U.S. Senate Vets Natural Gas Future

By Published On: August 1, 2008

What California legislators and regulators have known for years was the subject of a July 30 hearing at the U.S capital. Natural gas is “finite” and a “contributor to global warming,” said Representative Ed Markey (D-MA) during a U.S. House Select Committee on Energy Independence and Global Warming hearing. Decoupling profit from sales of natural gas should be implemented, according to Earl Blumenauer (D-OR). In California, rates are set not on the amount of sales, but the amount of capital expense. California has had a decoupling mechanism in place for decades. Liquefied natural gas also came up at the hearing. While recognizing that imported LNG cannot replace domestic supplies, Clay Harris, chief executive officer, Suez LNG, noted that it is a growing supply for the East Coast. In California, liquefied natural gas terminals have, so far, been rebuffed. Sempra, however, has a terminal in Baja California, Mexico. Harris noted the “pathology” of obtaining liquefied natural gas from countries with international trade problems and internal political turmoil. Given the current high fuel prices, stakeholders continued to press legislators for repealing the ban on offshore drilling, which would allow not only oil, but gas development off California’s coast.

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