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PUC votes to allow LNG to flow from Baja into California
http://www.signonsandiego.com/news/state/20040902-1639-ca-li...
By Terence Chea
September 2, 2004
SAN FRANCISCO ? The state Public Utilities Commission voted Thursday to permit the shipment of liquefied natural gas from Mexico into the United
States through California pipelines, a decision that backers say will increase the state's fuel supplies and lower energy costs for consumers.
Despite opposition from environmentalists, the commissioners voted 3-2 to allow the creation of border access points, where LNG could flow from
Mexican to U.S. pipelines for use in California and other Western states. The PUC rejected a proposal to delay the vote so the economic and
environmental effects could be studied.
"We're experiencing the high prices of natural gas constraints today. We don't have a moment to lose in addressing this threat," Commissioner Susan
Kennedy said at Thursday's meeting in San Francisco. "These high prices are hurting residences and businesses of all sizes."
But Commissioner Loretta Lynch, who wanted to delay the vote, said the commission's rushed the decision without studying how much natural gas the
state needed.
"We were willfully blind," Lynch said. "We decided that we didn't need any evidence before we made the rate payers pay for all sorts of natural gas."
LNG, a super cooled natural gas, carries advantages in cost and increased transportation capacity, but its extreme volatility has raised safety
concerns. In January, 27 people were killed by explosion at an Algerian LNG plant.
Despite those concerns, several companies are considering establishing LNG facilities for the fuel in California.
Sempra Energy and Shell have secured Mexico's approval to construct a new plant at Costa Azul, about 55 miles south of the border, to process up to 1
billion cubic feet of liquefied natural gas daily when it opens in 2007.
Some of that output would go to California, which typically uses 5 billion to 6 billion cubic feet of natural gas daily for generating electricity,
heating homes, and other uses.
Thursday's decision will allow California to boost its natural gas capacity by about 10 percent, or 500 million cubic feet, said Brian Prusnek,
Kennedy's energy adviser.
Sempra spokesman Art Larson said Thursday that the decision "provides California's natural gas customers the ability to tap into a significant and
competitively priced future source of energy."
Critics say LNG generates air pollution and poses safety risk at facilities in the event of earthquakes or terrorist attacks. A recent Greenpeace
report said LNG releases carbon dioxide that contributes to global warming and is less efficient than alternative fuel sources such as wind and solar
energy.
"Our fear is that this puts California's commitment to renewable energy and energy efficiency at risk," John Coequyt, a Greenpeace energy policy
specialist, said Thursday. "The state is basically promoting a technology in LNG that's unsafe, unnecessary and bad for the environment."
Sempra has agreed to pay the cost of upgrading infrastructure to link the Mexican supply with pipelines owned by San Diego Gas and Electric Co. and
Southern California Gas Co. But it will ask the PUC later for permission to pass on the expense to rate payers.
Thursday's decision will allow the two utilities to establish access points for LNG near Long Beach, Ventura, Otay Mesa and possibly other sites. The
two utilities currently pipe in natural gas from New Mexico, Texas and other Western states.
Having access to LNG from Mexico will allow the utilities to diversify their energy supplies and boost reliability and cost-savings for customers,
said Rick Morrow, vice president of customer service for the utilities.
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Dave
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"LNG, a super cooled natural gas, carries advantages in cost and increased transportation capacity, but its extreme volatility has raised safety
concerns. In January, 27 people were killed by explosion at an Algerian LNG plant."
B.S.
The plant in Algeria was liquefaction. Once NG is liquified it is relatively benign. It is in fact, non-volatile.
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