Long Beach that would receive tankers filled with a supercooled form of gas. The proposal by Sound Energy Solutions, a subsidiary of Mitsubishi Corp. and ConocoPhillips, is the only one in the state so far that calls for an on-shore facility.

Schwarzenegger said further study, along with local public input, should determine where such a facility should be built.

"All of that I think would determine should it be in San Diego, should it be in Long Beach, should it be offshore, maybe in Thousand Oaks up there," the Republican governor said. "So I'm not the one that is going to make that decision. I think that in the end we need to see the reports."

Friday, March 17, 2006

LADWP sued over price gouging

Apparently, the Los Angeles Department of Water and Power is the new "ENRON"--price gouging the independently-owned utilities during California's 2000-01 power crisis.

The state's two biggest utilities sued the Los Angeles Department of Water and Power and 18 other government entities Thursday seeking to collect hundreds of millions of dollars in alleged overcharges on electricity sold during the California energy crisis.

Southern California Edison Co. and Pacific Gas & Electric, joined by the California Electricity Oversight Board, filed the lawsuit in U.S. District Court in Sacramento — a new venue for a refund dispute that has simmered since the state's power market meltdown in 2000-01.

The lawsuit alleges that the government power providers violated contracts by selling electricity at rates that the Federal Energy Regulatory Commission deemed "unjust, unreasonable and unlawful."

Edison and PG&E are seeking an unspecified amount in refunds for the utilities and their customers. In a statement Thursday, Edison said the claims could amount to as much as $500 million, although it was unclear how much of that ratepayers would get if the utilities were to prevail in court.

Thursday, March 16, 2006

Hermosa Beach to Fight Drilling in South Bay

Just as an Australian Company is proposing to build an LNG terminal in Los Angeles' South Bay, the City of Hermosa Beach has decided it will fight a lawsuit over an oil-drilling project they consented to years ago.

Hermosa Beach on Monday filed a petition with the California Supreme Court to fight Macpherson Oil Co.'s $500 million breach-of-contract claim against the city in the wake of an appellate court's August ruling favoring Macpherson. The city's action seeks to stop Macpherson's lawsuit from going to trial seeking damages for being blocked from oil drilling in Hermosa Beach. A Macpherson attorney doubted the state's highest court would accept the city's petition.

Wednesday, March 15, 2006

Sempra plans to Expand Mexico LNG

Sempra Energy is not even finished building its LNG receiving terminal in Mexico, but they want to expand it already.

Sempra Energy has completed just 30 percent of the liquefied natural gas terminal it is building near Ensenada in Baja California, but it's already considering expansion.

The San Diego company said it has been approached by customers whose demand would justify a bigger plant, leading the company to open a bidding process that could more than double the terminal's processing capability.

Another LNG port proposed in Santa Monica Bay

Despite the political firestorms surrounding existing proposals to build Liquefied Natural Gas facilities in California (it seem's they're all we're talking about lately!), Australian company Woodside decided they want to plop their property smack in the middle of L.A.'s South Bay.

The project site — in the 3,000-foot-deep Santa Monica Basin, about 22 miles from both Point Dume in Malibu and the northern tip of Santa Catalina Island — does not interfere with shipping lanes, ferry routes, nature preserves or military exercise zones, Cutler said. The undersea pipeline would come ashore at Los Angeles International Airport.

Woodside expects to file applications with state and federal regulatory agencies in the next 60 days. If it gets the needed approvals, Woodside could begin importing an average of 800 million cubic feet a day of natural gas by 2011, providing enough fuel to supply as much as 15% of the state's market for home heating, heavy industry and electricity generation, Cutler said.

The plan is similar to a proposal by another Australian company, BHP Billiton, to put a floating liquefied natural gas terminal in the ocean 21 miles off Port Hueneme in Ventura County. However, the BHP plan would require a permanent offshore regasification facility, where the super-cooled liquid is turned back into gas.

Environmentalists are fighting the BHP proposal, questioning its safety and whether there will be enough demand for the gas.

But if California eventually decides to import liquefied natural gas, then the Woodside proposal might make sense, said Susan Jordan of the California Coastal Protection Network in Santa Barbara.

"If we import, the next technology should be the safest and carry the least environmental footprint," Jordan said.

Other proposals include building land-based plants in Long Beach and northern Mexico and retrofitting a mothballed oil platform off of Oxnard for a liquefied natural gas facility.

Although the LNG industry has had a generally strong safety record, some officials worry about putting a potentially dangerous regasification plant in an urban setting such as Long Beach.

Tuesday, March 14, 2006

Cabrillo Port poses no threat to Land

The proposed offshore liquefied natural gas terminal in Ventura County has one advantage Long Beach's never will... Being offshore, it poses no threat to land, accourding to a recent report.

A liquefied natural gas terminal off Ventura County's shore would not pose a danger to Oxnard or other communities, but an accident or attack could reach into fishing areas and shipping lanes, according to a report released Monday by the California State Lands Commission.

The 2,528-page environmental impact study asserts the chance of accidents would be small because of the project's many safety features. But in a worst-case situation — like an intentional attack — a vapor fire could affect an area about 7.3 miles away. That would still be about 6.6 miles from the nearest shore. Boats in the shipping lane would not face a risk for about 30 minutes, meaning there could be time for a warning.

Election raises tembers over Long Beach LNG terminal

Negotiations over a proposed liquefied natural gas terminal in the heart of Long Beach are getting mired in the City's elections, just four weeks away.

Negotiations have been going on for nine months between Long Beach City Hall and the company that wants to build a controversial liquefied natural gas facility. But "negotiations" is an overstatement.

Nothing has happened in the three months since the company, Sound Energy Solutions, made a specific proposal. SES offered $16.3 million up front and $12.6 in annual fees and taxes, plus $3 million in pipeline revenue in exchange for building the facility at the Port of Long Beach. The city offered no counterproposal, then last week abruptly threatened to end the talks for lack of progress, just four weeks before the city elections.

Maybe the timing is just a coincidence, though the company doesn't think so. One of the candidates for mayor, Frank Colonna, has made the LNG proposal one of his campaign issues, and putting the LNG negotiations on the council agenda will give him a chance to make a little hay Tuesday night.

That's small advantage, since three other mayoral candidates, Bob Foster, Doug Drummond and John Stolpe, also oppose the LNG project. In any case, Colonna denies he had anything to do with City Hall's latest demand.

City Manager Jerry Miller says the timing of the city's demand has less to do with politics than with SES' advertising campaign promoting the benefits of an LNG terminal. If persuasive, he said, the campaign could lessen the city's leverage in negotiations.

Sunday, March 12, 2006

Economic Benefits Pale in comparison to Profits of Long Beach LNG

While Sound Energy is touting up to $20-30 million in public economic benefits to their proposed Liquefied Natural Gas terminal in the heart of Long Beach, those numbers don't shake a stick at the profits the company stands to gain.

SES stands to gross $3 billion to $4 billion a year, and earn net profits of $90 million a year once the terminal is in operation (a figure confirmed by Magaddino’s study, which estimates $8 million a year in state income tax).

“It is certainly true that the project will have a positive economic impact upon the region,” Garner says. “However, clearly SES must fairly compensate the city and its residents for locating this controversial and potentially risky, but highly profitable, project within the city’s borders.

"Based upon its proposal, SES has evidently not fully embraced the concept of partnership with the city and its residents.”

With potential profits like that, you'd have to wonder why the company does not pony up the money for the City to build the necessary infrastructure!

Monday, March 06, 2006

Long Beach Study: LNG good for CA

An economic impacts study of the proposed Long Boeach liquefied natural gas terminal reveals positive impacts for California...with one caveat.

The operator of a proposed liquefied natural gas terminal in the Port of Long Beach unveiled an economic impact analysis Thursday that showed the facility, if built, would increase the West's supply of natural gas by nearly 11 percent, decrease consumer prices by more than 7 percent and create 223 new high-paying jobs.

But rhetoric surrounding the proposal has flared over the economic impact the LNG supply depot would have on ailing city coffers.

The economic impact report unveiled Thursday was prepared by Cal State Long Beach economics department chairman Joseph Magaddino for Sound Energy Solutions, a Mitsubishi Corp. and ConocoPhillips subsidiary that is proposing the terminal on the port's Pier T. The report concluded that the terminal would also generate $10.3 million in tax revenues to the city, and nearly $8 million annually in state income taxes.

Construction impacts would be even higher, with 400 annual jobs created and a $100 million payroll while it was being built.

The problem with this analysis, though, is that it could apply to any LNG terminal, and does nothing to bolster the case for Long Beach.

Assemblyman pushes Hybrid Tax Credit

All but admitting that buying a hybrid makes no economic sense, a California Assemblyman is proposing yet another government subsidy of the vehicles.

Buying a hybrid vehicle will save drivers money on gas, but they're so much more expensive than a regular vehicle that economists say most will not save their owners money over the life of the car.

Lodi Assemblyman Alan Nakanishi wants to fix that by giving buyers a one-time income tax break of up to $3,000 as a way to stoke hybrid sales and get more of the cleaner-running vehicles on California roads.

"The tax credit will make it easier for average citizens - those who need it most - to afford a highly fuel-efficient vehicle," Nakanishi said. "Asthma has increased a lot in the Valley, and we really need to clean that up."

Thursday, March 02, 2006

Long Beach Candidates Agree: No LNG!

With City elections on the horizon, the proposed development of a liquefied natural gas terminal in the heart of Long Beach is becoming a major campaign issue.

Westside Long Beach residents were promised a more prominent role in Long Beach politics Wednesday by the five mayoral candidates, in a quiet forum that found them less fiery than in past debates, but still forceful in their opinions.

Questions posed at the Villages at Cabrillo, a residential community for homeless veterans, followed the trend of other debates. As mayor, how would candidates approach issues like port pollution, public safety, airport terminal expansion and budget and environmental issues?

On the big issues, former Southern California Edison President Bob Foster, City Councilman Frank Colonna, Police Cpl. John Stolpe and former Councilman Doug Drummond continue to agree: No liquefied natural gas terminal. More police officers and after-school programs. More community involvement.