As the president of the California Public Utilities Commission from 2000 to 2005, Loretta Lynch was on the frontline of the state’s so-called “energy crisis.” Now, she sees a similar situation brewing, this time involving liquefied natural gas.
On Tuesday, June 20, Lynch presents “The Case Against LNG” at Café on A in the city of Oxnard, the possible future site — if Australian energy firm BHP Billiton gets what it wants — of a floating re-gasification terminal 14 miles off its coast. She spoke to The Reporter about why she believes LNG is bad for California.
Ventura County Reporter: Do you view the discussion in the state recently regarding the need for LNG as being comparable to the supposed energy crisis in 2000?
Loretta Lynch: It’s comparable in that the LNG discussions are going to lather on extra layers of unnecessary cost and extra layers of unnecessary failures of reliability. While it’s not the same systemic market problem, it’s a component of a market problem, and there’s just no need for it. Plus, it’s unsafe. It could certainly contribute to another energy crisis, this time financial, as well as a crisis in reliability.
Is LNG, in and of itself, a bad form of energy?
It is dead wrong to think LNG is better than any other fossil fuel. It is not. In fact, it’s worse than domestic natural gas because it’s hotter, meaning that it has a different chemical composition from North American natural gas, which will release more greenhouse gases into the atmosphere. In addition, creating a market for LNG where one is not necessary leads to increased prices, and once LNG has led to increased prices, then different kinds of coal-burning becomes economically equivalent. Far from being a substitute for coal, it will actually create a market for new coal plants.
What do you feel is the best way to serve California’s energy needs?
One is to re-power old plants so they don’t pollute as much and they don’t use as much natural gas. We can drop our natural gas demand anywhere from 12 to 20 percent just by re-powering existing natural gas plants. Number two, go renewable and go conservation. We have a lot of data that shows we can make significant gains in reducing our overall fuel use with conservation and in switching out to a cleaner and greener fuel use with renewable [sources of energy]. If you get those three things, we’d drastically drop our need for natural gas, and whatever natural gas we needed to fill the gap we could get easily from a North American supply.
Do you support State Bill 426, which would make it mandatory for a statewide needs assessment to be conducted before the state signs contracts with any company that wants to build an LNG plant in California?
It’s a necessary first step, and it’s a step that, until the energy crisis, California did routinely. They would not build something and lock the rate-payer in for 20 years of payment until it was determined by a factual analysis that something was needed. The energy crisis turned that planning on its head, and now the [Public Utilities Commission] is spending like drunken sailors. They’re buying anything that wiggles by them — and let me tell you, the LNG companies are doing a whole lot of wiggling in front of the PUC — without any kind of factual analysis of need. Four-twenty-six at least brings them up short and makes the drunken sailor face the reality of the next morning when the bill comes due.
If that bill were in affect today, would any of these companies’ projects be approved?
I don’t believe they would be, but let’s find that out. Why isn’t the PUC or any of these companies willing to have their theories about need tested by facts? The reason they don’t want their facts to be examined is because there’s nothing but fluff behind their supposed facts. They know that if we had factual analysis, the PUC’s political decisions to go ahead even though it’s not needed could then be challenged in court. But as long as there’s no clash of facts, the PUC can choose any theory they want. I may be wrong, but let’s at least test it. We deserve to go back to the system where your theory is tested by facts before you put the rate-payer’s checkbook on the line.