BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1496
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   SB 1496 (Simitian) - As Amended:  May 25, 2012 

          Policy Committee:                             Natural 
          ResourcesVote:6-2

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires the California Energy Commission (CEC) to 
          conduct, update and publish specified assessments of liquefied 
          natural gas (LNG) and requires specific analysis be included in 
          an environmental impact report (EIR) for an onshore or offshore 
          LNG terminal in California.  

           FISCAL EFFECT  

          CEC reports cost to implement this bill would be minor and 
          absorbable because the bill codifies existing reporting 
          activities.  However, because the bill requires those reporting 
          activities, this analysis attributes the minor cost of those 
          reporting activities to the bill.  In any case, CEC expect costs 
          to be minor and absorbable.

           COMMENTS  

           1)Rationale  .  The author asserts that decisions regarding the 
            importation and exportation of liquefied natural gas should be 
            based on a comprehensive review of current and projected 
            natural gas supply and demand in California, alternatives to 
            natural gas importation and exportation and the environmental 
            effects of importation and exportation.

           2)Background.   LNG is natural gas in a liquid form. When natural 
            gas is cooled to minus 259 degrees Fahrenheit (minus 161 
            degrees Celsius), it becomes a clear, colorless, odorless 
            liquid. LNG is neither corrosive nor toxic.  According to the 
            U.S. Energy Information Agency, the United States, including 
            California, needs to consider developing additional supplies 








                                                                  SB 1496
                                                                  Page  2

            of natural gas to meet its growing demand. Because existing 
            North American supply basins are maturing, the U.S. will need 
            to rely more on new supplies including liquefied natural gas 
            and unconventional sources of natural gas such as shale and 
            coal bed methane. 

            California already imports 85 % of its natural gas supply from 
            these basins. Currently, the United States has five 
            LNG-receiving and regasification terminals, including one in 
            Puerto Rico, but no terminal is located on the West Coast. 
            Recently, however, a number of companies have proposed to 
            build LNG import facilities in California, at other locations 
            in the United States, and in Baja California, Mexico. 

           3)There is no support for or opposition to this bill.
           
           Analysis Prepared by  :    Jay Dickenson / APPR. / (916) 319-2081