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Liquefied natural gas has yet to become a major factor in California’s energy supply picture more than five years after energy companies proposed a spate of import terminals up and down the west coast. Heading into the fall, most of the proposed terminals are tied up in the permitting process and though Sempra Energy has completed its Costa Azul terminal in Baja California, Mexico, it is not expected to begin receiving regular shipments until 2009. Californians apparently have not missed LNG much, because the lack of it has not resulted in higher gas prices, according to Susanne Garfield, California Energy Commission assistant executive director. Instead, she notes, that even with the delay in the arrival of LNG, the price of natural gas has gone down this summer due to increasing domestic production and new domestic discoveries of gas. The daily spot price of pipeline natural gas at the California border hovered around $8/MMBtu early this month as the state’s gas utilities continued to build inventories for the coming winter. However, LNG is set to come eventually. “We’re awaiting regular shipments from Tangguh, Indonesia,” said Art Larson, Sempra Energy spokesperson. “We’re anticipating that in the second quarter of next year.” Last spring, Costa Azul received a couple of inaugural shipments, but cannot begin receiving regular shipments from Indonesia until the Tangguh project is completed, Larson explained. The Baja California terminal also is contracted to allow Shell to import gas, although the company has yet to schedule any shipments. When gas does arrive, Larson said, Mexico would be the primary market, although pipeline interconnections would allow it to flow both to California and Arizona. A July 30 liquefied natural gas project status report by the California Energy Commission shows that federal authorities have stopped the permitting clock on two projects proposed off the coast of Southern California. During the time out, NorthernStar Natural Gas is busy answering 396 questions from the U.S. Coast Guard, which is the primary licensing agency for its Clearwater Port terminal proposed off the coast of Oxnard. Meanwhile, Woodside Energy is using the pause to answer a list of 61 Coast Guard questions about its proposed Ocean Way terminal slated off the coast of Los Angeles. Onshore projects proposed in Oregon are being licensed by the Federal Energy Regulatory Commission. They are progressing through the process, but could be slowed if a bill by Senator Ron Wyden (D-OR) becomes law. The measure, S 2822, would reverse a provision of the 2005 Energy Policy Act that gave FERC exclusive licensing authority over onshore liquefied natural gas terminals, returning lead authority to state and local jurisdictions instead. The bill is co-spsonsored by eight Senators including Democratic Presidential candidate Barack Obama (D-IL) and Senator Joe Lieberman (I-CT), who recently has been rumored as a running mate for Senator John McCain (R-AZ). More than 50 environmental organizations sent a letter to federal lawmakers August 4 calling for passage of the federal measure.

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