FERC Approves 3 LNG Facilities

A Warm Winter and yesterday's FERC approval of three new LNG facilities seems to be doing wonders for Natural Gas supplies in the Eastern U.S.

It is, unfortunately for consumers, a situation that may not last. Energy traders are still pricing futures contracts at high levels, and natural gas producers are planning for big increases in U.S. demand over the coming years. Yesterday, the Federal Energy Regulatory Commission approved proposals to build three new terminals and expand two others that together would triple the nation's capacity to import liquefied natural gas (LNG). One of those projects is an expansion of the LNG terminal at Cove Point in Calvert County, Md.

Now if only they could do something for natural gas supplies in California!

Cali Gas Prices Slip Sliding

You may not have noticed it unless you had to fill up your car lately, but gas prices are coming down in California.

Californians are experiencing a rare reprieve at the gas pump, with the state's average price for a gallon of regular dropping 12 cents in the past month to hit $3.26 Tuesday.

But that's still far above what the rest of the country pays, with the national average at $2.90, according to the AAA of Northern California auto club. And it's nearly a dollar more than California drivers spent this time last year as they geared up for their summer vacations.

The state's average set an all-time record of $3.38 in mid-May and then started drifting down as refineries increased gasoline production for Memorial Day. San Francisco's prices dropped about 8 cents in the past month, hitting $3.28 per gallon Tuesday. San Jose's tumbled 15 cents, to $3.22, while Oakland's fell 12 cents to $3.22.

Ethanol Boom bound for California

Although ethanol used to only be considered in the context of Presidential campaigns (Iowa grows corn), the alt-fuel is getting a second look in the Golden State.

California has lagged in the national ethanol boom, but that is changing in a big way. If cars and trucks that can run largely on ethanol get a toehold in the state, advocates say, the sky's the limit for the market of the fuel additive.

"Ethanol production looks really, really bright in California,'' said Tom Koehler, vice president of Fresno-based Pacific Ethanol Inc., a publicly traded company that's nearing completion on a 35 million-gallon-a-year corn-based ethanol plant in Madera in the Central Valley.

The new plant will more than double the state's existing output. Three plants with a capacity of 33.5 million gallons a year are producing ethanol from corn or from food and beverage waste material, but that's a drop in the bucket of the 900 million gallons used in California annually, according to state Energy Commission data.

Foster win in Long Beach Dooming for LNG

Former Edison executive Bob Foster was elected Mayor of Long Beach Tuesday, which seems bad news for plans to build a liquefied natural gas terminal in the heart of that City.

Michael Peevey, CA Public Utilities Commissioner: "Bob Foster's election means there will be no LNG in Long Beach, which is a good thing."

Two more LNG proposals for Ventura County

Anyone who says that there is not market demand for liquefied natural gas in California should probably take a class in economics--those who would supply it certainly think there's enough need to keep proposing new facilities!

Two more companies are close to filing applications with state and federal officials for liquefied natural gas facilities off the Los Angeles and Ventura County coasts.

Australia-based Woodside Natural Gas Inc. will submit an application within two months with the California State Lands Commission and the U.S. Coast Guard for a deep-water port license, company officials said recently.

NorthernStar Natural Gas expects to file a similar application within a few weeks, officials with the Houston-based company said.

BHP Billiton, also of Australia, is furthest along in the regulatory process for what could be Southern California's first liquefied natural gas facility. The mining firm hopes to build a floating gas port 13.8 miles off the Oxnard coast. Gas would be piped ashore to the Reliant Energy plant near Ormond Beach. Another pipeline would carry the gas to a Southern California Gas Co. facility in Somis.

Long Beach LNG on the Brink

A proposal by Mitsubishi and ConocoPhillips to build a liquefied natural gas terminal in the heart of Long Beach is teetering on the edge as its deadline is set to expire just days after City elections this week.

The developer of a proposed $700-million liquefied natural gas terminal at the Port of Long Beach is pushing to extend its contract to retain exclusive rights to build the processing plant at the harbor.

An agreement granting Sound Energy Solutions, a partnership of Mitsubishi and ConocoPhillips, the rights to build the terminal on a 25-acre harbor site is set to expire Thursday. But officials of the energy company and the port are downplaying the deadline, saying a final decision on the terminal will come after an environmental review of the project is completed this summer.

"We still have the right to say no" to the project, said Art Wong, spokesman for the port.

The board of harbor commissioners is scheduled to meet in closed session today to consider a request from the energy company to extend its contract. Under the agreement, the firm must continue to pay the harbor an annual fee of $17,425 per acre to retain sole claim to the designated project site.

Tom Elias has Change of Heart on LNG

Columnist Tom Elias, a longtime opponent of importing Liquefied Natural Gas into California seems to be coming around.

Federal officials are now in the midst of their legally required 60-day periods for soliciting public comments on permits for emissions of both air pollutants and wastewater from a huge new coastal project called the Cabrillo Deepwater Port.

This means unless a lone consumer lawsuit against it succeeds, the Australian energy giant BHP Billiton Ltd. will soon begin building California's first liquefied natural gas import terminal 14 miles off the coast of Ventura County -- the first LNG terminal on America's West Coast.

And yet, recent testimony from the president of the state Public Utilities Commission indicates regulators don't have any idea whether it's needed.

This project could only get as far as it has because every regulating authority involved says there's a need for the gas it would provide. Some of the same regulators also have said they believe LNG will bring gas prices down despite costs of more than $5 billion to build each terminal and the massive ships to serve it.