Twice in the last 30 years, natural gas companies have tried to use scare tactics to convince Californians to allow building of huge liquefied natural gas terminals along this state’s coast.
Both times, environmental and consumer groups, and some Indian tribes fought for years against proposals that appeared to be “greased,” guaranteed approval because the people behind them had solid connections in the state and federal governments.
But today, for the second time, it appears that all alleged justifications put forward by LNG promoters have flat-out disappeared. And with that, proposed projects are fading away, too.
LNG is natural gas supercooled to a liquid state at distant points like Indonesia, Australia and the Persian Gulf, and shipped here via a fleet of gigantic tankers costing about $1 billion a piece to construct.
The supposed reasons to bring LNG here consisted of an assertion that natural gas use in California will climb steeply over the next 20 years, and that domestic production of natural gas in other parts of America will gradually diminish and/or disappear.
If these claims were correct, utilities and other investors would be justified in spending many billions of dollars on LNG importing facilities and tankers. Because the state’s Energy Commission several years ago concluded those statements were accurate, as many as six proposals to build LNG on the California coast have been floated three – one just outside Eureka, another off the coast of southern Ventura County, and a third in the Santa Monica Bay beneath the takeoff pattern of Los Angeles International Airport – have already been scrubbed or mothballed.
The others will probably follow soon, along with similar proposals for plants in Oregon whose gas supplies would mostly wind up in California, where the project costs and shipping expenses would be tacked onto the price of the gas itself, adding many billions of dollars to monthly consumer bills.
Two new reports make it likely projects still active today will eventually go the way of the late-1970s era plan by Pacific Gas & Electric Co. and Pacific Lighting Corp. (now called Sempra Energy), which tried to build an LNG plant at Pt. Conception in Santa Barbara County. That plan had the backing of then-Gov. Jerry Brown, whose father, ex-Gov. Pat Brown, was the project’s paid spokesman. It won approval from every state and federal agency needed, but was stymied when a lawsuit by the Chumash Indian tribe claimed the point as sacred ground for its indigenous religion, causing years of delay.
During that delay, a worldwide glut of natural gas arose, making the LNG plan economically infeasible, so it quietly disappeared.
Something similar appears to be happening now, despite years of support for LNG by Gov. Arnold Schwarzenegger. The newest Annual Energy Outlook report from the federal Department of Energy, developed under the now-departed, pro-LNG George W. Bush administration, concluded that natural gas imports will diminish by 2030 to just 3 percent of what’s used in this country, from the current 16 percent.
That will happen, the DOE forecast said, because more and more domestic natural gas supplies will be developed.
The forecast adds that use of natural gas for industry and homes will be flat for at least the next 20 years. Combining more domestic supply with flat usage means there will soon be virtually no need for foreign-based supplies of gas. Say sayonara to the LNG push, at least for awhile.
New staff reports from California’s Public Utilities Commission and Energy Commission essentially predict the same usage pattern here as nationally, with virtually no increase in gas consumed, despite projected population increases. Those predictions stand in stark contrast to ones made several years earlier by the same agencies, which essentially repeated the conclusions of a Sempra report used to justify construction of that company’s just-opened Costa Azul LNG facility in Baja California, Mexico.
Costa Azul was supposed to provide large amounts of gas to California, but no one is sure anymore how much will actually arrive, because much of its planned supply will be going instead to Japan.
At the same time, NorthernStar Natural Gas is now delaying some of its efforts to gain approval for a $650 million receiving plant near Astoria, Oregon, and the timetable is stalled for that firm’s Clearwater Port proposal in Ventura County.
“The projections make it clear the West Coast does not need LNG,” said Rory Cox, program director for Pacific Environment and a longtime LNG opponent. “LNG was an inappropriate choice to begin with and it remains so.”
But consumers and their advocates must nevertheless remain vigilant. For LNG promoters have proven they’re persistent in seeking high profits at the expense of gas users. And the door for LNG in California will remain ajar until state utility commissioners rescind their 2004 decision that allows utilites like PG&E and Southern California Gas to replace domestic supplies with LNG if it ever becomes available in large amounts.
