Secure Natural Gas Deemed Essential to State?s Economy

Ensuring the quality and security of natural gas supplies is critical to the state?s energy future, warned utility representatives participating in a February 17 workshop held by state regulators. The California Energy Commission and the California Public Utilities Commission convened a joint workshop on natural gas quality standards with the California Air Resources Board (CARB) and the California Department of Conservation?s Division of Oil, Gas, and Geothermal Resources to assess whether to revise the state?s natural gas quality specifications. Maintaining natural gas quality is critical to ensuring that the state?s power plants and vehicles operate in compliance with air-quality regulations, said Richard Meyers, a natural gas supervisor in the CPUC?s Energy Division. Yet state officials also need to ensure that California has adequate gas supplies from in-state and out-of-state producers, including from liquefied natural gas suppliers, he stressed. Pacific Gas & Electric is ?very concerned? about the security of a long-term supply of LNG and performance problems, including carbon dioxide emissions, safety, and customer dissatisfaction, said Joe Bronner, a PG&E official. PG&E currently blends its natural gas supply to serve its 4.5 million gas customers. It has, however, determined that it won?t be possible to blend LNG because it is not compatible with other gas sources. ?Any gas composition has to be interchangeable to ensure competition among gas suppliers,? Bronner stressed. PG&E has called on the Natural Gas Council to adopt a national interchangeability protocol as a guideline for rules ensuring that all gas supplies?including LNG?are safe and won?t increase air pollution. ?We believe you can set a broad-ranging national standard that is compatible with California that accommodates most everybody?s needs,? Bonner added. The Air Resources Board has focused on vehicle emissions, but its fuel specifications affect emissions from power plants and other stationary sources. ?The Air Resources Board is willing to be flexible so long as quality isn?t affected,? said CARB?s Dean Sommers. The air board?s emissions standards have not caused any interruptions in delivery of Southern California Gas?s gas supply, said Lee Stewart, senior vice-president, gas transmission for Sempra Energy Utilities. The utility has been studying natural gas quality for the past two years because it expects to import new gas supplies, including LNG, to serve its 5.8 million customers. With demand for natural gas surging to fuel power plants and factories, to run low-emissions vehicles, and for heating, gas producers, utilities, and state regulators must work together to ensure that California has a reliable long-term supply of high-quality, safe, and clean natural gas, agreed the stakeholders. Currently, 85 percent of California?s natural gas supply is imported into the state through interstate pipelines. Just 15 percent is produced in-state, predominantly in conjunction with crude oil production. Joe Sparano, representing the California Independent Petroleum Association, and other petroleum industry officials took aim at CARB?s standards for compressed natural gas as a motor vehicle fuel. They warned that California could face a shortage of natural gas if regulators fail to ease the state?s tough environmental regulations. ?We need to maximize in-state production, increase flexibility to bring in interstate supplies, and figure out a way to bring LNG in to increase gas supplies,? according to Sparano.

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Secure Natural Gas Deemed Essential to State?s Economy

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