Ribbon-Cutting Time For LNG Facility

Donald Felsinger and Mexican President Felipe Calderon officially dedicated Cosa Azul yesterday.

Given that it's Friday before Labor Day weekend and that I'm busy attending to my new Sarah Palin obsession (ANWR!!!!!), I just don't feel like blogging about it too much!

You can read all about it in the San Diego Tribune.

Have a great Labor Day Weekend.

SCE Catching Heat Over Power Lines

Southern California Edison is being roundly criticized by residents in suburban Los Angeles for its above-ground subtransmission lines that are, in the words of one resident, Just plain "ugly."

The Santa Clarita Signal reports that a series of 150 foot black hydroelectric towers are now "zippered across Santa Clarita's northern perimeter" of Valencia. Locals are accusing the PUC of being complicit in the deal to erect the towers and are demanding that they be taken down.

The project EIR called for Edison to mitigate the visual impact by constructing the towers with tubular steel poles, but the utility deemed that not feasible and the PUC ok'd the steel lattice-work design.

Not far away in Thousand Oaks, CA, residents turned out for a public meeting over a proposed substation in L.A. suburb and demanded that Edison bury the subtransmission lines. Edison not surprisingly played the "outage" card and argued that it can restore service much more quickly with overhead lines because they are more accessible.

Alternative Energy Tax Credits Hanging In The Balance

Federal tax incentives for wind, solar and other forms of alternative energy are set to expire at the end of the calendar year unless Congress votes to reauthorize them.

Democrats are demanding the $1.7 billion in incentives be revenue-neutral and Republicans want offshore drilling to qualify for the same treatment as wind and solar. Not surprisingly, the issue is at a stalemate.

Published reports indicate that the tax incentives can reduce a company's operating costs by 30%, so projects that are already in the works are being completed at a feverish pace in order to be online by December 31 and qualify for the tax break. Planned projects are being shelved, however, and financing is drying up as well.

This isn't the first time that alternative energy tax credits have been on the block. The last time Congress allowed wind energy incentives to expire, the volume of wind energy projects dropped by 93%.

Industry trade groups have indicated that no tax breaks mean far fewer projects and that will result in as many as 115,000 jobs lost as early as 2009.

Look for this to heat up after the pollitical nominating Conventions conclude next week.

Wind, solar projects race to finish before tax credit expires [USA Today]

Bashing Pelosi Misses the Point

Rupert Murdoch officially put his stamp on the Wall Street Journal with a silly editorial against Nancy Pelosi's verbal gaffe on Meet the Press. In discussing energy policy, Pelosi referred to natural gas as an alternative to fossile fuels.

The Journal pounced, first in a blog post, then again today in an editorial, lampooning Pelosi for ostensbily not knowing that natural gas is a fossil fuel.

I'm fairly certain that, if pressed, the Speaker would acknowldege that natural gas is created from organic, carbon-based material and is, in fact, a fossil fuel. Clearly her intention was to distinguish natural gas from other fossil fuels that burn far less cleanly.

Let's move on, because this partisan hack job obscures the real issue underlying Pelosi's poistion: even for natural gas, you've gotta drill. So whether you're T. Boone Pickens or Nancy Pelosi, you cannot oppose drilling and embrace natural gas.

It's time to recognize that technology now allows us to drill more responsibly and with far less environmental impact than we could a gneration ago. Up to this point, we have taken baby steps in embracing this truism, but later today, we will most likely take a quantam leap!

The Board of Supervisors in Santa Barbara is expected to vote today to approve offshore oil drillng. While it is a largely symbolic vote, for jurisdictional reasons, it represents a sea change in attitudes toward drilling. If Santa Barbara of all places is ok with it, then it's time to stop the bickering and have a serious discussion about when, where and how to drill.

A Carbon Education [Wall Street Journal]

Where Have You Gone, SB 411?

I hate giving props to the Mainstream Media when they "editorialize" (i.e., preach), but the Los Angeles Times impressively smacks Karen Bass and others today over SB 411.

The Times professes to be "mystified" by the lack of urgency demonstrated by the Assembly Speaker when it comes to SB 411, which would legislate California's goal of generating 20% of its energy from renewable sources by 2010.

In its editorial, the Times notes that thebill enjoys the support of the Governor, Don Perata, and most Democrats in Sacramento. Furthermore, it is the key to achieving the state's overall goal of cutting greenhouse gas emissions to 1990 levels by 2020. But oppostion from utilities and others is rooted in the legislation's operational requirements and in the fear that it potentially cedes a competitive advantage to certain companies.

The guys at the Times are absoultely right in their not so subtle reminder that Prop 7 hangs over this debate like the Sword of Damocles and that, if detractors dislike SB 411, they are going to love Prop 7. (Sarcasm intended.)

Sacramento stalls on renewable energy [Los Angeles Times]

Wireless Electicity Transmission

There was a time when my grandmother wouldn't stand near the microwave or cross the path of the TV remote because she was convinced both emitted harmful-- actually potentially lethal-- raditaion, rays, energy, whatever... I can only imagine how much this would freak her out:

Intel is inching closer to commercially viable wireless electricity transfer. Using technology refined at MIT, the company demonstrated its ability to power a 60 watt light bulb from three feet away, with 75% energy efficiency. MIT researchers had illiumimated a bulb from 7 feet away at 40% efficiency.

The San Francisco Chronicle has the AP write up and describes the basic idea behind the technology thusly:

"Wireless transmission of electricity makes use of some basic physics. Electric coils that resonate at the same frequency can transmit energy to each other at a distance."

While the concept is now proven, its commercially viable implementation is still pretty far off. However, once its ready, homes and businesses will be able to install a transmitter and receivers similar to WiFi that will allow appliances to constantly charge.

Intel demonstrates wireless power charging [AP via San Francisco Chronicle]

You've Got Mail!

Back from a week in the woods and sifting through the inbox:

Google is investing big in Geothermal.

PG&E is catching lots and lots of flack for billing customers it doesn't serve.

The "hybrid cars vs. visually impaired pedestrians" issue is back in the news.

A Sacramento-based non-profit says meeting the 2020 goal/requirement for alternative energy use is worth $60 billion and 200,000 jobs to the state of California.

Fresno is moving toward a 1,600 MW nuclear plant.

The folks at the SSJID continue to find ways to make, save and invest lots of money on their constiutents' behalf.

The flip-flopping on offshore drilling continues more furiously that the fish I didn't catch this week!

It's good to be home!

Outta Here...

Heading to the wood for a few days of R&R... more posts next week!

SDG&E Rates Going Up

A 9,000 page application and almost two years later, SDG&E has gotten the go ahead to raise rates by 7%.

Most of that, 4.3% is part of a general rate case approved by the PUC, and the balance, which was approved by FERC, seeks to offset increased transmisstion costs.

According to the Union Tribune:

"The settlement, which was approved by the commission two weeks ago, enables SDG&E to increase its gas and electric rates to generate an additional $136.3 million in 2008. The new rates are retroactive to Jan. 1. SDG&E has been allowed to collect an approximate increase for nearly eight months and hold the proceeds in a separate account pending the PUC decision. The settlement also provides for an annual increase that allows SDG&E to make successive annual base-rate hikes of $41 million in 2009; an additional $44 million in 2010; and $44 million more in 2011.

That means the utility will make adjustments to its base rates for residential, commercial and industrial customers every year."

SDG&E raising its rates Sept. 1 [San Diego Union Tribune]

Taking the Good With the Bad

Two companies, two different directions. Calpine is giving every indication that the formerly bankrupt power producer is back and getting stronger. Pacific Ethanol, the erstwhile media darling, isn't having such an easy go of it.

The Los Angeles Times contrasts the two companies' fortunes in separate bulletins:

Calpine Corp., the U.S. power producer that exited bankruptcy protection in January, reported a profit in the second quarter after a year-earlier loss from reorganization costs. Net income was $197 million, or 41 cents a share, compared with a loss of $500 million, or $1.04, San Jose-based Calpine said Monday. Revenue rose 37% to $2.83 billion.

The company also named Jack Fusco chief executive.Calpine said Fusco's appointment was effective Sunday. He replaces Robert May, who had been CEO since December 2005 and had said he would retire once a successor was in place. Fusco previously was CEO of Texas Genco Inc.Calpine is the largest U.S. producer of electricity fueled by natural gas.

The company was driven into bankruptcy in December 2005 after natural gas costs surged and a power glut held down electricity prices. Since then, Calpine has doubled forward sales that lock in profit margins.Shares of Calpine rose 61 cents, or 3.8%, to $16.60 after the earnings news."

*********************************************************************************

"Corn costs hurt Pacific EthanolPacific Ethanol Inc., the alternative fuel producer partly owned by Microsoft Corp. co-founder Bill Gates, reported a second-quarter loss of $8.33 million on higher corn costs. The loss was 23 cents a share, compared with net income of $2.16 million, or 3 cents, a year earlier, Sacramento-based Pacific Ethanol said. Sales rose 74% to $198 million.

Higher prices for ethanol couldn't match the rise in corn costs during the quarter. Corn futures on the Chicago Board of Trade rose to a record $7.99 a bushel on June 27 amid speculation that Midwest flooding would damage crops. A bushel of corn produces about 2.7 gallons of ethanol.

"Ethanol prices did not rise enough to offset the rise in corn prices," said Ron Oster, an analyst at Broadpoint Capital Inc. in Albany, N.Y.Shares of Pacific Ethanol fell 32 cents to $2.05 after the earnings news."

Another Offshore Energy Controversy?

While pro and con forces dig in over the offshore drilling debate, new talk of alternative energy generation offshore could spark an entirely new public debate.

The prospect of wind and wave energy technology projects are being tossed around with greater frequency and that has the potential to generate concern and opposition from interests ranging from coastal residents to environmentalists to fishermen.

Already PG&E is moving ahead with a 40 MW wave energy project off of Fort Bragg, but a company project manager admits that wave energy technology is about as far along the development curve as wind power was 25 years ago. Still, the Electric Power Research Institute estimates that wave power could ultimately provide up to 15% of California's energy needs.

Floating wind turbines have been a source of controversy in other parts of the country and now an idea to park them off of Cape Mendecino promises a lively debate.

Regardless of the technology, any offshore project is going to require a transmission line to hook into the grid onshore and that will involve the full cadre of regulatory agencies that slugged it out over one of our favorite topics, the proposed offshore LNG terminals that were ultimately killed.

Just as with LNG, the parochial interests of local residents concerned over the aesthetics of any offshore project will find a voice through a host of legitimate protest channels so, from a process standpoint, these projects should be something of a donnybrook.

Proposal to harness wind power off Mendocino coast worries fishing industry [Sacramento Bee]

Number of Geothermal Projects Growing

The Geothermal Energy Asssociation is touting a 20% increase in the number of geothermal energy projects since January.

A survey released by the trade group identified 103 projects underway in Alaska, Arizona, California, Colorado, Florida, Hawaii, Idaho, New Mexico, Nevada, Oregon, Utah, Washington, and Wyoming. When developed, these projects could provide nearly 4,000 MW of new electric power, enough electricity to meet the needs of roughly 4 million homes.

Current geothermal capacity on-line is 2,957 MW according to the report, and with the new additions geothermal power could reach nearly 7,000 MW. This would meet the household electricity needs of the cities of Los Angeles, Phoenix, San Francisco and Seattle combined.

The number of geothermal projects has been steadily increasing over the past two years, the report points out. Geothermal power production is headed to meet or exceed recent projections.

California currently as 21 geothermal projects producing 927.6 MW.

Smart Meter Rollout

PG&E's Smart Meter program rollout is moving forward. The $1.7 billion effort to install new meters that provide consumers with real-time data about their energy usage, in theory will prompt customers to change their usage habits and conserve electricity.

The cost of the meters themselves is about $450 million and approximately 5 million customers will get them over a three to four year period.

According to Dow Jones:

"In addition, utilities can ostensibly have more control over power flows and more insight into where there are problems across their transmission and distribution networks.

Utilities view the installation of smart metering as one of the steps on the road to a more automated power grid that can deliver power more efficiently to customers..."

A recent sutdy by the Electric Power Research Institute and the Edison Electric Institute estimates that the meters could reduce electric consumption by 7% to 11%.

PG&E Looks To Landis + Gyr, GE For $1.7 Billion Meter Program [Dow Jones via CNNMoney.com]

BP Solar/Shea Homes Team Up For Free Solar

BP Solar has inked a deal with Shea Homes, a massive California homebuilder and construction company, to be the exclusive provider of solar technolgy for Shea's "Trilogy" division which caters to retirees.

Each home will come equipped with 3KW of generation capacity which will remove 18 tons of CO2 emissions over a ten year period. But the companies are not pushing solar just for its environmental appeal. A joint press release notes:

"The BP Solar Home Solutions(R) systems are estimated to reduce the homes' electric bills by up to 60% per home, in addition to the approximately 30% energy usage reduction Trilogy homes already achieve with the Shea Green Certified(TM) standards for home building. Each home will be equipped with a 3-kilowatt solar power system, which helps provide security against electric rate increases, allowing consumers to hedge their future risks in the volatile energy markets."

Trilogy By Shea Homes Teams With BP Solar To Offer Free Solar Power On New Homes [Marketwatch.com]

TIREsome Campaign Rhetoric

By now you've heard about Barack Obama's infamous "tire pressure comments." He made the claim that if everyone would keep their tires properly inflated and get tune-ups, we would be able to elminate our reliance on foregin oil and we certainly wouldn't need to drill.

John McCain pounced and started handing out tire guages with the words "Obama Energy Policy" on them. Clever.

But we've got Barack's back on this one. Was he guilty of a little hyperbole? Absolutely. (In a political campaign-- go figure.) Is his point valid? Absolutley.

Accordnig to an analysis in the San Francisco Chronicle that pulls statistics from the federal government's fuel economy Web site, we can increase fuel efficiency by as much as 3.3 percent.

Will that be the ticket to oil self-reliance? I seriously doubt it, but in California, where we are conditioned to do the little things like turning off light switches when you leave the room and taking shorter showers to save water, something so simple as inflating your tires should be a no-brainer.

So, here's hoping Obama's exaggeration doesn't obscure the real point, which is that we can all do our part to rein in gas consumption.

We have to give credit where credit is due though, the tire guage thing was kind of funny, but it has run its course. Time to move on!

Tire gauge pumping up campaign rhetoric [San Francisco Chronicle]

Democrats Have An Oil Problem

The Chicago Tribune's political blog, "The Swamp" takes an in-depth look at Nancy Pelosi's tortured logic behind her scuttling of a vote on offshore drilling, and the Wall Street Jounral editorializes on Barack Obama's flip-flop on the issue (apparently he supports offshore drilling now-- as long as he can blame any bill he signs on Congress).

Stratosphericaly high gas prices, a de facto recession, and a really, really, really unpopular Republican president should all put the offshore oil drilling issue right in the Democrats' wheelhouse. But they are flailing on this one, while McCain and the Republicans stay relentlessly on message.

Here we go again...

Pelosi's oil slick [The Swamp]

Obama's Drill Bit [Wall Street Journal]

The Times They Are A 'Changin...

"...[I]t's a little hypocritical for California to continue consuming more than a billion gallons of gasoline a month while placing potentially large pools of oil off-limits to exploration, thereby exporting those negative impacts to some other locale."

So says Dan Walters in the conclusion of his column in today's Sacramento Bee. This courageous statement from a respected columnist like Walters seems to signal a change in the popular attitude toward offshore drilling.

Walters cites a litany of public opinion research that makes a case for softening opposition to calls for more domestic oil production along the California coast:

• "...a new statewide poll by the Public Policy Institute of California, which found that a slim majority now supports offshore oil, up sharply from the 39 percent support measured in 2003 in the first PPIC poll on the issue."

• "To make the new political equation on energy even more interesting, support for nuclear energy appears to be rising, not quite to the halfway mark yet, but definitely higher than in the past. Opposition to new nuclear reactors had been another hallmark of California's energy politics, but it now appears to be fading."

I don't think we're in Kansas anymore, Toto...

If all of this isn't surprising enough, prepare to get bowled over by the editorial in today's Los Angeles Times that....

Are you ready?

Wait for it...

Wait for it...

Defends Exxon and criticizes the idea of a windfall profits tax.

Yeah, I thought I was hallucinating too, but there it was, right on the screen. The last two paragraphs sum it up:

"We hate spending $60 on a fill-up as much as the next person, but we don't think Exxon or its outsized profits should be the impetus for bad policy. As we've said before, it's a bad idea to pile more taxes onto oil companies for supposedly excessive profits. Exxon already faces a stiff tax bill -- nearly 50% of its taxable income went to the government in the most recent quarter. Increasing the price of success could discourage the company from making high-risk, high-reward bets on new supplies and technologies, which is the opposite of what the country needs.

Ultimately, the source of Exxon's profits is the high price of oil. That's also the force driving down the demand for gasoline and aiding the development of alternative sources of energy -- the only real, long-term solution to America's dependence on foreign oil. So in a way, we should be thankful for another banner quarter by the world's largest publicly traded oil company. Even if it hurts."

Today is August 1, not April 1, right?

Dan Walters: Maybe offshore drilling isn't so bad after all [Sacramento Bee]

Give Exxon a break [Los Angeles Times]