CPUC Eyes LNG Policymaking

The California Public Utilities Commission is poised to open a rulemaking to examine proposals to shore up dwindling and increasingly expensive traditional natural gas supplies. The commission?s move to look at liquefied natural gas (LNG) proposals marks a big step toward embracing a resource that could provide a huge infusion of gas?while raising thorny oversight questions. Putting LNG proposals on the table ?raises a raft of jurisdictional? health, safety, and environmental issues, said commissioner Carl Wood. For instance, he noted that while the huge Sempra/Royal Dutch Shell LNG project in Baja California is not under the CPUC?s direct oversight, any supplies fed into Southern California Gas?s pipelines are ?of interest to us? and would likely come under the CPUC?s purview. The terminal is expected to supply about 1 billion cubic feet of natural gas a day and come on line in 2007. In another example, the Sound Energy Solutions/Mitsubishi LNG project in Long Beach raises the question of whether the city of Long Beach or the CPUC will be the lead agent for environmental review. At the same time, Wood said looking at LNG is consistent with the commission?s integrated resource planning approach?an approach stressing a diverse supply mix to, among other things, lessen reliance on markets. Another regulatory body, the California Energy Commission, has also expressed increasing interest in LNG. The CEC has been compiling data on the fuel. In late December, it initiated a new section of its Web site devoted to LNG. The state Coastal Commission, Lands Commission, and Department of Fish & Game also have regulatory authority over LNG.

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CPUC Eyes LNG Policymaking

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