South Coast Air District Cleanup Plan Would Boost LNG

By Published On: October 13, 2006

California’s reliance on natural gas would rise dramatically under a proposal to convert half the state’s diesel-powered vehicles to synthetic fuel made from natural gas. The draft plan by the South Coast Air Quality Management District released October 10 aims to help clear the cloud of smog and particles that hovers over the Los Angeles region’s 16.5 million people. “We need a no-holds-barred campaign to meet the formidable challenge of achieving clean air,” said Barry Wallerstein, the agency’s executive director, in releasing the draft 2007 Air Quality Management Plan. Producing the synthetic fuel blend known as Fischer-Tropsch diesel would require 0.9 bcfd of natural gas. The new fuel requirement would increase California’s dependence on foreign natural gas because domestic sources are dwindling. California currently consumes 5.7 bcfd of natural gas, according to the California Energy Commission. Should the synthetic diesel replacement fuel be made here, the state would have to increase its natural gas usage by 16 percent, an amount equivalent to the total processing capacity of one of the LNG terminals planned along Southern California’s coast. In the plan, SCAQMD urged the state air board to require the changeover from petroleum-based diesel to the natural gas-based synthetic fuel in as little as four years. It is but one of many measures in the district’s new clean-air plan that would set new requirements for the energy industry. It is unknown whether the synthetic diesel fuel would be made here or imported as a liquid fuel. However, Sasol, a South Africa-based maker of synthetic fuel, is ready to make the fuel in Qatar and market it under a joint arrangement with Chevron. Spokespeople for neither company could be reached for comment. Sasol has made the synthetic fuel through the Fischer-Tropsch process for years and is planning another plant in Nigeria, which has an abundance of gas. The Fischer-Tropsch process converts natural gas into a form of diesel fuel that burns cleaner because it has a minuscule amount of sulfur compared to petroleum-based diesel. It also has a higher level of cetane, the equivalent of a higher gasoline octane rating, which burns cleaner. SCAQMD plans to hold hearings on its new draft plan this fall and have its board adopt it sometime next spring, said Sam Atwood, agency spokesperson. The latest plan will update the air district’s 2003 plan. After adoption, SCAQMD and the state air board must adopt binding regulations for businesses, motorists, municipal governments, and consumers. The multivolume plan is packed with scores of measures SCAQMD air regulators say must be carried out to reduce pollution in and around Los Angeles. Among the measures affecting the energy industry are ones that would “shave” allowable emissions of sulfur oxides under the air district’s emissions trading program, known as RECLAIM, the Regional Clean Air Incentives Market. The shave would be adopted as early as next year and would cut total allowable emissions of sulfur oxides from businesses by 3 tons per day under the program from today’s 12 tons, according to Samantha Unger, Evolution Markets broker. The firm is a brokerage for air credits traded under the air district’s RECLAIM program. The air district may later shave allowable emissions of nitrogen oxides under the emissions trading program too, she said. Both pollutants are emitted by power plants. The reductions are needed to help reduce the level of fine particulates in the air. In another major development in the Los Angeles air-quality arena, the district also pledged to expand its emissions trading program to allow power plant operators and other stationary sources to earn credits by paying to reduce emissions from vehicles and other mobile sources of air pollution. SCAQMD also might offer credits to companies that invest in renewable energy projects instead of fossil-fuel projects. The air district envisions that businesses could use these credits to offset emissions from new or expanded plants, as well as to meet operational emissions limits. The district also outlined measures to: • Have the state air resources board require that 50 percent of the new cars sold within SCAQMD’s jurisdiction be classified as advanced technology partial zero emissions vehicles – ATPZEVs. Plug-in hybrid vehicles are a prime example of an ATPZEV (see related story on page 5). • Set natural gas fuel specifications that will reduce pollution. • Combat the urban heat-island effect by requiring cool roofs and tree planting. • Provide incentives for energy efficiency in new buildings above and beyond what the state requires. • Place conditions on new developments to reduce energy use and resulting air pollution, perhaps including fees that would be used to fund clean-air projects. SCAQMD said it would unveil additional contingency measures before the plan is adopted. The district also will ask the federal Environmental Protection Agency to downgrade the classification of air quality in the region from severely to extremely polluted. This will allow the air district to incorporate “black box” measures into its plan to show it can meet air quality health standards. These measures rely on yet unproven technology, such as fuel cell vehicles. The air district must reduce major smog-forming pollutants by more than 50 percent to meet federal air quality health standards. Under the federal Clean Air Act, it must meet the standard for particle pollution by 2015 and for ozone by 2021. – William J. Kelly

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