Transcript The Case Against Liquefied Natural Gas in Oregon

The Case Against
Liquefied Natural Gas in
Oregon
Rory Cox
California Program Director
Pacific Environment
www.pacificenvironment.org
Map of Western States Natural Gas
Pipelines
Electricity Generation
California, 2004
Data from California
Energy Commission
Oregon, 2003
Oregon Department of
Energy, Biennial Energy
Plan
Natural Gas Consumption, Western
States, December 2005
250,000
200,000
150,000
Million cubic feet
100,000
50,000
0
California
Oregon
Idaho
Washington
Nevada
Source: Energy Information Agency, U.S. Dept. of
Energy.
What is Liquefied Natural Gas?
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Natural gas is extracted through
underground drilling overseas.
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Chilled to -260 degrees Fahrenheit.
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Moved in huge tankers across the
ocean.
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Re-gasified at coastal import
terminals.
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Sent into gas grid, or to electrical
power plant.
Proposed Liquefied Natural Gas
Terminals
Source: California Energy Commission
Industry Claims About LNG
“North America's demand for natural gas is growing, yet production in
the lower 48 of the United States is decreasing. “
-Sempra Energy
 “(LNG is) reliable and clean fuel to protect the environment.”
– BHP Billiton
 “The LNG industry has one of the best safety records in the energy
business.”
– Chevron-Texaco
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Sempra and Shell’s proposed Costa Azul project, Baja
California (now under construction
A Tale of Two Graphs
Source: Energy Information
Agency, U.S. Department of
Energy
Source: Sempra Energy
Is There a Real Demand for
Additional LNG in the U.S.?
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What the Department of Energy says:
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U.S. domestic production will increase by About
20% from 2001 to 2025, in response to 1.8% per
year assumed growth rate in demand;
Canadian imports will fluctuate, though remain
relatively constant from 2001 to 2025;
Primary growth area is electric power production.
Similar scenarios repeated in industry press, and by
Wall Street analysts.
The Fictional Shortage of ‘05
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December ’05 – ’06: Gas Prices Hit $16 per
MMBTU
Utilities Blame Hurricanes, Tight Supplies
March ’06 Mid-Western Attorneys General
Report: Prices Driven Complex, Deregulated
Market, NOT Shortages.
Spring ’06: Gas Storage is at Record Highs, Price
Tumbles to about $6.
Is There a Real Demand for LNG in
California?
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Synapse Energy Economics:
Future demand can be met
through conservation and new
renewable energy sources.
CEC: Efficiency can save
20,000 GWh per year by 2013;
Renewables 55,000 GWh per
year by 2010.
These two are roughly
equivalent to the output of two
LNG terminals.
CA Energy Action Plan
prioritizes clean energy and
conservation.
CA Political Climate Favors
Clean Energy, but industry
spending over $5 million on
lobbying and PR effort.
Does LNG Protect the Environment?
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Sakhalin, Russia: Largest Integrated Oil and
Gas Project in the World.
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Largest LNG Export terminal in the
World.
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Western Pacific Gray Whale: less than 100
remaining.
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Impacts of offshore drilling: Noise,
Drilling Muds, Danger of Oil Spills
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Pipeline Crossings Impact Salmon Survival
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Dumping of Wastes Endangers Rich Local
Fisheries in Aniva Bay
Dredging Fisheries-Rich Aniva Bay
Social Unrest in Sakhalin
Protest outside LNG plant
construction site, February
2006
Indigenous peoples’
protest, northern
Sakhalin, January 2005
Social and Environmental Standards
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European Bank for Reconstruction and
Development acknowledged that Sakhalin-II has
violated its standards
Reports demonstrate that Sakhalin-II violates
Equator Principles (voluntary social and
environmental guidelines for project finance
banks)
Does LNG Protect the Environment?
Impacts on Climate
 Gas pipeline leaks common, 2.3% of gas lost.
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18 to 22 % of methane lost in extraction,
liquefaction, shipping, and re-gasification.
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CO2 Emitted from LNG tankers.
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Methane: Warms planet 20 times greater than
CO2.
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Burning Natural Gas at power plant emits CO2.
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Cumulative impact: LNG is only a marginal
improvement over burning coal or oil.
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IPCC: In 1995, said GHG’s must be cut by 70%
in 100 years. Now some members saying that
must be accelerated to 10 years.
Is LNG Safe?
•Sandia Study 2004: Attack on
LNG facility could cause major
injuries within 1/3 of a mile; 2nd
degree burns more than one
mile away.
•Richard Clarke: LNG Tankers
are known terrorist targets.
•Skikda, Algeria: At least 26
killed, windows shattered up to
7 miles away in 2004 accident.
•LNG liquefaction facility built by
Halliburton.
Skikda, Algeria, January 2004
LNG: Consumers Pay the Price
•LNG Investment Dependent on Long Term, Ratebased Contracts With Utilities.
•Cost of Infrastructure Passed on to Ratepayers.
•Cost of Foreign Extraction Passed on to Taxpayers
Through Export Credit Agencies.
•September 2004: California Public Utilities
Commission Approved Sempra’s Request for Rate
Basing of Baja Project.
•Construction Began Soon After.
Sempra’s Costa Azul project,
Dec. 2005
LNG = Higher Utility Bills
NG vs. LNG US prices
•LNG prices have risen
$6.00
$5.00
$4.00
NG
LNG
$3.00
$2.00
$1.00
$0.00
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•Global Competition from China,
India, Europe will Drive up Cost.
$7.00
Price ($)
•LNG More Expensive than
domestic gas.
Year
Source: Community
Environmental Council
LNG
When Will the Bridge Be Done?
“…I call for the use
of methane as the
transitional fuel, the
bridging fuel between
our dependence on
fossil fuel and moving
to solar energy.”
Barry Commoner, 1989
(17 Years Ago)
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