BILL ANALYSIS �
AB 1257
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Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 1257 (Bocanegra) - As Introduced: February 22, 2013
SUBJECT : State Energy Resources Conservation and Development
Commission: natural gas
SUMMARY : Requires the California Energy Commission (CEC) to
prepare a report every four years regarding the benefits and
uses of natural gas.
EXISTING LAW requires CEC to assess electricity infrastructure
trends and issues facing California and develop and recommend
energy policies for the state to address and resolve such issues
as part of its biennial Integrated Energy Policy Report (IEPR).
[SB 1389 (Bowen), Chapter 568, Statutes of 2002]. The IEPR
must contain an overview of major energy trends and issues
facing the state, including, but not limited to, supply, demand,
pricing, reliability, efficiency, and impacts on public health
and safety, the economy, resources, and the environment. The
IEPR requires an examination of natural gas issues, including
forecasts of natural gas supply, demand and prices and
evaluation of a wide range of related factors. The CEC has
discretion to examine other relevant issues.
THIS BILL enacts the "Natural Gas Act" within the Warren-Alquist
Act, including:
1)Codified findings and declarations touting the benefits of
natural gas as an energy resource.
2)Requires the CEC, by January 1, 2015 and then every four years
thereafter, to prepare a report for the Legislature
identifying strategies to maximize the benefits of natural
gas. As part of the report, the CEC must identify strategies
and options to:
a) Make the best use of natural gas as a transportation
fuel, including for movement of freight, vessels, mass
transit, and other commercial and passenger vehicle use
and identifying methods to increase the development of
natural gas refueling infrastructure.
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b) Determine the optimal role of natural gas-fired
generation as part of a resource portfolio, including,
but not limited to, combined heat and power, and the
impact of that role on meeting greenhouse gas (GHG)
targets.
c) Take the best advantage of natural gas as a
low-emission and renewable resource, including potential
zero and near-zero GHG emissions, natural gas, and biogas
options, taking into account impact on electric system
operations.
d) Optimize the advantage of natural gas as a flexible
and convenient end use energy source, including the
efficient use of natural gas for heating, water heating,
cooling, cooking, engine operation, and other end uses,
and the optimization of appliances for these uses.
e) Identify methods by which gas corporations can
facilitate implementation of any of the strategies
identified in the study.
f) Determine the extent to which a long-term policy is
needed to ensure adequate infrastructure and storage, and
developing strategies for pursuing additional
infrastructure development to maintain or enhance
pipeline and system reliability, including increased
natural gas storage. In developing those strategies, the
commission shall consider needed policies to protect
against system capacity constraints, mitigate investment
risk associated with the long term investment in
infrastructure in an evolving energy market, and identify
factors that could limit the ability to receive maximum
benefits from natural gas as an energy resource.
g) Determine the role that natural gas can play in the
development of zero net energy buildings.
h) Optimize the methods by which the pursuit of these
strategies can facilitate jobs development in the private
sector, particularly in distressed areas.
i) Optimize the methods by which state and federal
fiscal policy can facilitate any of the proposed
strategies.
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3)Requires the CEC, in developing the report, to consider and
respond to comments and consult with relevant state agencies.
4)Requires the Governor to review the report and report his or
her agreement or disagreement to the Legislature within 180
days. The report, as modified by the Governor, shall
thereafter comprise the natural gas policy of the state.
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's statement :
Natural gas is an affordable, low-carbon, and clean-burning
fuel source that can result in substantial reductions of
greenhouse gas emissions. For example, natural gas
consumers in California have already reduced carbon
emissions down to 1990 levels due to energy efficiency
investments and the adoption of low emission gas technology
applications.
While natural gas is being recognized for the importance it
plays in meeting the state's energy needs and helping to
achieve the state's historic greenhouse gas emission
reduction goals, California lacks a long-term strategy to
maximize its benefits as a part of its alternative energy
portfolio.
Natural gas represents a flexible energy supply source for,
among other things, heating, water heating, cooling,
cooking, engine operation, transportation fuel, and
electric generation and provides a valuable complement to
the development of renewable generation sources,
particularly intermittent generating sources. Natural gas
can also provide these services at comparatively lower
cost, while remaining relatively environmentally friendly.
AB 1257 focuses on the use of natural gas, not about the
origin or method of production. Regardless of what the
state decides its policy will be on (hydraulic fracturing),
we need a clear roadmap that effectively guides our current
supply and use of natural gas to further reduce emissions
and lead in the clean energy economy.
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Natural gas is a pivotal component in California's
achievement of the historic greenhouse gas emission
reduction goals and standards required by AB 32. It is an
essential partner to the development of renewables in
providing reliable backup power when the sun is not shining
or when the wind dies down.
2)Bill is written to favor natural gas as a resource.
Notwithstanding natural gas' undisputable value as an energy
source, California's dependence on natural gas, approximately
85 percent of which is imported, comes with significant
consequences for the economy, environment, public health and
safety. Examples include significant greenhouse gas (GHG)
emissions, air and water pollution associated with electric
generation, as well as environmental and safety hazards
associated with pipeline leaks and natural gas production. In
addition, while natural gas is currently cheap and plentiful
due to the recent boom in domestic shale production
attributable to hydraulic fracturing, it wasn't so long ago
that California experienced severe price spikes and
reliability problems associated with constrained supplies of
natural gas and natural gas-powered electric generation. This
was perhaps the most significant factor behind the enactment
of the original Renewables Portfolio Standard in 2002.
Though this bill is posed as a study, neither the findings nor
the operative directions to the CEC seem to recognize these
consequences. A balanced study to support natural gas policy
would ask the CEC to evaluate risks as well as benefits.
Toward that end, the author and the committee may wish to
consider additional findings and report considerations as
follows:
a) According to the Air Resources Board's GHG
inventory, natural gas accounts for 87 percent of GHG
emissions from in-state electric generation and 26
percent of total statewide GHG emissions.
b) While natural gas holds promise to displace coal for
electric generation on a national scale, California's
significantly less GHG-intensive energy portfolio reduces
those potential benefits.
c) California has adopted leading energy efficiency and
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renewable energy policies, including a "loading order,"
which favor efficiency, demand response and renewable
energy sources.
d) Achieving the 2050 GHG emission target established
in Executive Order S-03-05 will require virtual
elimination of GHG emissions associated with combustion
of fossil fuels, including natural gas.
e) In California, the primary short and medium-term air
quality and GHG benefits associated with natural gas use
lie in displacement of petroleum transportation fuels.
f) The CEC should examine lifecycle GHG emissions from
natural gas, including combustion and leakage in the
transportation and distribution system, as well as health
and safety issues associated with natural gas pipelines.
3)Dis-integrating the Integrated Energy Policy Report. The IEPR
was enacted in 2002 as part of an effort to restore the CEC's
planning functions in the wake of the energy crisis that
followed electric industry restructuring. One of the IEPR's
objectives to was to update and consolidate the dozens of
statutory reports that had accumulated over the preceding 25
years of the CEC's existence. In the 10 years since the IEPR
was enacted, the Legislature has enacted additional reporting
requirements, but each time a report subject fits within the
broad scope of the IEPR, the Legislature has made the subject
part of the IEPR. It's not clear why the report called for by
this bill should be an exception. Whatever appropriate
questions the Legislature may have about natural gas can be
asked through the IEPR in a more efficient and cost-effective
fashion. The author and the committee may wish to consider
integrating the questions posed by this bill into the IEPR,
with a report to the Legislature and Governor at four-year
intervals.
REGISTERED SUPPORT / OPPOSITION :
Support
Alhambra Chamber of Commerce
Alhambra Hospital Medical Center
American Die Casting
American Handforge
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A.M. Ortega Construction
Antelope Valley Board of Trade
Antelope Valley Chamber of Commerce
ARB, Inc.
Arcadia Chamber of Commerce
Asian Business Association
Asian Business Association of Orange County
Association of California Cities - Orange County
Athens Services
Bakewell Company
Band of Angels
Beaumont Chamber of Commerce
Black Business Association
Black Chamber of Commerce of Orange County
Boys and Girls Clubs
Brandt Company
Breathe California of Los Angeles County
Burbank Chamber of Commerce
California Asian Pacific Chamber of Commerce
California Black Chamber of Commerce
California Building Industry Association of California
California Business Properties Association
California Contract Cities Association
California Construction and Industrial Materials Association
California Die Casting
California Independent Petroleum Association
California Manufacturers and Technology Association
California Municipal Utilities Association
California Retailers Association
California State Polytechnic University, Pomona
Camarillo Chamber of Commerce
Catalina Cylinders
Center for Sustainable Suburban Development
Central City Association of Los Angeles
Cerritos Regional Chamber of Commerce
Chambers of Commerce Alliance of Ventura & Santa Barbara
Counties
Chinese American Construction Professionals
Chinese Chamber of Commerce of Los Angeles
City of Beaumont
City of Covina
City of Glendale
City of Hemet
City of Lompoc
City of Murrieta
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City of Santa Ana
City of Wildomar
Coachella Valley Economic Partnership
College of the Canyons
Congress of California Seniors
Continental Heat Treating
Convaid
Culver City Chamber of Commerce
Desert Valleys Builders Association
D/K Environmental
Don Knabe, Los Angeles County Supervisor
Duarte Chamber of Commerce
East Los Angeles Community Union
East Yard Communities for Environmental Justice
Economic Development Collaborative, Ventura County
Economic Vitality Corporation of San Luis Obispo County
Economics and Politics
El Monte/South El Monte Chamber of Commerce
Esterline Defense Technologies
Facility Engineering, City of Hope
Foothill Transit
Foothill Workforce Investment Board
Fullerton Chamber of Commerce
Glendale Chamber of Commerce
Glendale Community College
Go Green Initiative
Golden Empire Transit
Goodyear Rubber Company of Southern California
Greater Antelope Valley Association of Realtors
Greater Conejo Valley Chamber of Commerce
Greater Corona Valley Chamber of Commerce
Greater Los Angeles African American Chamber of Commerce
Greater San Fernando Valley Chamber of Commerce
Hollywood Chamber of Commerce
House Foods America
IMPCO Technologies
Industry Manufacturers Council
Inglewood/Airport Area Chamber of Commerce
Inland Action
Inland Empire Asian Business Association
Inland Empire Economic Partnership
Kern County Board of Supervisors
Kern Economic Development Corporation
Kevin Jeffries, Riverside County Supervisor
Kings County Economic Development Corporation
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Korean Community Services
Landi Renzo USA
La Conservation Corps
Latin Business Association
Lincoln Training Center
Los Angeles Area Chamber of Commerce
Los Angeles Business Council
Los Angeles Chapter of Elite SDVOB Network
Los Angeles County Business Federation
Los Angeles Business Source, East Los Angeles Region
Los Angeles Sentinel
Michael Antonovich, Los Angeles County Supervisor
Millennium Biltmore Hotel, Los Angeles
Montebello Chamber of Commerce
Moreno Valley Black Chamber of Commerce
Mothers of East Los Angeles
National Association of Women Business Owners, Los Angeles
National Latina Business Women Association
North Orange County Legislative Alliance
Orange County Business Council
Orange County Coastkeeper
Orange County Hispanic Chamber of Commerce
Orange County Taxpayers Association
ORCO Block Company
Pacoima Beautiful
Palm Desert Area Chamber of Commerce
Pasadena Chamber of Commerce
Pet Center
Plaza Community Services
Porterville Chamber of Commerce
Quality Heat Treating
RBD Communications/Recycling Black Dollars
Redondo Beach Chamber
San Diego Gas & Electric Company
San Dimas Chamber of Commerce
San Fernando Valley Green Team
San Gabriel Valley Economic Partnership
San Gabriel Valley Legislative Coalition of Chambers
San Gabriel Valley Regional Chamber of Commerce
San Joaquin Valley Air Pollution Control District
Santa Barbara County Taxpayers Association
Santa Barbara Technology & Industry Association
Santa Clarita Valley Chamber of Commerce
Santa Clarita Valley Economic Development Corporation
Seal Beach Chamber of Commerce
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Sierra Madre Chamber of Commerce
S E Pipe Line Construction Company
Sequoia Valley Enterprise Zone
Spreckels Sugar Company
South Bay Association of Chambers of Commerce
South Orange County Economic Coalition
South Pasadena Chamber of Commerce
Southeast Community Development Corporation
Southern California Gas Company
Southern California Minority Supplier Development Council
Southern California Public Power Authority
Southwest California Legislative Council
Southwest Gas Corporation
System USA
Temple City Chamber of Commerce
The Salvation Army
Torrance Area Chamber of Commerce
Tulare Chamber of Commerce
UA Local Union 250
United Chambers of Commerce San Fernando Valley & Region
United States Hispanic Chamber of Commerce
Valley Economic Alliance
Valley Metal Treating
Valley Vista Services
Venice Community Housing Corporation
Ventura Chamber of Commerce
Vietnamese American Chamber of Commerce
Visalia Chamber of Commerce
Waste Management
West Hollywood Chamber of Commerce
West Orange County Regional Chamber of Commerce
WireTech
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Opposition
Clean Energy (unless amended)
Clean Power Campaign
Sierra Club California
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092