Sophie?s (& Sempra?s) Choice

?Sophie?s choice?: Which child to save and which to sacrifice. Sempra faces a momentous, albeit impersonal, version of Sophie?s choice. It is about to choose which corporate mouth to deprive of the necessary infusion of billions of dollars because it won?t be able to feed two at once. Which ?child? of the parent company to choose probably includes an estimation of which is uglier, dirtier, and the cause of more social problems?although both Sempra?s liquefied natural gas company and its generation (coal) company could be considered societal brats. One part of the company has a nicely tasseled and highly polished foothold in liquefied natural gas (LNG) development in Alaska, which could allow it to send gas to California pipelines and gas-fired plants. Choosing this option would involve building expensive infrastructure?including on- or offshore receiving terminals along the state?s coast to import the gas. Sempra?s other corporate boot is busy kicking up coal dust. In addition to two coal plants in Texas?it owns a 305 MW coal plant and has half ownership in the 632 MW Coleto Creek plant, with Carlyle/Riverside?it is also attempting to build a new 1,400 MW coal-fired plant in Gerlach, Nevada. If the Nevada plant works, I understand that will be the beginning of a commitment from the company to send more coal-fueled power to California. While it might be imported across state lines, I can?t wish that phlegmatic, occluded Dickensian future on other states in order to feed California?s energy thirst. New coal plants will probably cost as much as LNG terminals, about $600 million to $700 million. However, the costs of neither LNG nor coal include potential costs of security, insurance, or environmental reparations. Those costs are unknown until they hit, far down the time line, or are purposely hidden by national security. Given the sunshine in its territory, I?d like to think the company would invest wisely in renewables, but it is not doing so. I?d also like to think that Sempra has some environmental and societal squeamishness about the choice before it. Elsewhere, the company won?t touch further investment in nuclear via San Onofre, with the risk of ever-increasing radioactive wastes and attendant risks. It also promotes clean vehicle power (by natural gas, sold by Sempra's subsidiaries). Alas, renewables are not in Sempra?s mindset. Instead, the company?s launched itself down the fossil trails, and while Sempra?s LNG and generation (coal) subsidiaries would like to keep their corporate feet strutting down both paths, the company will probably be unable to move ahead on two fronts because Wall Street can?t provide dual financing. Maybe Sempra can squeeze $3 billion to $5 billion out of capital markets for one or the other, but not $10 billion for both energy strategies. While having a foot on both paths, ?Sempra?s choice? was steered toward LNG at the end of last year by the unctuous actions of Congress. Alaskan LNG exploitation got $20 billion in federal loan guarantees. That means that developers can go whole hog without risk in big construction projects they will need to fulfill the requirements for bringing North Slope gas to the lower 48. The construction project is so big that the pipelines are rumored to have the potential to use up the nation?s steel production. Plans include an 800-mile pipeline built to Canada to bring gas to Chicago. The proposal also includes pipelines to bring the gas to Valdez, Alaska, where it would be frozen and shipped on tankers to the West Coast. Plans could also include both versions with a ?Y? pipeline configuration. In the Military Construction Appropriations Bill, Alaskan LNG development would require the government to pick up 80 percent of the cost of the first $18 billion invested in the project if not completed. This guarantee, however, may or may not extend to an LNG liquefaction project. That bill also intends to speed up LNG exploitation by streamlining siting, with the Federal Energy Regulatory Commission as the lead agency. In another addition to Alaskan LNG utilization, the Foreign Earnings Tax Bill included tax incentives for Alaska LNG developers. Yet another $2 billion in loan guarantees surfaced in the omnibus appropriations bill to be used for an LNG terminal to send gas to the lower 48. While the federal government provides tons of subsidies for other kinds of energy developments, the $20 billion loan guarantee is a luring siren song to move Sempra?s hand in choosing its favorite ?child.? Sempra still has to consider environmental responsibilities and costs in its choice. I?m not clouding the choice with international LNG: I?m talking only about either domestic coal or domestic LNG. This LNG strategy under consideration has enormous environmental impacts. It includes about 800 miles of pipeline as well as the gas-bed drilling. With terminals in or near California, there are also marine and other local environmental and accident contingencies to take into account. Coal, too, is far from pretty. Mines devastate the landscape, the water, and miners? health. The fallout from emissions carried through waterways and into oceans accumulates in fish, which in turn affects consumers. Air pollution is another consideration. While LNG?s emissions from modern power plants are relatively clean, coal is anything but. Although those in Washington, D.C., think Californians accept pollution in other states as long as the environmental havoc is not in their backyards, it?s not a comfortable or tenable position for California lawmakers to take. But there is a possibility, albeit a stretch, that politicians and the California populace will turn a blind eye to pollution from coal-fired plants in, say, Nevada, as long as it doesn?t blow over the Sierra Nevada. There?s also the choice of the path of least political resistance. The coal choice will no doubt foster local opposition. For instance, Nevada politicians dislike their state being the sacrifice zone for energy development elsewhere. Local Nevadans recently showed their dismay with Sempra?s plans to build a coal plant when a bunch of ?em pulled up in their pickup trucks at a recent Sempra town hall gathering in Gerlach to unload a batch of coal and feebly light it up in front of the meeting place in protest. On the other hand, Alaska politicians are cheerleading, cocktailing, and raffling off gas drilling and shipping out of their state. If I were Sophie/Sempra, I?d sadly pick LNG, the lesser evil of the two brats. I am glad it?s not my choice.

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Sophie?s (& Sempra?s) Choice

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