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Texas-Sized Energy Crisis Looms

Texas-Sized Energy Crisis Looms

While Californians happily debate how to spend the billions of dollars in excess revenues generated from last year’s stock market surge, the state is facing an energy crisis eerily similar to that of seven years ago. Only by this time, the pending shortages will be almost entirely of our own doing.

Seven years ago, California’s government overlooked a looming energy crisis when natural gas prices at the Arizona border soared, sending spot-market rates for electricity skyrocketing in what were then newly-deregulated San Diego markets. Because it only impacted a remote part of the California (ie not LA), the problem was widely overlooked – until the black-outs spread state-wide.

Since the Energy Crisis of 2000-01, California has permitted and built new generation capacity – with a heavy focus on clean energy. In fact, we’ve built enough generation using clean natural gas, solar, wind and other sources that we’re weaning ourselves from coal-burning generation in other states.

But these advancements are apparently not good enough for some. Seeking to demonstrate that it needs regulatory authority over mobile pollution sources (i.e. cars, trucks, etc), Southern California’s South Coast Air Quality Management District is proposing new, onerous provisions in its new Air Quality Management Proposal.

The worst of these proposals would limit the natural gas burned in Southern California to a “Wobbe” index of 1360. Current sources of natural gas have a Wobbe rating of 1400 or so, and the State Public Utilities Commission last year set a requirement of getting a Wobbe rating of 1385. Are you getting sleepy, yet? I am. Zzzzzz.

But dull statistics aside, what does this all mean? Practically speaking, it means that natural gas from California, the Rocky Mountains and liquefied natural gas would be verboten across Southern California and any territory served by Sempra Energy’s So Cal Gas Company because it wouldn’t meet our clean fuel requirements (the 1385 goal is more than 1360). And what is a primary source of electric generation for Southern California? You guessed it…natural gas!

Meanwhile in Texas – and it seems like every Californa energy nightmare story involves the phrase “meanwhile in Texas…” – the natural gas companies have created a front-group and hired John McCain’s Hollywood media team to launch an all-out assault on the coal industry. They like natural gas as well.

The so-called “Texas Clean Sky Coalition” is a natural gas front-group spending a million large to convince Texans to go the route of Californians and ban coal-fired electricity.

Now I understand why the President keeps talking about “clean coal.” There is no way that we can realistically wean ourselves from the fossil fuel in the near future without substituting it with something else. Obviously the kind gentlemen at Chesapeake Energy Corp and the other gas companies which are funding this Texas-based front group believe that their profits will increase if, all of a sudden, the second-largest state in the union suddenly switches to using their product to replace coal for electric generation. Imagine if the smaller states went along as well.

But somewhere, something will have to give. If California begins relying almost exclusively on Texas as a source for natural gas for electric generation, water heating and other needs (agricultural, for instance) what will happen when Texans decide they cannot afford to send it our way?

Something tells me they won’t share their precious resource with the same enthusiasm they’re now showing.