20Cal%20June%2021%20-22

Keeping CaliforniaKeeping California’’s s Clean Energy PromiseClean Energy Promise

Loretta LynchLoretta LynchMember, Board of DirectorsMember, Board of Directors

Pacific EnvironmentPacific Environment

What is Liquefied Natural Gas?What is Liquefied Natural Gas?

Natural gas is extracted through Natural gas is extracted through underground drilling overseas.underground drilling overseas.Chilled to Chilled to --260 degrees 260 degrees FahrenheitFahrenheit——liquefies, becomes liquefies, becomes highly flammable.highly flammable.Moved in huge, dieselMoved in huge, diesel--burning burning tankers across the ocean.tankers across the ocean.ReRe--gasified at coastal import gasified at coastal import terminals.terminals.Sent into CASent into CA’’s gas pipelines s gas pipelines which must be retrofitted to which must be retrofitted to handle foreign gas.handle foreign gas.

www.pacificenvironment.org

LNG: Further Dependence on Foreign Energy


Source: California Energy Commission

Proposed Liquefied Natural Gas Proposed Liquefied Natural Gas Terminals Terminals –– West CoastWest Coast

Source: California Energy Commission

Jordan Cove/Pacific ConnectorJordan Cove/Pacific Connector

•Pipeline will connect Coos Bay LNG terminal to California Border.

•Can move 1 Billion Cubic feet of gas per day.

•Will Serve PG&E Customers in Northern California.

•No Current plans for LNG terminals in Northern California.

Map: San Francisco Chronicle


Fact: Plentiful Domestic NG SuppliesFact: Plentiful Domestic NG Supplies

•Industry Hype of Gas Shortages False.

•There are 1,400 Trillion Cubic Feet of Gas Reserves in the Lower 48 United States.

•The U.S. Uses About 60 Billion Cubic Feet of Gas per year.

•That’s a 60 year supply.

•There are 488 – 516 TCF of gas reserves in Canada.

•Canada now uses about 8 billion Cubic Feet of Gas per Year, projected to rise to 12 billion by 2025 – 190 BCF Total.

•At that rate of growth, Canada has about enough gas to supply itself for 90 years, not counting exports.


Canadian Gas Supply vs. DemandCanadian Gas Supply vs. Demand

Source: Canada National Energy Board

The Fictional Shortage of The Fictional Shortage of ‘‘0505

December December ’’05 05 –– ’’06: Gas prices hit $16 per unit.06: Gas prices hit $16 per unit.Utilities blamed hurricanes, tight supplies, Utilities blamed hurricanes, tight supplies, ‘‘spiraling demand.spiraling demand.’’March March ’’06 Mid06 Mid--Western Attorneys General Western Attorneys General Report: Prices driven by complex, deregulated Report: Prices driven by complex, deregulated market, NOT shortages.market, NOT shortages.Spring Spring ’’06: Gas storage is at record highs, price 06: Gas storage is at record highs, price tumbles to about $6. tumbles to about $6. June June ’’06: Washington Post Reports 06: Washington Post Reports ““Gas Glut.Gas Glut.””


LNG: Not A Clean FuelLNG: Not A Clean Fuel

Sources: Richard Heede, Orkustofnun, IAE Greenhouse Gas R&D Program

0 200 400 600 800 1000

Solar, Wind, Tidal

Geothermal

Natural Gas - Domestic

Liquefied Natural Gas

Coal - Advanced IGCC

Coal - Pulverized

Global Warming GasPollution: Grams perKilowatt Hour


The Inconvenient Truth About LNG & Global The Inconvenient Truth About LNG & Global WarmingWarming

Gas pipeline leaks common, 2.3% of gas lost.Gas pipeline leaks common, 2.3% of gas lost.

18 to 22 % of carbon dioxide lost in extraction, 18 to 22 % of carbon dioxide lost in extraction, liquefaction, shipping, and reliquefaction, shipping, and re--gasification.gasification.

CO2 emitted from LNG tankers.CO2 emitted from LNG tankers.

Burning natural gas at power plant emits CO2. Burning natural gas at power plant emits CO2.

Cumulative impact: LNG emits up to 44 % more Cumulative impact: LNG emits up to 44 % more greenhouse gas emissions than domestic natural greenhouse gas emissions than domestic natural gas.gas.

BHP Billiton LNG Facility will add 270 tons of BHP Billiton LNG Facility will add 270 tons of smog per year. Ventura Countysmog per year. Ventura County’’s single largest s single largest polluter.polluter.

Al Gore: Drastic GHG reductions needed within Al Gore: Drastic GHG reductions needed within 10 years.

Photo: Canadian Ice Service

10 years.


Likely Source of CaliforniaLikely Source of California’’s LNG: s LNG: Environmentally Sensitive Sakhalin IslandEnvironmentally Sensitive Sakhalin Island

••Western Pacific Gray Whale: Western Pacific Gray Whale: less than 100 remaining.less than 100 remaining.

••Impacts of offshore drilling: Impacts of offshore drilling: noise, drilling noise, drilling mudsmuds, danger of , danger of oil spills.oil spills.

••Pipeline crossings endanger Pipeline crossings endanger salmon survival.salmon survival.

••Dumping of wastes endangers Dumping of wastes endangers rich local fisheries in rich local fisheries in AnivaAniva BayBay


Social Unrest in Sakhalin From LNG Social Unrest in Sakhalin From LNG Infrastructure ConstructionInfrastructure Construction

Protest outside LNG plant Protest outside LNG plant construction site, February construction site, February 20062006

Indigenous peoplesIndigenous peoples’’protest, northern protest, northern Sakhalin, January 2005Sakhalin, January 2005


LNG: Encourages Coal, Discourages LNG: Encourages Coal, Discourages RenewablesRenewables

LNG will flood market LNG will flood market with expensive, with expensive, unnecessary fossil fuels.unnecessary fossil fuels.ItIt’’s high cost ($4.50 s high cost ($4.50 MMbtuMMbtu) will raise the ) will raise the floor price of energy, floor price of energy, making polluting coal making polluting coal more competitive. more competitive. This dynamic will crowd This dynamic will crowd out and set back out and set back renewable investment.

Mountain top removal for coal production. Photo: Ohio Valley Environmental Coalition

renewable investment.


LNG: Safety HazardLNG: Safety Hazard•Sandia Study 2004: hazard range for an LNG spill is about 1.5 miles.

•Jerry Havens: flammable vapors can travel 3 miles or more.

•Richard Clarke: LNG tankers are known terrorist targets.

•Skikda, Algeria: At least 26 killed, windows shattered up to 7 miles away in 2004 accident.

Accident at LNG export facility, Skikda, Algeria, January 2004


Long Beach LNG Project: 3 Mile Radius

3 Miles2000

Population =85,886

plus 25,000 POLA/POLB employees


Average cost of U.S. natural gas Average cost of U.S. natural gas production under $3/MMBtuproduction under $3/MMBtu


California LNG at ~$4.50/MMBtuCalifornia LNG at ~$4.50/MMBtu

From: James Kendell, DOE EIA, Current Natural Gas and LNG Projections, National Association of Regulatory Utility Commissioners, July 29, 2003


LNG = Higher Utility BillsLNG = Higher Utility Bills•California LNG investment dependent on locked-in, long term contracts with utilities. Non-competitive environment.

•Cost of infrastructure passed on to consumers through charge on bill.

•Cost of foreign extraction passed on to taxpayers through Export Credit Agencies.

•Cost of increased security around facilities passed on to taxpayers.

•LNG More Expensive to Produce and Transport than domestic gas.

•Global Competition from China, India, Europe will drive up cost.

•Increasing talk by gas producing countries of natural gas cartel.

•LNG Supply chain: Minimum of $4 billion investment.


California Gas DemandCalifornia Gas Demand

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1998 1999 2000 2001 2002 2004 2005 2008 2016 2020 2025

MM

cf

Total Gas Demand in California (Mmcf)

Total GasProductionin California (Mmcf)

•In California, we are using 20 percent less than we were in 2000.

•Demand is expected to stay flat until 2010.

Source: Dave Maul, California Energy Commission


How To Reduce Gas DemandHow To Reduce Gas Demand

Source: Community Environmental Council

Renewables and Efficiency have the potential to meet more than 3 times the projected increase in energy demand with clean, safe energy.


Old, Gas Guzzling Power PlantsOld, Gas Guzzling Power Plants

•About 2/3rds of gas fired electricity comes from power plants over 25 Years old.

•Most of these are sited in poor neighborhoods, and are a source of asthma.

•Everyday, these plants spew 2 to 10 times pollutants than new plants.

•Replacing them would save about 50,000 GWh, or about 85 percent of energy produced by one LNG terminal.

Hunter’s Point Power Plant, Decommissioned in 2006.


Other Efficiency OpportunitiesOther Efficiency Opportunities

Source: Community Environmental Council.


The Role of The Role of RenewablesRenewables

Source: Community Environmental Council


Wind More Economical Than Wind More Economical Than Natural GasNatural Gas

Wind power now costs 5 Wind power now costs 5 cents per kilowatt hour. cents per kilowatt hour. NG prices peaked at 8 to NG prices peaked at 8 to 9 cents in winter.9 cents in winter.Wind industry creates 7 Wind industry creates 7 times more jobs than times more jobs than natural gas industry.natural gas industry.Wind provides long term Wind provides long term income to landowners income to landowners who host the turbines.who host the turbines.


Who Are the LNG Companies?Who Are the LNG Companies?

Senate Bill Will Put LNG on TrialSenate Bill Will Put LNG on Trial

Senate Bill 426, Senate Bill 426, ““Informed Choices on LNG,Informed Choices on LNG,””sponsored by Sen. Joe sponsored by Sen. Joe SimitianSimitian..Mandates a needs assessment for LNG, then a Mandates a needs assessment for LNG, then a ranking of each project.ranking of each project.Necessary First StepNecessary First Step


Slides for ReferenceSlides for Reference

Three Steps to A Clean Energy Three Steps to A Clean Energy FutureFuture

1.1. Replace All Aging Gas Fired Power Plants.Replace All Aging Gas Fired Power Plants.2.2. Follow Through on Other Efficiency Follow Through on Other Efficiency

Commitments.Commitments.3.3. Adhere to GovernorAdhere to Governor’’s Promise: 20 percent s Promise: 20 percent

renewable by 2010.renewable by 2010.

A Tale of Two GraphsA Tale of Two Graphs

Source: Energy Information Agency, U.S. Department of Energy

Source: Sempra Energy


�

California Energy Commission California Energy Commission Renewable Resources Development Renewable Resources Development Report Reportfound that there are more than enough resources to meet the found that there are more than enough resources to meet the accelerated Renewable Portfolio

Standard in 2010

California has Significant Untapped Renewable Energy Resources

Potential Natural Gas Demand Reduction of 400mmcf or More Per Day

� Meeting the energy efficiency goals recommended by the Energy Meeting the energy efficiency goals recommended by the EnergyCommission staff would reduce electric energy use by 25,000 Commission staff would reduce electric energy use by 25,000GWh per year GWh per year�� The state’s 2005 building standards should reduce electric energ The state’s 2005 building standards should reduce electric energy yuse by another 3,000 to 4,000 GWh per year use by another 3,000 to 4,000 GWh per year�� Accelerating the Renewal Portfolio Standard from 2017 to 2010 Accelerating the Renewal Portfolio Standard from 2017 to 2010would further reduce electric energy use by another 1,000 to would further reduce electric energy use by another 1,000 to2,000 GWh per year 2,000 GWh per year�� These reductions in electric energy use would translate into These reductions in electric energy use would translate intoreduced natural gas usage at power plants by approximately 400 reduced natural gas usage at power plants by approximately 400mmcf mmcf or more per day or more per day

Further Gas Demand Reductions Are Possible Through Further Gas Demand Reductions Repowering Repowering or Retirement of California’s Aging Power Plants

�� California has approximately 16,600 MW of older natural gas California has approximately 16,600 MW of older natural gas-fired firedsteam generating plants steam generating plants�� Generally more than 30 to 40 years old with high heat rates, i.e Generally more than 30 to 40 years old with high heat rates, i.e., .,above 10,000 BTU/KWh above 10,000 BTU/KWh�� Repowering these facilities with newer, combined cycle Repoweringthese facilities with newer, combined cycletechnology would lower their heat rates to approximately 7,000 technology would lower their heat rates to approximately 7,000BTU/KWh BTU/KWh�� This would save approximately 174 Bcf of natural gas per year, o This would save approximately 174 Bcf of natural gas per year, or r500 500 mmcf mmcf per day

When Will the Bridge Be Done?When Will the Bridge Be Done?

“…“…I call for the use I call for the use of methane as the of methane as the transitional fuel, the transitional fuel, the bridging fuel between bridging fuel between our dependence on our dependence on fossil fuel and moving fossil fuel and moving to solar energy.to solar energy.””

Barry Commoner, 1989Barry Commoner, 1989(17 Years Ago)(17 Years Ago)


Canada has 516 TCF of Natural Gas.

U.S. natural gas usage rateU.S. natural gas usage rate 60 60 bcfdbcfd[22 [22 tcftcf/year]/year]

DOE EIA estimate of U.S. DOE EIA estimate of U.S. reserves, excluding Alaskareserves, excluding Alaska

1,400 1,400 tcftcf[60[60--year supply]year supply]

California daily usage rateCalifornia daily usage rate 5.5 5.5 bcfdbcfd

Is There a Real Demand for Is There a Real Demand for Additional LNG in the U.S.?Additional LNG in the U.S.?

•• What the Department of Energy says:What the Department of Energy says:•• U.S. domestic production will increase by about U.S. domestic production will increase by about

20% from 2001 to 2025, in response to 1.8% per 20% from 2001 to 2025, in response to 1.8% per year assumed growth rate in demand;year assumed growth rate in demand;

•• Canadian imports will fluctuate, though remain Canadian imports will fluctuate, though remain relatively constant from 2001 to 2025;relatively constant from 2001 to 2025;

•• Primary growth area is electric power production.Primary growth area is electric power production.•• Similar scenarios repeated in industry press, and by Similar scenarios repeated in industry press, and by

Wall Street analysts.Wall Street analysts.


Dredging FisheriesDredging Fisheries--Rich Rich AnivaAniva BayBay

Does California Need LNG?Does California Need LNG?LNG Industry LNG Industry Hype: North Hype: North America is Running America is Running out of Natural Gas.out of Natural Gas.North America Has North America Has Enough Natural Enough Natural Gas to meet Gas to meet demand for at least demand for at least 60 Years, according 60 Years, according to Department of to Department of Energy.Energy.Difference in Difference in Supply and Supply and Demand: Canada Demand: Canada and Existing LNGand Existing LNG

Source: Department of Energy

Industry Claims About LNGIndustry Claims About LNG““North America's demand for natural gas is growing, yet productioNorth America's demand for natural gas is growing, yet production in n in the lower 48 of the United States is decreasing. the lower 48 of the United States is decreasing. ““

--Sempra EnergySempra Energy““(LNG is) reliable and clean fuel to (LNG is) reliable and clean fuel to protect the environment.protect the environment.””

–– BHP BillitonBHP Billiton““The LNG industry has one of the The LNG industry has one of the best safety recordsbest safety records in the energy in the energy business.business.””

–– ChevronChevron--TexacoTexaco

Sempra and Shell’s proposed Costa Azul project, Baja California (now under construction)


Myth #1: CA Needs More Natural Gas Myth #1: CA Needs More Natural Gas

Even the CA Energy Commission Projects Even the CA Energy Commission Projects FlatFlatDemand Through the Next DecadeDemand Through the Next DecadeAll Natural Gas Demand Productions All Natural Gas Demand Productions DiscountDiscountImproved Natural Gas Efficiency Gains, Improved Natural Gas Efficiency Gains, Despite Improved Programs and Increased Despite Improved Programs and Increased FundingFundingAll Projections All Projections FailFail to Account for to Account for Replacement of Replacement of CACA’’s Aging Natural Gass Aging Natural Gas--Fired Electric PlantsFired Electric Plants

Myth #2: North America Lacks Myth #2: North America Lacks Adequate Natural Gas SuppliesAdequate Natural Gas Supplies

Canada and the Rocky Mountain Basin are Both Highly Canada and the Rocky Mountain Basin are Both Highly ProductiveProductiveCanada and the Rocky Mountain Basin are Both Canada and the Rocky Mountain Basin are Both Relatively New Production SourcesRelatively New Production SourcesNew Pipeline Infrastructure Increases CANew Pipeline Infrastructure Increases CA’’s Access to s Access to Wyoming GasWyoming GasPlenty of North American Supply Exists to Fuel CA Plenty of North American Supply Exists to Fuel CA Markets for the Next Few DecadesMarkets for the Next Few Decades

Replacing Aging Plants with New Plants Will Further Replacing Aging Plants with New Plants Will Further Drop CADrop CA’’s Natural Gas Demands Natural Gas Demand

Old natural gasOld natural gas--fired power plants use fired power plants use ½½ to 2/3rds to 2/3rds more natural gas than new plantsmore natural gas than new plantsOld natural gas plants spew twice to ten times more Old natural gas plants spew twice to ten times more pollutants into the air than new natural gaspollutants into the air than new natural gas--fired plantsfired plantsReplacing out of date plants with new GASReplacing out of date plants with new GAS--fired plants fired plants drops CAdrops CA’’s natural gas demand 12.5%s natural gas demand 12.5%Replacing out of date plants w/ Replacing out of date plants w/ ½½ new gasnew gas--fired plants fired plants and and ½½ renewable power drops CArenewable power drops CA’’s natural gas demand s natural gas demand by 19%by 19%

Comparison of Coal and Domestic NGComparison of Coal and Domestic NG

Source: Western Governors Asssociation, “Conceptual Plans for Electricity Transmission in the West.”

20Cal%20June%2021%20-22

Documents

Transcript of 20Cal%20June%2021%20-22