*Two Views: This commentary is one of two written for the Business Journal on the question of building liquid natural gas facilities in the L.A. area.
Industry and policy makers are putting California’s economy and safety at risk in their rush to commit us to a future of dependence on foreign liquefied natural gas.
Before repeating mistakes made with petroleum, we should weigh the alleged need for LNG against the alternative of energy independence and if we forgo independence, we must at least implement higher safety standards.
Liquefied natural gas is natural gas super-cooled to minus 260 degrees. The liquid product is condensed to 1/600th of its gaseous volume, allowing shipment from the Middle East, Indonesia, Russia and South America in tankers as large as three football fields to U.S. tank facilities the size of high-rises. Geopolitical tensions, piracy and terrorism indicate that LNG trade could diversify conflict at least as much as it might diversify energy portfolios, and history suggests that military force may one day be required to protect access to this fuel.
California is facing applications to construct three offshore LNG terminals under federal Maritime Administration authority and a Port of Long Beach project under the competing Federal Energy Regulatory Administration, which the Energy Policy Act of 2005 allowed to usurp state permitting authority. Neither agency’s decisions are based on needs assessment; rather, the Department of Energy has indicated its desire to permit as many terminals as possible in order to “let the market decide” which should be built. But the market, to put it mildly, is uncertain.
Energy Policy Act provisions will allow LNG terminal operators to withhold pipeline capacity, effectively prohibiting competing sellers and potentially recreating exactly the market forces California experienced in 2001 when gas prices rose sharply. Meanwhile, local imports could induce construction of new gas pipelines to serve higher bidders out of state. At the same time, California terminals would compete with 16 new U.S. LNG projects that have already been approved, as well as with domestic Rocky Mountain, Alaskan and Canadian supplies. In short, there is no guarantee Long Beach’s operation would survive.
Then there are lapsing long-term LNG contracts that have pegged Atlantic, Pacific and European imports to different fuel prices and currencies, short-term contracts replacing them and the emergence of a spot market. Finally there is the Organization of Gas Exporting Nations with goals similar to OPEC’s. All of these factors could result in far higher prices for imported gas.
California’s energy picture differs from the nation’s. Our projected growth is primarily for electricity generation, and the only sector of the state’s electricity portfolio that is contractually open to replacement is its gas-fired plants, many of which are obsolete and waste more gas than an LNG terminal would bring. Efficiency and conservation mandates and a legislative requirement to obtain 20 percent of our electricity from renewable sources by 2010 have already been adopted and will more than offset projected gas shortfalls. Abandoning those programs in favor of LNG will discourage investments in lucrative solar, wind, geothermal, wave and biomass projects, as well as the jobs they would create and the industries they could attract.
The market may be uncertain, but the risks associated with LNG are not.
It is a fact that spilled LNG can disperse over several miles, that its vapor can remain flammable and explosive for long periods and that its concentrated energy makes extinguishing large-scale fires impossible. It is also a fact that federal safety standards provide no marine exclusion zones to protect against surface water fires, and land-exclusion zones are based on small spills rather than total failure even though significant LNG fires can burn humans as far as a mile away.
Under those guidelines, the proposal to build an LNG terminal at the Port of Long Beach is an accident waiting to happen. The 27-acre site is a fraction of the size of remote Gulf facilities and 25 percent smaller than the nation’s only urban terminal. It is man-made landfill stuck onto a mud flat in a flood zone next to the L.A. River. It is part of an area that has sunk up to 30 feet due to oil extraction and is supported by water injection. Moreover, it is in an oil field of 1,500 wells in a port complex that contains 11 million barrels of oil, is directly between three seismic faults in a liquefaction zone vulnerable to 27 faults within 100 miles and is within destructive range of an offshore tsunami fault.
The site is also within two miles of the bridge, freeway and rail access serving a port complex that moves one-third of the nation’s waterborne and 42 percent of the nation’s container cargo and 60 percent of California’s oil imports. It is assuredly a terrorist target.
Other states may need or want LNG, but California should pursue better options.
*Bry Myown is a spokesperson for Long Beach Citizens for Utility Reform and a member of Californians for Renewable Energy Inc. and Ratepayers for Affordable Clean Energy. She is a candidate for the Long Beach City Council.
