BILL ANALYSIS Ó
AB 1257
Page 1
ASSEMBLY THIRD READING
AB 1257 (Bocanegra)
As Amended May 6, 2013
Majority vote
NATURAL RESOURCES 9-0 APPROPRIATIONS 17-0
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|Ayes:|Chesbro, Grove, Bigelow, |Ayes:|Gatto, Harkey, Bigelow, |
| |Garcia, Muratsuchi, | |Bocanegra, Bradford, Ian |
| |Patterson, Skinner, | |Calderon, Campos, |
| |Stone, Williams | |Donnelly, Eggman, Gomez, |
| | | |Hall, Ammiano, Linder, |
| | | |Pan, Quirk, Wagner, Weber |
| | | | |
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SUMMARY : Requires the California Energy Commission (CEC) to
prepare a report every four years regarding natural gas.
Specifically, this bill :
1)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.
b) Identifying the 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) Assessing the potential of natural gas as a
low-emission resource, including potential zero and
near-zero GHG emissions, natural gas, and biogas options,
taking into account impact on electric system operations.
d) Optimizing natural gas as a flexible and convenient
end use energy source, including the efficient use of
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natural gas for heating, water heating, cooling, cooking,
engine operation, and other end uses, and the
optimization of appliances for these uses.
e) Analyzing effective methods and strategies by which
the electric and natural gas industries can facilitate
implementation of any of the strategies identified in the
study.
f) Determining 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.
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.
j) Evaluating the incremental beneficial and adverse
economic cost and environmental impacts of proposed
strategies, including lifecycle GHG emissions from
production, transportation, and use of natural gas based
on authoritative, peer-reviewed, and science-based
analysis, or as determined by the Air Resources Board.
2)Requires the CEC, in developing the report, to consider and
respond to comments and consult with relevant state agencies.
3)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.
EXISTING LAW requires CEC to assess electricity infrastructure
trends and issues facing California and develop and recommend
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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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, increased one-time and ongoing costs for the CEC to
prepare the report, potentially in the $100,000 to $300,000
range.
COMMENTS : Notwithstanding natural gas' undisputable value as an
energy source, California's dependence on natural gas,
approximately 85% of which is imported, comes with significant
consequences for the economy, environment, public health and
safety. Examples include significant 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.
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 is not clear why the report called for by
this bill should be an exception. Whatever appropriate
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questions the Legislature may have about natural gas can be
asked through the IEPR in a more efficient and cost-effective
fashion.
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
FN: 0000989