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SAC RAMENTO BEE Thursday, April 12, 2007
LNG faces complex landscape
Hurdles abound -- but so does tenacity of backers
By Matt Weiser and Carrie Peyton Dahlberg - Bee Staff Writers
Put a chill on the same gas that heats millions of California homes, and you get a public enemy that's been run off from town after town along the state's coast for years.
The latest setback for a proposed liquefied natural gas plant, which would perch well offshore from Oxnard, illustrates both the hurdles that the supercooled gas called LNG faces and the tenacity of those who say we need it.
It also hints at what other LNG proponents may have to try if they want to succeed where others have failed.
The latest proposal, called the Cabrillo Port liquefied natural gas project, is from Australian energy giant BHP Billiton. It calls for a floating gas transfer and processing station 12 miles offshore near Oxnard.
On Monday, the State Lands Commission rejected a lease for two seafloor pipelines required for the project, effectively scuttling it -- at least for the time being. BHP might appeal the Lands Commission's decision in court.
Today, the California Coastal Commission is scheduled to consider its own set of permits for the project at its meeting in Santa Barbara.
Similar projects have been defeated in Eureka and Vallejo.
Monday's decision is not likely to temper the state's demand for clean-burning natural gas. But it may force other projects also being planned to pay closer attention to local environmental concerns.
"Imported LNG could be an economical and relatively environmentally friendly part of a lower-cost electricity supply solution," said Mark Hayes, a research fellow at Stanford University's Program on Energy and Sustainable Development. "If we don't site more LNG facilities in the U.S., it'll sustain the current high-price environment, and what we will see is a push to burn more coal instead."
LNG is simpler than the fancy name implies.
It is the same basic fuel we burn in our stoves and home furnaces, except that it has been chilled to at least minus 261 degrees Fahrenheit, at which point it is condensed so it can be easily transported by cargo ship.
Once delivered, LNG is warmed at the offshore platform until it again becomes a gas. Then it is plumbed into underwater pipes to land-based pipelines.
Electricity generators look to LNG the way some small-town residents long for a Wal-Mart or Costco: it's a potentially cheaper way to get more of what you need, or at least what you want.
If no more terminals are built to unload LNG, several energy analysts said, electricity and heating prices may rise. Some also believe true shortages could loom in California without more LNG, perhaps in just a few years.
Others are more dubious, predicting the main impact would be limited to price.
California could still get natural gas from LNG stations elsewhere, such as Mexico or the Gulf Coast. But it would likely pay a delivery premium, and may have to expand pipelines to boost delivery capacity.
"There's not what you would call a shortage of natural gas in the U.S., but supplies are pretty tight and it's one of the reasons prices are staying as high as they are," said Rich Ferguson, research director at the Center for Energy Efficiency and Renewable Technologies, based in Sacramento. "In the short run, if you want more natural gas, you're going to have to import it with LNG."
California faces a complex web of energy challenges, partly due to its own good intentions.
The state has just told big utilities they can't import electricity from any but the very cleanest coal-burning plants. That mandate will probably boost demand for natural gas.
At the same time, Canada is shipping less natural gas south because it's using more at home, said Harvey Morris, assistant general counsel at the state Public Utilities Commission.
"We need LNG to make up the difference," said Morris.
"By 2011, 2012, we're definitely going to need another LNG plant on the West Coast," in addition to one being built off Baja California, Morris said.
LNG facilities face unique environmental and safety challenges, but they're not insurmountable.
The fuel is not flammable as a liquid, but if mixed with oxygen it can erupt into walls of heat and flame that speed across water. Even worst-case devastation, however, would not span 10 miles at sea, Morris said.
He's not sure that message has gotten through to those fighting LNG terminals.
"Because there are legitimate safety concerns, I think there's irrationality when you do get it at a safe distance," he said.
There have been relatively few LNG explosions worldwide, but they are inevitably deadly. A 1944 blast in Cleveland killed 128 people. Another in Algeria in 2004 killed 27.
But the PUC determined after much research that a blast at an LNG transfer terminal located at least 10 miles offshore would not endanger people onshore.
Joe Reynolds, a senior attorney at the Natural Resources Defense Council, said offshore LNG facilities are potentially as harmful to the environment as offshore oil drilling rigs. The group does not oppose LNG universally. Carefully transported, LNG can be a cleaner-burning energy choice than many alternatives, he says.
"LNG is a way to diversify our supplies of natural gas as a transitional fuel toward something that's more environmentally friendly," Reynolds said.
Cabrillo Port calls for a floating platform 300 feet high and as long as three football fields that would store and regasify LNG from cargo ships.
The platform would burn natural gas 24 hours a day for its own operations, producing exhaust that could harm air quality onshore. It would also produce underwater noise that some environmentalists worry would disrupt migratory whales and other sea life.
Another concern is water quality. Four days a year, the facility would discharge about 4.3 million gallons of seawater that is 20 degrees warmer than the ocean at the discharge point, potentially harming sea life.
Reynolds said future proposals are likely to be better received if they employ newer technology that does not require fuel burning to regasify the LNG. This would eliminate air quality worries.
He also favors a transfer point that does not store LNG but immediately gasifies and pumps it ashore. And the right location might minimize threats to sea life, including whales migrating along the coast.
California has set a bold course toward reducing global warming, aiming to get 20 percent of its electricity from renewable sources by 2010. Because such goals are locked into regulations, LNG may not impact the state's greenhouse gas footprint in the final analysis, said Alex Farrell, a professor of energy resources at UC Berkeley.
As Farrell figures it, LNG is the second-worst power source when it comes to global warming, behind coal. LNG's transportation, cooling and heating all produce greenhouse gases.
"What we really need is a state energy plan that looks at all the resources we're going to need in the future, and get that decided before we make decisions on these individual projects," said Ferguson.
LNG faces complex landscape
Hurdles abound -- but so does tenacity of backers
By Matt Weiser and Carrie Peyton Dahlberg - Bee Staff Writers
Put a chill on the same gas that heats millions of California homes, and you get a public enemy that's been run off from town after town along the state's coast for years.
The latest setback for a proposed liquefied natural gas plant, which would perch well offshore from Oxnard, illustrates both the hurdles that the supercooled gas called LNG faces and the tenacity of those who say we need it.
It also hints at what other LNG proponents may have to try if they want to succeed where others have failed.
The latest proposal, called the Cabrillo Port liquefied natural gas project, is from Australian energy giant BHP Billiton. It calls for a floating gas transfer and processing station 12 miles offshore near Oxnard.
On Monday, the State Lands Commission rejected a lease for two seafloor pipelines required for the project, effectively scuttling it -- at least for the time being. BHP might appeal the Lands Commission's decision in court.
Today, the California Coastal Commission is scheduled to consider its own set of permits for the project at its meeting in Santa Barbara.
Similar projects have been defeated in Eureka and Vallejo.
Monday's decision is not likely to temper the state's demand for clean-burning natural gas. But it may force other projects also being planned to pay closer attention to local environmental concerns.
"Imported LNG could be an economical and relatively environmentally friendly part of a lower-cost electricity supply solution," said Mark Hayes, a research fellow at Stanford University's Program on Energy and Sustainable Development. "If we don't site more LNG facilities in the U.S., it'll sustain the current high-price environment, and what we will see is a push to burn more coal instead."
LNG is simpler than the fancy name implies.
It is the same basic fuel we burn in our stoves and home furnaces, except that it has been chilled to at least minus 261 degrees Fahrenheit, at which point it is condensed so it can be easily transported by cargo ship.
Once delivered, LNG is warmed at the offshore platform until it again becomes a gas. Then it is plumbed into underwater pipes to land-based pipelines.
Electricity generators look to LNG the way some small-town residents long for a Wal-Mart or Costco: it's a potentially cheaper way to get more of what you need, or at least what you want.
If no more terminals are built to unload LNG, several energy analysts said, electricity and heating prices may rise. Some also believe true shortages could loom in California without more LNG, perhaps in just a few years.
Others are more dubious, predicting the main impact would be limited to price.
California could still get natural gas from LNG stations elsewhere, such as Mexico or the Gulf Coast. But it would likely pay a delivery premium, and may have to expand pipelines to boost delivery capacity.
"There's not what you would call a shortage of natural gas in the U.S., but supplies are pretty tight and it's one of the reasons prices are staying as high as they are," said Rich Ferguson, research director at the Center for Energy Efficiency and Renewable Technologies, based in Sacramento. "In the short run, if you want more natural gas, you're going to have to import it with LNG."
California faces a complex web of energy challenges, partly due to its own good intentions.
The state has just told big utilities they can't import electricity from any but the very cleanest coal-burning plants. That mandate will probably boost demand for natural gas.
At the same time, Canada is shipping less natural gas south because it's using more at home, said Harvey Morris, assistant general counsel at the state Public Utilities Commission.
"We need LNG to make up the difference," said Morris.
"By 2011, 2012, we're definitely going to need another LNG plant on the West Coast," in addition to one being built off Baja California, Morris said.
LNG facilities face unique environmental and safety challenges, but they're not insurmountable.
The fuel is not flammable as a liquid, but if mixed with oxygen it can erupt into walls of heat and flame that speed across water. Even worst-case devastation, however, would not span 10 miles at sea, Morris said.
He's not sure that message has gotten through to those fighting LNG terminals.
"Because there are legitimate safety concerns, I think there's irrationality when you do get it at a safe distance," he said.
There have been relatively few LNG explosions worldwide, but they are inevitably deadly. A 1944 blast in Cleveland killed 128 people. Another in Algeria in 2004 killed 27.
But the PUC determined after much research that a blast at an LNG transfer terminal located at least 10 miles offshore would not endanger people onshore.
Joe Reynolds, a senior attorney at the Natural Resources Defense Council, said offshore LNG facilities are potentially as harmful to the environment as offshore oil drilling rigs. The group does not oppose LNG universally. Carefully transported, LNG can be a cleaner-burning energy choice than many alternatives, he says.
"LNG is a way to diversify our supplies of natural gas as a transitional fuel toward something that's more environmentally friendly," Reynolds said.
Cabrillo Port calls for a floating platform 300 feet high and as long as three football fields that would store and regasify LNG from cargo ships.
The platform would burn natural gas 24 hours a day for its own operations, producing exhaust that could harm air quality onshore. It would also produce underwater noise that some environmentalists worry would disrupt migratory whales and other sea life.
Another concern is water quality. Four days a year, the facility would discharge about 4.3 million gallons of seawater that is 20 degrees warmer than the ocean at the discharge point, potentially harming sea life.
Reynolds said future proposals are likely to be better received if they employ newer technology that does not require fuel burning to regasify the LNG. This would eliminate air quality worries.
He also favors a transfer point that does not store LNG but immediately gasifies and pumps it ashore. And the right location might minimize threats to sea life, including whales migrating along the coast.
California has set a bold course toward reducing global warming, aiming to get 20 percent of its electricity from renewable sources by 2010. Because such goals are locked into regulations, LNG may not impact the state's greenhouse gas footprint in the final analysis, said Alex Farrell, a professor of energy resources at UC Berkeley.
As Farrell figures it, LNG is the second-worst power source when it comes to global warming, behind coal. LNG's transportation, cooling and heating all produce greenhouse gases.
"What we really need is a state energy plan that looks at all the resources we're going to need in the future, and get that decided before we make decisions on these individual projects," said Ferguson.
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