Continuing focus on environmental pollution tends to obscure a more basic question as to California’s real need for natural gas, and therefore the need for imported liquefied natural gas.
By Ward Lauren / Special to The Malibu Times
The Environmental Protection Agency has responded to the Committee on Oversight and Government Reform’s request regarding its analysis that led the federal agency to reverse its decision in requiring stricter air quality controls for the Cabrillo Port liquefied natural gas facility proposed for the Malibu/Oxnard coastline.
However, it is not known what the response is as neither the offices of Rep. Henry Waxman, chair of the oversight committee, nor EPA administrator Stephen L. Johnson, to whom the letter was addressed, would give details of the EPA’s response at this time.
Molly Gulland, of the Oversight Committee Press Office, said that due to an earlier scheduled environmental hearing, the committee had not had time to review the EPA document. EPA Public Affairs spokesman Dave Ryan acknowledged that the document had been sent but said that, as a courtesy to the recipient, they do not give out the information beforehand.
Waxman’s letter specifically referred to the EPA’s decision reversing its interpretation of the governing laws and regulations in examining the air permit application for the project. Waxman asked for a copy of the analysis “that provides the factual and legal basis for EPA’s reversal on this project.”
The Cabrillo Port is not the only LNG project proposed for California’s coastline. There are four others in various stages of the required environmental and government permitting application process (see sidebar, below).
Do we need LNG?
An increasing number of watchdog groups, both public and private, including one within the energy industry itself, are publishing information from studies that confute the claims of a dire shortage of natural gas in California that can only be remedied by the importation of LNG.
Sempra Energy, the parent company of Southern California Gas and San Diego Gas and Electric companies, and whose LNG facility in Baja California is already well into construction, has steadily warned of the coming shortage of natural gas in this state. In a company chart showing production versus consumption in the lower 48 states since 1970, with projections from early the 2000s to the year 2020, production drops severely against a sharp rise in consumption, requiring a huge net importation of gas.
“California has little choice but to allow the development of LNG terminals,” the company concludes.
Sempra’s graph, however, differs markedly from one published by the U.S. Department of Energy covering a projected period from 1970 to 2025. The DOE chart shows both production and consumption climbing steadily, and although demand is projected to exceed supply somewhat by 2025, the net imports required are far less than Sempra’s prediction.
“Are we running out of domestic supplies of natural gas? No,” states Bill Powers, petroleum engineer, on the web site of the Border Power Plant Working Group.
The organization describes itself as an advocate for the development of environmentally sustainable energy facilities in the U.S.-Mexico border region.
“Sempra’s doomsday scenario depicts a crisis in domestic natural gas output [that] is debunked…when compared to independent industry projections,” Powers says.
According to DOE figures, U.S. domestic production will increase by about 20 percent from 2001 to 2025. (A California Energy Commission presentation in 2005 showed a 20 percent decline in natural gas demand in California since 2001.) Canadian imports will remain relatively constant, the DOE said, while a gradual decline in use from the 2002 peak in California will rebound in 2016.
“There has been a lot of hype that we’re not going to have enough natural gas supply domestically,” said Rory Cox, California program director of the nonprofit organization Pacific Environment, headquartered in San Francisco. “A year ago, when prices rose to stratospheric levels over the winter, the industry was saying that we’re running out of natural gas.
“The Midwest Attorneys General Natural Gas Working Group investigated the situation in detail and found that it really had nothing to do with that. There was plenty of natural gas in storage; what was really going on was price manipulation by energy traders, who were operating in a deregulated market.”
In the full report prepared for the attorneys general in March 2006, writer Mark N. Cooper, Ph.D. said, “This [supply shortage] is a simple story, which is often repeated because it is easy to sell…The reality is much more complex. Demand has not been ‘surging,’ ‘soaring’ or ‘skyrocketing,’ as is frequently reported in the press. Over the past 10 years it has been relatively flat…Over the past three years it has declined slightly.
“The reserve-to-production ratio has been increasing for the past six years. The sad irony is that the markets for natural gas (a commodity which is a vital necessity for many Americans) are subject to far less regulation that most other commodities.”
The focus on LNG, gas shortage or not, highlights a missing element of the energy situation, Pacific Environment’s Cox said. California has failed to examine seriously how constructing LNG terminals could undermine the state’s own goals for energy efficiency and renewable energy.
“There has never been a real needs assessment done by the state,” Cox said. “One of our requests has always been for an evidentiary hearing to discuss our energy future and how we can make it without LNG. Renewables and energy efficiency can produce up to 380 percent of the projected additional gas demand in the next 10 years.”
The Community Environmental Council of Santa Barbara, in an independent report in 2006, concurred.
“The lack of a robust debate over the need for LNG import terminals in California has created a serious blind spot in the state’s energy policy,” the report stated. “Many industry advocates and state and federal policy makers believe California needs LNG, but a quick analysis of the numbers tells a different story.”
The California Coastal Commission will hold a hearing regarding Cabrillo Port on April 16 in Santa Barbara.
Proposed California LNG ports
There are presently four LNG programs in various stages of activity in California, according to the state Web site. In addition to the Cabrillo Deepwater Port Facility, the Clearwater Port LNG Project (also to be located offshore from Oxnard), OceanWay LNG Terminal (offshore from Los Angeles International Airport) and Pacific Gateway LNG Facility, off the coast of Northern California, are in various stages of environmental review and the application process. A proposal for a port in Long Beach Harbor was recently vetoed by port commissioners, who cited the risks of pollution and a catastrophic accident.
Clearwater Port, to be developed by a subsidiary of Northern Star Natural Gas, will involve the retrofit of an existing oil-drilling platform 12 miles off the Oxnard coastline into a LNG receiving terminal. There will be no onsite storage at the terminal. LNG will be brought in by ships, unloaded and regasified and sent directly into the Southern California Gas Co. underground pipeline network via undersea pipelines. The target date for the project’s EIS/EIR is the fourth quarter of this year and the first quarter of 2008 for agency permits, with the start of construction planned later that year. The company hopes to begin commercial operations in late 2009.
The OceanWay LNG Terminal is being developed by Woodside Energy, a wholly owned subsidiary of Woodside Petroleum, Ltd. Permit applications were submitted in August last year for two delivery buoys to be positioned 20 miles offshore from LAX, with undersea pipelines to deliver natural gas to shore. The Federal Deepwater Port Act requires that the review process for permits must be completed and a decision made within one year of the time the applications are filed. The gas will come from LNG delivered in ships, unloaded and regasified using specially built regasification vessels similar in size to current container ships that enter the Port of Long Beach. The OceanWay LNG ships, however, will remain out to sea, five miles beyond the commercial shipping lanes, while processing the LNG, according to the company’s Web site.
Pacific Gateway is the proposal of a firm named Excelerate Energy for an “Energy Bridge” deepwater port off the coast of Northern California. Excelerate Energy is a private corporation formed in 2003 “to pursue new LNG importation alternatives.” The company says its Gulf Gateway Energy Bridge has been delivering regasified LNG since 2005 from a deepwater port facility 116 miles off the Louisiana Coast. The firm projects its LNG port to be online sometime in 2009, with an expected output capacity of 600 to 1,000 million cubic feet of natural gas per day. Although scheduled for August of last year, project applications for Pacific Gateway have yet to be submitted, according to the California State Web site.