BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 37 (Simitian)
Hearing Date: 05/02/2011 Amended: 03/14/2011
Consultant: Brendan McCarthy Policy Vote: EU&C 8-3
_________________________________________________________________
____
BILL SUMMARY: SB 37 requires the California Energy Commission to
conduct a needs assessment for liquefied natural gas terminals
and to revise that assessment when new terminal facilities are
proposed. The bill requires proposed liquefied natural gas
terminal projects subject to the California Environmental
Quality Act to include specified information in an environmental
impact report.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Development of needs $300 General
*
assessment
* Energy Resources Program Account.
_________________________________________________________________
____
STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Natural gas is typically transported through pipelines, for use
as a fuel source for power plants and for domestic heating and
other uses. Liquefied natural gas has been cooled to the point
that it condenses as a liquid and can be transported in tanker
ships. There are no operating liquefied natural gas port
facilities in California, although some have been proposed for
future development. Any proposed liquefied natural gas terminal
would require permits from the U.S. Coast Guard, the California
Coastal Commission, and the California State Lands Commission.
In addition, any proposed natural gas terminal would most likely
require an environmental impact report under the California
Environmental Quality Act.
SB 37 requires the Energy Commission to develop a needs
assessment for liquefied natural gas imports to meet the state's
energy needs, as part of its biennial Integrated Energy Policy
Report.
The bill requires the Energy Commission to update the needs
assessment in advance of a hearing held by the State Lands
SB 37 (Simitian)
Page 3
Commission or the Coastal Commission to consider issuing permits
for proposed liquefied natural gas terminals.
The bill requires the Energy Commission to collect and post on
the internet specified information about existing and proposed
liquefied natural gas terminals.
The bill requires additional disclosure of information, under
the California Environmental Quality Act for proposed liquefied
natural gas terminal projects. For any proposed liquefied
natural gas terminal project that is not complete by January
2012, the bill requires an environmental impact report contain
an analysis of all feasible alternative project technologies, an
analysis of the potential impacts on minority and low-income
populations, and a life cycle analysis of the impacts of
greenhouse gasses associated with the project.
The bill requires the Energy Commission to impose a fee on a
liquefied natural gas terminal permit applicant, sufficient to
recover the Commission's costs to implement the provisions of
the bill.
The Energy Commission indicates that it will cost about $300,000
to develop the initial needs assessment required under the bill.
There would be additional costs to update the needs assessment
if the state receives applications for proposed liquefied
natural gas terminal projects. While the bill requires the
Commission to recover its cost through a new fee on project
applications, the Commission will incur upfront costs to develop
the initial needs assessment, whether or not it collects fee
revenues in the future.
Any costs incurred under this bill would be funded from the
Energy Program Resources Account. That fund, supported by a tax
on energy use, is near its statutory maximum. In addition,
several recently enacted bills have increased demand for those
funds.
SB 412 (Simitian, 2007) and SB 376 (Simitian, 2009) were
substantially similar to this bill. Both bills were held in the
Assembly Appropriations Committee.
SB 37 (Simitian)
Page 4