Keeping California’s Clean Energy Promise Loretta Lynch Member, Board of Directors Pacific Environment
What is Liquefied Natural Gas?
Natural gas is extracted through underground drilling overseas. Chilled to -260 degrees Fahrenheit—liquefies, becomes highly flammable. Moved in huge, diesel-burning tankers across the ocean. Re-gasified at coastal import terminals. Sent into CA’s gas pipelines which must be retrofitted to handle foreign gas.
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LNG: Further Dependence on Foreign Energy
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Source: California Energy Commission
Proposed Liquefied Natural Gas Terminals – West Coast
Source: California Energy Commission
Jordan 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 www.pacificenvironment.org
Fact: 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.
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Canadian Gas Supply vs. Demand
Source: Canada National Energy Board
The Fictional Shortage of ‘05
December ’05 – ’06: Gas prices hit $16 per unit. Utilities blamed hurricanes, tight supplies, ‘spiraling demand.’ March ’06 Mid-Western Attorneys General Report: Prices driven by complex, deregulated market, NOT shortages. Spring ’06: Gas storage is at record highs, price tumbles to about $6. June ’06: Washington Post Reports “Gas Glut.”
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LNG: Not A Clean Fuel Coal - Pulverized Coal - Advanced IGCC Liquefied Natural Gas
Global Warming Gas Pollution: Grams per Kilowatt Hour
Natural Gas - Domestic Geothermal Solar, Wind, Tidal 0
200
400
600
800
Sources: Richard Heede, Orkustofnun, IAE Greenhouse Gas R&D Program
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1000
The Inconvenient Truth About LNG & Global Warming
Gas pipeline leaks common, 2.3% of gas lost.
18 to 22 % of carbon dioxide lost in extraction, liquefaction, shipping, and re-gasification.
CO2 emitted from LNG tankers.
Burning natural gas at power plant emits CO2.
Cumulative impact: LNG emits up to 44 % more greenhouse gas emissions than domestic natural gas.
BHP Billiton LNG Facility will add 270 tons of smog per year. Ventura County’s single largest polluter.
Photo: Canadian Ice Service
Al Gore: Drastic GHG reductions needed within 10 years.
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Likely Source of California’s LNG: Environmentally Sensitive Sakhalin Island •Western Pacific Gray Whale: less than 100 remaining. •Impacts of offshore drilling: noise, drilling muds, danger of oil spills. •Pipeline crossings endanger salmon survival. •Dumping of wastes endangers rich local fisheries in Aniva Bay www.pacificenvironment.org
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Social Unrest in Sakhalin From LNG Infrastructure Construction Protest outside LNG plant construction site, February 2006
Indigenous peoples’ protest, northern Sakhalin, January 2005
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LNG: Encourages Coal, Discourages Renewables
LNG will flood market with expensive, unnecessary fossil fuels. It’s high cost ($4.50 MMbtu) will raise the floor price of energy, making polluting coal more competitive. This dynamic will crowd out and set back renewable investment.
Mountain top removal for coal production. Photo: Ohio Valley Environmental Coalition
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LNG: 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.
Accident at LNG export facility, Skikda, Algeria, January 2004
•Skikda, Algeria: At least 26 killed, windows shattered up to 7 miles away in 2004 accident. www.pacificenvironment.org
Long Beach LNG Project: 3 Mile Radius
3 Miles 2000 Population =
85,886 plus 25,000 POLA/POLB employees www.pacificenvironment.org
Average cost of U.S. natural gas production under $3/MMBtu
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California 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
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LNG = 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.
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California Gas Demand 3,000,000
•Demand is expected to stay flat until 2010.
2,500,000 2,000,000
MMcf
•In California, we are using 20 percent less than we were in 2000.
Total Gas Demand in California (Mmcf)
1,500,000 1,000,000 500,000 0 1998 1999 2000 2001 2002 2004 2005 2008 2016 2020 2025
Source: Dave Maul, California Energy Commission
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Total Gas Production in California (Mmcf)
How 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. www.pacificenvironment.org
Old, 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.
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Other Efficiency Opportunities
Source: Community Environmental Council.
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The Role of Renewables
Source: Community Environmental Council
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Wind More Economical Than Natural Gas „
„
„
Wind power now costs 5 cents per kilowatt hour. NG prices peaked at 8 to 9 cents in winter. Wind industry creates 7 times more jobs than natural gas industry. Wind provides long term income to landowners who host the turbines.
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Who Are the LNG Companies?
Senate Bill Will Put LNG on Trial
Senate Bill 426, “Informed Choices on LNG,” sponsored by Sen. Joe Simitian. Mandates a needs assessment for LNG, then a ranking of each project. Necessary First Step
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Slides for Reference
Three Steps to A Clean Energy Future 1. 2.
3.
Replace All Aging Gas Fired Power Plants. Follow Through on Other Efficiency Commitments. Adhere to Governor’s Promise: 20 percent renewable by 2010.
A Tale of Two Graphs
Source: Energy Information Agency, U.S. Department of Energy
Source: Sempra Energy
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California has Significant Untapped Renewable Energy Resources „
California Energy Commission California Energy Commission Renewable
Resources Development Renewable Resources Development Report Report found 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
Potential Natural Gas Demand Reduction of 400 mmcf or More Per Day
Meeting the energy efficiency goals recommended by the Energy Meeting the energy efficiency goals recommended by the Energy Commission staff would reduce electric energy use by 25,000 Commission staff would reduce electric energy use by 25,000 GWh 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 y use 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 2010 would further reduce electric energy use by another 1,000 to would further reduce electric energy use by another 1,000 to 2,000 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 into reduced natural gas usage at power plants by approximately 400 reduced natural gas usage at power plants by approximately 400 mmcf 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 fired steam 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 Repowering these facilities with newer, combined cycle technology would lower their heat rates to approximately 7,000 technology would lower their heat rates to approximately 7,000 BTU/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 r 500 500 mmcf mmcf per day
When Will the Bridge Be Done? “…I call for the use of methane as the transitional fuel, the bridging fuel between our dependence on fossil fuel and moving to solar energy.” Barry Commoner, 1989 (17 Years Ago)
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Canada has 516 TCF of Natural Gas.
U.S. natural gas usage rate DOE EIA estimate of U.S. reserves, excluding Alaska California daily usage rate
60 bcfd [22 tcf/year] 1,400 tcf [60-year supply] 5.5 bcfd
Is There a Real Demand for Additional LNG in the U.S.? •
What the Department of Energy says: •
•
• •
U.S. domestic production will increase by about 20% from 2001 to 2025, in response to 1.8% per year assumed growth rate in demand; Canadian imports will fluctuate, though remain relatively constant from 2001 to 2025; Primary growth area is electric power production. Similar scenarios repeated in industry press, and by Wall Street analysts.
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Dredging Fisheries-Rich Aniva Bay
Does California Need LNG?
LNG Industry Hype: North America is Running out of Natural Gas. North America Has Enough Natural Gas to meet demand for at least 60 Years, according to Department of Energy. Difference in Supply and Demand: Canada and Existing LNG Source: Department of Energy
Industry Claims About LNG “North America's demand for natural gas is growing, yet production in the lower 48 of the United States is decreasing. “ -Sempra Energy “(LNG is) reliable and clean fuel to protect the environment.” – BHP Billiton “The LNG industry has one of the best safety records in the energy business.” – Chevron-Texaco
Sempra and Shell’s proposed Costa Azul project, Baja California (now under construction) www.pacificenvironment.org
Myth #1: CA Needs More Natural Gas
Even the CA Energy Commission Projects Flat Demand Through the Next Decade All Natural Gas Demand Productions Discount Improved Natural Gas Efficiency Gains, Despite Improved Programs and Increased Funding All Projections Fail to Account for Replacement of CA’s Aging Natural Gas-Fired Electric Plants
Myth #2: North America Lacks Adequate Natural Gas Supplies
Canada and the Rocky Mountain Basin are Both Highly Productive Canada and the Rocky Mountain Basin are Both Relatively New Production Sources New Pipeline Infrastructure Increases CA’s Access to Wyoming Gas Plenty of North American Supply Exists to Fuel CA Markets for the Next Few Decades
Replacing Aging Plants with New Plants Will Further Drop CA’s Natural Gas Demand
Old natural gas-fired power plants use ½ to 2/3rds more natural gas than new plants Old natural gas plants spew twice to ten times more pollutants into the air than new natural gas-fired plants Replacing out of date plants with new GAS-fired plants drops CA’s natural gas demand 12.5% Replacing out of date plants w/ ½ new gas-fired plants and ½ renewable power drops CA’s natural gas demand by 19%
Comparison of Coal and Domestic NG
Source: Western Governors Asssociation, “Conceptual Plans for Electricity Transmission in the West.�