The Case Against Liquefied Natural Gas in Oregon Rory Cox California Program Director Pacific Environment

Map of Western States Natural Gas Pipelines

Electricity Generation California, 2004Oregon, 2003 Data from California Energy Commission Oregon Department of Energy, Biennial Energy Plan

Natural Gas Consumption, Western States, December 2005 IdahoNevada Source: Energy Information Agency, U.S. Dept. of Energy.

What is Liquefied Natural Gas? Natural gas is extracted through underground drilling overseas. Natural gas is extracted through underground drilling overseas. Chilled to -260 degrees Fahrenheit. Chilled to -260 degrees Fahrenheit. Moved in huge tankers across the ocean. Moved in huge tankers across the ocean. Re-gasified at coastal import terminals. Re-gasified at coastal import terminals. Sent into gas grid, or to electrical power plant. 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 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.? What the Department of Energy says: What the Department of Energy says: 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; 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; Canadian imports will fluctuate, though remain relatively constant from 2001 to 2025; Primary growth area is electric power production. Primary growth area is electric power production. Similar scenarios repeated in industry press, and by Wall Street analysts. Similar scenarios repeated in industry press, and by Wall Street analysts.

The Fictional Shortage of ‘05 December ’05 – ’06: Gas Prices Hit $16 per MMBTU December ’05 – ’06: Gas Prices Hit $16 per MMBTU Utilities Blame Hurricanes, Tight Supplies Utilities Blame Hurricanes, Tight Supplies March ’06 Mid-Western Attorneys General Report: Prices Driven Complex, Deregulated Market, NOT Shortages. 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. Spring ’06: Gas Storage is at Record Highs, Price Tumbles to about $6.

Is There a Real Demand for LNG in California? Synapse Energy Economics: Future demand can be met through conservation and new renewable energy sources. 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 CEC: Efficiency can save 20,000 GWh per year by 2013; Renewables 55,000 GWh per year by These two are roughly equivalent to the output of two LNG terminals. These two are roughly equivalent to the output of two LNG terminals. CA Energy Action Plan prioritizes clean energy and conservation. 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. CA Political Climate Favors Clean Energy, but industry spending over $5 million on lobbying and PR effort.

Does LNG Protect the Environment? Sakhalin, Russia: Largest Integrated Oil and Gas Project in the World. Sakhalin, Russia: Largest Integrated Oil and Gas Project in the World. Largest LNG Export terminal in the World. Largest LNG Export terminal in the World. Western Pacific Gray Whale: less than 100 remaining. Western Pacific Gray Whale: less than 100 remaining. Impacts of offshore drilling: Noise, Drilling Muds, Danger of Oil Spills Impacts of offshore drilling: Noise, Drilling Muds, Danger of Oil Spills Pipeline Crossings Impact Salmon Survival Pipeline Crossings Impact Salmon Survival Dumping of Wastes Endangers Rich Local Fisheries in Aniva Bay Dumping of Wastes Endangers Rich Local Fisheries in Aniva Bay

Dredging Fisheries-Rich Aniva Bay

Social Unrest in Sakhalin Indigenous peoples’ protest, northern Sakhalin, January 2005 Protest outside LNG plant construction site, February 2006

Social and Environmental Standards European Bank for Reconstruction and Development acknowledged that Sakhalin-II has violated its standards 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) 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. Gas pipeline leaks common, 2.3% of gas lost. 18 to 22 % of methane lost in extraction, liquefaction, shipping, and re-gasification. 18 to 22 % of methane lost in extraction, liquefaction, shipping, and re-gasification. CO2 Emitted from LNG tankers. CO2 Emitted from LNG tankers. Methane: Warms planet 20 times greater than CO2. Methane: Warms planet 20 times greater than CO2. Burning Natural Gas at power plant emits CO2. Burning Natural Gas at power plant emits CO2. Cumulative impact: LNG is only a marginal improvement over burning coal or oil. Cumulative impact: LNG is only a marginal improvement over burning coal or oil. 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. 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; 2 nd 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, Rate- based 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 LNG More Expensive than domestic gas. Global Competition from China, India, Europe will Drive up Cost. LNG prices have risen 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.” “…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)