(Excerpt from "Collision Course: How Imported Liquefied Natural Gas Will Undermine Energy in California" by Rory Cox and Robert Freehling) 

California’s energy policies and markets bring natural gas and renewables into direct competition. Importing LNG would bring a flood of new natural gas into the state, and it would limit development of clean energy sources.  Billions of dollars that should be going on building a clean energy grid for California will instead be squandered on an extensive, new fossil fuel infrastructure.

Production of electricity stands at the forefront of this dynamic, since half of the natural gas in the state is used for electricity generation, making electricity generation by far the largest consumer of natural gas fuel.  California’s electricity is derived from power plants burning natural gas and coal, large hydroelectric dams, and nuclear power. Renewables – primarily solar, wind, and geothermal energy -- comprise eleven percent of the electric energy pie, as of 2005 (see graph below.)

To understand the competition between LNG and renewables, it is important to also look at other sources of electricity.

Nuclear Energy in California:California derives 13 percent of its electricity from nuclear energy, significantly less than the national average of 19 percent. Due to numerous problems, including high repair bills, earthquake risks, and a near meltdown, five nuclear generating units that formerly produced nearly 1500 megawatts of power in the U.S. have been closed. This leaves two large nuclear power plants in California, and a portion of a large plant in Arizona, that contribute to the state’s electric supply.

Pursuing California’s commitment to clean energy, including the 33 percent share of renewables that is the state’s policy, the planned billion dollars per year investment in improving efficiency in the electric sector, the California Solar Initiative, as well as expanding cogeneration, will allow for a phase down of nuclear power in the future, while also scaling back the use of fossil fuels.

Hydropower in California: The state is committed to electricity derived from large hydropower projects because of the infrastructure investments already made to build the dams decades ago,  and because it is a relatively inexpensive source of energy. Other than a few controversial hydro projects such as the Hetch Hetchy dam and those along the Klamath River with low generating capacity, there is no serious movement to decommission the large dams the state is now using for 19 percent of its electricity.

In addition, there is evidence that decommissioning of theses dams will have little effect on total energy supplies. One report showed how 90 percent of electric generation could be maintained from Hetch Hetchy power houses, even if Hetch Hetchy Dam is dismantled.[1]The Klamath decommissioning would result in the loss of 200 megawatts of power, located in Oregon. This compares with over 14,000 megawatts of hydroelectric capacity in California. Nevertheless, growing energy demand and the effect of climate change may reduce the role of conventional hydroelectricity. Our model projects this source of electric power to fall from 19 percent to 15 percent of total supply.

LNG will not Displace Coal in California:. Some argue that the state needs LNG in order to phase out reliance on coal. But this argument has several shortcomings. California only gets 16 percent of its electricity from coal, compared to 50 percent for the U.S. as a whole. The electricity the state does derive from out of state coal is often contracted on a long-term basis. According to a new law, new long term coal contracts must supply sources that do not exceed carbon dioxide emissions from natural gas power plants established by the California Energy Commission; the limit is 1100 pounds of carbon dioxide per megawatt-hour generated. There is no existing coal combustion technology that can come close to this standard without sequestering significant amounts of carbon dioxide, and there is much controversy about whether this is even possible.

A study performed for the California Energy Commission by Lawrence Berkeley Laboratory in 2003 examined the effect of a 33 percent renewable standard on the need for natural gas power plants to meet the state’s electricity needs. They concluded that about 8000 megawatts of existing natural gas plants would need to be eliminated.[2]

Source: Lawrence Berkeley Laboratory

The first bar on the left (in the graph above) indicates that California’s natural gas electric generation capacity in 2003 was 32.1 gigawatts. As illustrated by the “Higher Renewables” scenario, if a 33 percent renewable standard is adopted by 2030, only 24.3 gigawatts of gas-fired generation power plants would be needed. This reduction in natural gas electric generation capacity would eliminate 20 large power plants. Lawrence Berkeley Laboratory’s report gave the state an additional decade to accomplish the 33 percent green energy target.

A report by the Community Environmental Council concluded that California could dramatically reduce natural gas usage, “just by following plans that the state and the utilities already have in place.” The Council concludes that clean energy efforts in California can produce the energy equivalent of 133 percent to 381 percent of the projected additional gas demand by 2016. The high end of that range is the equivalent of about 2.5 LNG terminals.[3]

In a 2003 report, the California Energy Commission’s staff detailed how natural gas demand growth can be reduced, or even reversed, if achievable electric energy efficiency goals and the 20 percent by 2010 renewable legal requirements are met. These energy efficiency goals, set in 2003, total 7,000 GWh per year of savings from all energy efficiency programs by 2006, 13,000 GWh by 2008, and 30,000 GWh by 2013.[4]

According to an analysis of the Energy Commission’s study by Synapse Energy Economics, achieving the energy efficiency goals recommended by Energy Commission staff and accelerating the RPS to 20 percent by 2010, which is now California law, could reduce electricity usage in California in 2013 by an additional 25,000 GWh. Meeting these requirements would reduce the demand for natural gas for electricity production by about 155 Billion cubic feet per year.[5] This is roughly the production volume of one LNG terminal.

All of these reports envision an energy future with dramatically reduced fossil fuel dependence, while adding no new dependence on nuclear energy. Mitigating climate change requires California to choose between fossil fuels or clean energy. The nature of California’s energy portfolio only allows growth from one source, not both.

If We Do the Right Thing: Future California Clean Energy Portfolio