SAN FRANCISCO, California - February 23 - In a letter sent to Governor Arnold Schwarzenegger today, 20 California environmental groups criticized the state’s plan to import Liquefied Natural Gas (LNG) as “contradictory” to the Governor’s stated goals for reducing greenhouse gas emissions. LNG isn’t mentioned once in the current draft of the state’s climate plan, despite on-going negotiations between California utilities and LNG providers to import new sources of the liquefied fossil fuel through terminals in Mexico, Long Beach, the Central Coast, and Oregon. The letter calls on the Governor to order a halt these negotiations until the long-term impact LNG will have on greenhouse gas emissions is thoroughly evaluated along with other impacts. Signers of the letter include the Sierra Club of California, Greenpeace, Pacific Environment, and Border Power Plant Working Group.

LNG is natural gas extracted abroad, chilled to a super-cooled state for transportation on tankers, shipped overseas, and re-gasified at an LNG import terminal. The letter points out that, “The entire process of bringing LNG to California adds between 18 and 40 percent of the greenhouse gasses into the atmosphere over what is now being emitted from our use of domestic natural gas.”

“The changing weather is sending us a strong signal: fossil fuels are a thing of the past,” said Rory Cox, Communications Coordinator at Pacific Environment, “If we can build a clean energy future--and create good jobs by doing so--why would the Governor insist on investing billions on these white elephants?”

There are currently no LNG terminals in California, but several proposed for the West Coast, from Mexico to Oregon, would serve California’s demand. One near Ensenada, Mexico is already under construction by Sempra and Shell. As one LNG terminal would satisfy 15 to 20 percent of California’s gas demand, its contribution to climate change would be significant.

“The governor is pushing the energy equivalent of a Hummer down our throats,” said Bill Powers of the Border Power Plant Working Group, “whereas most Californians would prefer we invest in a Hybrid. That is, efficient use of our domestic natural gas supplies, and development of renewable energy.”

According to the letter, LNG imports would undermine the governor’s own aggressive goals for renewable energy, which include a 20 percent renewable mix by 2010. The letter points out that it’s unclear how this goal will be achieved, while an influx of LNG imports will have the effect of blindsiding renewable development. The letter also raises concerns that some of the same utilities that are charged by the state with investing in renewables, such as San Diego Gas and Electric, are owned by Sempra, a company that has a vested interest in importing LNG.

The letter calls on the governor to make an “executive decision,” calling for a thorough and transparent assessment of the impact of LNG on the state’s climate, the environment, the safety of coastal communities, and the economy.

The letter follows:

22 February 2006

Governor Arnold Schwarzenegger
State Capitol Building
Sacramento, CA 95814

CC:
Mike Chrisman, California Resources Agency
Joe Desmond, California Energy Commission
Alan Lloyd, Cal EPA
Michael Peevey, California Public Utilities Commission

Dear Governor Schwarzenegger,

Thank you for your commitment to reducing greenhouse gasses. If California is successful in attaining its greenhouse gas emission reduction goals, our state will set an example for the world to follow. We look forward to the day when aggressive actions like yours leads to a world where we can all breathe a little easier, and where our climate is stable and predictable.

In that regard, we welcome the state’s commitments to greenhouse gas (GHG) emissions as they are spelled out in the 2005 Integrated Energy Policy Report (IEPR), and detailed in the existing draft of the Climate Action Team Report. We also welcome the CPUC’s unanimous resolution that directs its staff to develop an investor-owned utility (IOU) greenhouse gas standard “that is no higher than the greenhouse gas emission levels of a combined-cycle natural gas turbine.” We agree that this is a realistic interim step on the road to an energy portfolio that includes a minimal amount of fossil fuels.

However, we are very concerned that there is a significant disconnect between these goals and current trends in our state’s energy policy. The CPUC, acting in concert with the California Energy Commission, is simultaneously working to make Liquefied Natural Gas (LNG) a major component of our state’s energy future. The goals of reducing GHG’s and importing LNG are contradictory. The process of extracting natural gas from foreign sources, transporting it to an export facility, liquefying it, transporting it thousands of miles overseas, and re-gasifying it in North America carries a heavy “energy penalty.” This translates directly into considerably higher GHG emissions associated with LNG production and delivery than with North American natural gas.

The entire process of bringing LNG to California adds between 18 and 40 percent of the greenhouse gasses into the atmosphere over what is now being emitted from our use of domestic natural gas. While the power plant that is the gas’ endpoint may burn efficiently, by the time the gas gets there it has already done significant damage to our atmosphere. Given that just one LNG terminal will satisfy about 15 to 20 percent of California’s gas demand, this is a significant additional source of GHG emissions. Thus, importing LNG is in direct contradiction to the CPUC’s resolution. We are surprised there is no mention of this looming threat in the current draft of the Climate Action Team Report.

In addition, we are concerned that allowing California’s utilities to commit to long-term contracts for LNG will have a negative impact on renewable energy initiatives. An influx of huge amounts of imported natural gas will be very hard for the renewable industry to compete with. As is reported in IEPR, the Renewable Portfolio Standard (RPS) is plagued with a lack of transparency and an uneven application of RPS targets. Because of this, we believe importing LNG will have the effect of blindsiding a renewable law that is lacking a clear structure. This problem is exacerbated by the fact that some utilities charged with implementing the RPS, such as SDG&E, are owned by Sempra Energy, which clearly has a vested interest in importing LNG.

According to a report published by the Hewlett Foundation, “No Reason to Wait,” California will miss its GHG reduction targets it has set for itself if current trends continue. We can change course by following the prescriptions in the report. As detailed in the report, we can also grow our economy by doing so. But importing LNG will most certainly be a setback to all of the state’s well-intentioned GHG reduction programs.

We ask that you make an executive decision calling for a thorough and transparent assessment of the impacts of LNG on our climate, our environment, the safety of our coastal communities, and our economy. We also ask that you order a halt to all negotiations between LNG providers and the state’s IOU’s until that assessment is completed. Several of us have made a similar request of the CPUC, which has been denied. We are appealing to you because we believe truly changing our state’s environmental course is part of the legacy you may like to be remembered for.

In the event that your office would like more information or would like to discuss this, please contact Rory Cox at Pacific Environment. Phone: 415/399-8850 x302, or rcox@pacificenvironment.org.

Sincerely,

David Gordon, Executive Director, Pacific Environment
Jim Metropulos, Legislative Representative, Sierra Club California
John Coequyt, Energy Policy Specialist, Greenpeace
Michael Brune, Executive Director, Rainforest Action Network
Tysom Slocum, Acting Director, Energy Program, Public Citizen
Susan Jordan, Director, California Coastal Protection Network
Tom Kelly, Director, Kyoto USA
Kassie R. Siegel, Climate, Air, and Energy Program Director, Center for Biological Diversity
Linda Krop, Chief Counsel, Environmental Defense Center
Bill Powers, Chairman, Border Power Plant Working Group
Serge Dedina, Executive Director, Wildcoast
Atossa Soltani, Executive Director, Amazon Watch
Paul Fenn, Executive Director, Local Power
Jesse N. Marquez, Executive Director, Coalition For A Safe Environment
Tim McKay, Executive Director, Northcoast Environmental Center
Environmental Health Coalition, San Diego
Derrick Hindery, Ph.D., Lecturer, UCLA and USC Departments of Geography
Shirley Godwin, The Saviers Road Design Team (Oxnard)
Trevor Smith, Chair, Ventura LNG Task Force
Diana Mann, Founder, ECO-Link, Long Beach

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