California Legislature—2013–14 Regular Session

Assembly BillNo. 1257

Introduced by Assembly Member Bocanegra

February 22, 2013

An act to add Chapter 3.5 (commencing with Section 25250) to Division 15 of the Public Resources Code, relating to natural gas.


AB 1257, as introduced, Bocanegra. Energy: State Energy Resources Conservation and Development Commission: natural gas.

The Warren-Alquist State Energy Resources Conservation and Development Act (act) establishes the State Energy Resources Conservation and Development Commission (Energy Commission) and requires the commission to prepare a biennial integrated energy policy report containing specified information related to major energy trends and issues facing the state, as well as a biennial energy policy review. The act requires the commission to certify sufficient sites and related facilities that are required to provide a supply of electricity sufficient to accommodate projected demand for power statewide.

This bill would enact the Natural Gas Act and would require the Energy Commission, every 4 years, to prepare and submit to the Legislature a report containing specified information identifying strategies to maximize the benefits obtained from natural gas as an energy source, as specified. The bill would further require the Governor to review that report by a specific date and to report specific agreement or disagreement with, or modifications to, the report to the Legislature, and would declare the modified version of the report the natural gas policy of the state. This bill would also make legislative findings and declarations including, among other things, that it is the policy of the state to reduce greenhouse gas emissions and that an efficient and effective strategy for the use of natural gas has potential for helping to meet these objectives.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1


Chapter 3.5 (commencing with Section 25250)
2is added to Division 15 of the Public Resources Code, to read:


4Chapter  3.5. Natural Gas Act


6Article 1.  General Provisions




The legislature finds and declares all of the following:

9(a) It is the policy of the state to reduce greenhouse gas
10emissions and emissions of criteria pollutants while minimizing
11the potential cost of these efforts on the citizens of the state. State
12law specifically requires that greenhouse gas emissions targets be
13achieved “in a manner that minimizes costs and maximizes benefits
14for California’s economy.”

15(b) A June 2011 study by the Massachusetts Institute of
16Technology identified natural gas as “one of the most cost-effective
17means by which to maintain energy supplies while reducing CO2
18 emissions.” The MIT study found that “the current supply outlook
19for natural gas will contribute to greater competitiveness of U.S.
20manufacturing, while the use of more efficient technologies could
21offset increases in demand and provide cost-effective compliance
22with emerging environmental requirements.”

23(c) In April 2012, the President of the United States issued an
24executive order stating, among other things, that natural gas as an
25energy source “creates jobs and provides economic benefits to the
26entire domestic production supply chain, as well as to chemical
27and other manufacturers, who benefit from lower feedstock and
28 energy costs. By helping to power our transportation system,
29greater use of natural gas can also reduce our dependence on oil.”
30The President concluded, “For these reasons, it is vital that we
31take full advantage of our natural gas resources, while giving
32American families and communities confidence that natural and
P3    1cultural resources, air and water quality, and public health and
2safety will not be compromised.”

3(d) An efficient and effective strategy for the use of natural gas
4has potential for helping to meet the objectives described in
5subdivision (a).

6(e) Natural gas represents a flexible energy supply source for,
7among other things, heating, water heating, cooling, cooking,
8engine operation, and electric generation and provides a valuable
9complement to the development of renewable generation sources,
10particularly intermittent generating sources.

11(f) Natural gas represents an affordable and flexible supply
12source for transportation purposes, including both commercial and
13residential uses as a substitute for diesel and gasoline-fueled
14vehicles. In developing the State Alternative Fuels Plan, as part
15of implementation of Assembly Bill 1007, (Ch. 371, Stats. 2005),
16the commission and the State Air Resources Board assessed natural
17gas as part of a broad portfolio of alternative fuels the state should
18be pursuing, finding, among other things, that natural gas as a
19transportation fuel represented the most cost-effective alternative
20transportation fuel option for reducing greenhouse gas emissions
21through a study period extending to 2050.

22(g) California does not currently have a long-term strategy to
23maximize the benefits of natural gas as part of the state’s portfolio
24of energy sources in a low carbon future.



(a) By January 1, 2015, and every four years thereafter,
26notwithstanding section 10231.5, of the Government Code, the
27commission shall prepare and submit to the Legislature a report
28that identifies strategies to maximize the benefits obtained from
29natural gas as an energy source, helping the state realize the
30environmental and cost benefits afforded by natural gas. As part
31of this report, the commission, at minimum, shall identify strategies
32and options for each of the following:

33(1) Making the best use of natural gas as a transportation fuel,
34including for movement of freight, vessels, mass transit, and other
35commercial and passenger vehicle use and identifying methods to
36increase the development of natural gas refueling infrastructure.

37(2) Determining the optimal role of natural gas-fired generation
38as part of a resource portfolio, including, but not limited to,
39combined heat and power, and the impact of that role on meeting
40greenhouse gas targets.

P4    1(3) Taking the best advantage of natural gas as a low-emission
2and renewable resource, including potential zero and near-zero
3greenhouse gas emissions, natural gas, and biogas options, taking
4into account impact on electric system operations.

5(4) Optimizing the advantage of natural gas as a flexible and
6convenient end use energy source, including the efficient use of
7natural gas for heating, water heating, cooling, cooking, engine
8operation, and other end uses, and the optimization of appliances
9for these uses.

10(5) Identifying methods by which gas corporations can facilitate
11implementation of any of the strategies identified in the study.

12(6) Determining the extent to which a long-term policy is needed
13to ensure adequate infrastructure and storage, and developing
14strategies for pursuing additional infrastructure development to
15maintain or enhance pipeline and system reliability, including
16increased natural gas storage. In developing those strategies, the
17commission shall consider needed policies to protect against system
18capacity constraints, mitigate investment risk associated with the
19long term investment in infrastructure in an evolving energy
20market, and identify factors that could limit the ability to receive
21maximum benefits from natural gas as an energy resource.

22(7) Determining the role that natural gas can play in the
23development of zero net energy buildings.

24(8) Optimizing the methods by which the pursuit of these
25strategies can facilitate jobs development in the private sector,
26particularly in distressed areas.

27(9) Optimizing the methods by which state and federal fiscal
28policy can facilitate any of the proposed strategies.

29(b) In developing the report described in subdivision (a), the
30commission shall provide an opportunity for interested parties to
31offer relevant input. The commission shall receive and address
32information from relevant individuals and groups, including entities
33within the natural gas production and delivery chain, end use
34customers, environmental experts, and federal policymakers. Where
35the commission does not accept relevant recommendations of such
36interested parties, it shall provide an explanation and any
37supporting factual basis.

38(c) In developing the report described in subdivision (a), the
39commission shall consult with the Public Utilities Commission,
40the State Water Resources Control Board, the State Air Resources
P5    1Board, the Department of Oil, Gas, and Geothermal Resources,
2and the Department of Conservation to obtain relevant input.

3(d) The Governor shall review the report described in
4subdivision (a) and shall, on or before 180 days after receipt of
5the report, report further to the Legislature the Governor’s
6agreement or disagreement with, and recommended deletions,
7additions, and modifications to, the policy recommendations
8contained in that report. The report, as modified by the Governor,
9shall thereafter comprise the natural gas policy of the State of

11(e) The report to be submitted pursuant to subdivisions (a) and
12(d) shall be submitted in compliance with Section 9795 of the
13Government Code.