California could have three or more facilities receiving liquefied
natural gas (LNG) today, but for massive popular resistance to the prices and
possible dangers they might have brought. If those plants had been built, the
phenomenon of fracking would mean something very different than it now
Over the last 10 years, potential LNG sites were killed in locales as
varied as Humboldt Bay near Eureka, north San Diego County, Santa Monica Bay,
Ventura County and Long Beach.
As these were all proposed, Californians were told they faced the threat
of acute natural gas shortages, even though the state’s total gas consumption
remained steady even as population increased by about 3 million during the
century’s first decade.
So it became clear that if there were to be a shortage, it probably would
be the creation of the state Public Utilities Commission, which almost
inexplicably instructed the state’s big utilities to give up about one-third of
their longtime reserved quantities of natural gas coming from places like Texas
This never happened, as giving up that gas
was contingent on the import of LNG, natural gas converted into a sub-freezing
liquid, to be brought here by tanker from distant points like Indonesia and
Because of populist resistance, the multi-billion receiving plants and
their attendant fleet of equally pricey tankers do not now exist. But such
plants and ships were imposed on other parts of the country, most notably the
Gulf Coast and Eastern Seaboard.
Now many of those importing facilities are hastily being converted into
liquefaction plants that will soon export the ultra-cold and highly volatile gas
rather than bringing it in.
Even in places like Oregon and the coast of British Columbia, where three
sites have been targeted, spots originally seen by developers as ideal for
importing gas are now being pushed for exports. The Oregon facilities were
originally planned to be an end run around California’s rejection of LNG
All this sudden interest in exporting LNG to places like South Korea and
Japan, which now get most of their gas from Indonesia, is the result of fracking
in shale rock formations, which has created a vast surplus of natural gas in
America. Fracking involves blasting water, sand and chemicals deep into the
ground to loosen oil and gas bound into some kinds of rock.
In California, the U.S. Energy Information
Agency (EIA) estimates one geologic feature by itself – the Monterey Shale
formation – may hold a minimum of 15 billion barrels of crude oil and enough
natural gas to fuel this entire nation for as much as three years. How much is
15 billion barrels of oil? About one-tenth the known reserves in Saudi
If the gas in the Monterey formation alone were fully exploited and added
to what’s now being produced in places like Wyoming, West Virginia and North
Dakota, the United States could quickly become the world’s second leading
natural gas exporter.
The federal government is a big cheerleader in the fracking and LNG
export movement. A December EIA report claimed exporting LNG would have “large
net economic benefits in spite of higher domestic natural gas prices.” So the
government has admitted that exporting LNG will lead to higher gas prices in
America, even as it creates jobs.
But in part because there are no exporting and gasification facilities
here, California shale has not been fracked to nearly the extent similar
formations have in other states.
This has had several effects, positive and negative: It has kept safe
most drinking water aquifers – known to have been polluted by fracking in
Wyoming and West Virginia. There has also been less risk of setting off
earthquake faults, a possible fracking side effect that has yet to be either
verified or disproved.
On the minus side, California has not seen the kind of jobs boom that now
puts once-blighted North Dakota near the bottom of national rankings in
unemployment. The shale oil boom in that state’s badlands spurred the largest
employment boost in Dakota history, with tens of thousands of workers moving in
Parts of California that now suffer the state’s most severe unemployment,
most notably areas in the west San Joaquin Valley, could see huge growth if
fracking went big-time here. But the only way that’s likely to happen, given the
cost of the operation, is if California allows construction of LNG export plants
in the same sorts of areas once considered for liquid gas
As things now stand, the main market for California-produced natural gas
is right here in California. But gas piped in from other states remains cheaper
than gas from fracking, even if the fracking is nearby.
All of which means the state’s populist rejection of LNG imports during
the early and mid 2000s reverberates heavily today, and we’ll all have to stay
tuned to find out if that’s a good thing or not.
Copyright © 2011 by Santa Monica Mirror. All rights reserved.