NEW REASONS TO BE GLAD POPULISM KILLED CALIFORNIA LNG

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MARCH 23, 2012, OR THEREAFTER

BY THOMAS D. ELIAS

“NEW REASONS TO BE GLAD POPULISM KILLED CALIFORNIA LNG”

From the Economist magazine in London to the Wall Street Journal and even some California newspapers and talk shows, so-called authorities have been telling us for years this state’s populist system of letting the people decide major issues has made California dysfunctional, even ungovernable.

There’s a three-word reply to at least some of those complaints: liquefied natural gas.

Better known as LNG, this is natural gas supercooled into a liquid state and then hauled thousands of miles across oceans in specialized billion-dollar tankers to regasification facilities, where it is rewarmed and placed into the host area’s natural gas pipeline distribution system.

For many years starting in 1979, utility companies like Pacific Gas & Electric, Southern California Gas Co. and San Diego Gas & Electric Co. told Californians they desperately needed LNG to replaced dwindling supplies of domestic natural gas that’s shipped here via three major pipelines from Colorado, Alberta and the Permian Basin area of Texas and Oklahoma.

The first big effort won support from then-Gov. Jerry Brown (in his first Sacramento go-‘round) and employed his father, ex-Gov. Pat Brown as its lead spokesman. A partnership of PG&E and SoCal Gas was thwarted in its plan to build an LNG facility at Point Conception in Santa Barbara County when a lawsuit by the Chumash Indian tribe delayed it long enough for a worldwide glut of natural gas to make the whole thing moot.

Fast forward 25 years to the middle of the last decade and resource exploitation companies from around the world, led by Australia’s BHP Billiton Ltd., employed the same scare tactics in efforts to build LNG receiving plants near Eureka, Long Beach, Oxnard and other points. Each of these facilities was killed primarily because of local public opposition based on both environmental and economic factors. Because of the cost of facilities and ships, LNG would most likely have pushed gas bills upward significantly for generations.

But the people ruled, even if there was no formal ballot initiative on these proposals.

Now it turns out they were absolutely right. All over America and Canada, LNG receiving and warming terminals are being converted into LNG exporting and liquefaction facilities. That’s because gas produced from shale in the Rocky Mountain region and other locales has shut up all those who ever said LNG would be needed in California and many other places. Now the same people are saying shale can make America into a net energy exporter.

As early as last December, Mike Stice, senior vice president for natural gas at Oklahoma City-based Chesapeake Energy, told a meeting of investment analysts that “Every (LNG) operator on the Gulf Coast has a liquefaction plan.”

Voters who approved existing LNG plants strictly to receive gas are getting little or no say in places like New York, New Jersey British Columbia and the Gulf Coast, where those conversions are now taking place. This could expose them to far more peril than mere receiving facilities.

Besides the greenhouse gas produced by fleets of huge tankers constantly crisscrossing the world’s oceans, environmental opponents of California LNG plants were also worried about huge explosions and fires. So far, there have been no major fires at receiving/rewarming plants.

But there have been two devastating explosive events at liquefying/export facilities. One happened in 1944 in Cleveland, Ohio, where a fireball at a liquefying plant decimated a huge area around that city’s port on Lake Erie. The other occurred 60 years later in 2004 in Algeria, where builders of that country’s liquefaction plant had pledged it would forever be absolutely safe.

California’s populist opposition to LNG is now protecting the state from the perils associated with exporting LNG. Meanwhile, the nearest place to California where plans are proceeding for a facility that could be adapted both to ship and receive LNG is just outside Coos Bay, Ore., where popular opposition grows stronger by the week.

That putative plant was originally to provide natural gas to California, whose big utilities in the early 2000s pressured the state Public Utilities Commission into allowing them to give up some of their reserved space on two big pipelines that supply California. Fortunately, no one ever acted on that because no LNG facilities were built in this state.

It’s a classic example of populism enabling a constructive move that spared this state both danger and expense. It’s also a case of the people knowing better than so-called experts. And that’s the very opposite of dysfunctional.

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Elias is author of the current book "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It," now available in an updated third printing. His email address is tdelia@aol.com