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

does.

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

and Oklahoma.

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

Australia.

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

importing plants.

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

Arabia.

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

from elsewhere.

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

imports.

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.