LNG will bring down California's energy costs

 

A precarious supply situation, increasing demand and a few unlucky events have combined to send energy rates on a steep uphill climb in the last year. This is bad news for East Bay businesses. But good news is on the horizon if our supply situation can be improved by the importation of liquefied natural gas, or LNG.

During the year 2005 natural gas rates for some firms rose 40 percent to 70 percent. Electricity rates moved in the same direction.

Business owners and managers are cutting expenses, delaying expenditures and otherwise trying to offset those high energy prices.

Some of the cuts might have lasting impact. A consultant for Bay Area cement manufacturer Hanson Permanente says the doubling of electricity costs since 2000 has driven away investment in that industry, meaning its days providing Bay Area jobs are numbered.

The high-tech companies in Alameda and Contra Costa Counties have similar concerns. Higher costs are slamming computer firms which require large amounts of energy for cooling server farms and other facilities.

Why are we in this situation? Part of the problem is that California is the 10th largest consumer of natural gas in the world, yet we produce only 13 percent of what we use. A large portion of that natural gas is used to fire generating plants that are producing 40 percent of the state's electricity. That means any hiccup in our supply system can raise prices and threaten electric system reliability.

Part of the answer is to increase our energy supply through LNG. By taking advantage of a large global supply of LNG, California can avoid gyrating prices and give businesses a more stable energy market.

LNG is natural gas that has been supercooled so it can be transported efficiently in specially equipped tankers. The LNG is delivered to terminals where it is offloaded and transformed back into a gaseous state for delivery through our existing pipeline system.

This is not new technology. LNG has been used safely around the world for more than four decades.

Proposals to build terminals on the Southern California coast are in various stages of an exhaustive and thorough review process. LNG imports there will benefit the entire state.

With California's current sources of natural gas dwindling, California decision makers need to hear from the business community that we support LNG and encourage importing it directly to our state.

Led by the California Manufacturers & Technology Association, Californians for Clean Affordable Safe Energy is working to inform the public of LNG's potential benefits to us all. Our 80 member organizations include representatives across the business spectrum as well as associations representing taxpayers, education, consumers, agriculture, local government and seniors.

Please join us in supporting LNG so we can bring downward pressure on energy prices and keep businesses healthy.

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Dorothy Rothrock is vice president of the California Manufacturers & Technology Association and chairwoman of Californians for Clean Affordable Safe Energy.

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