Calif GOP Caucus Seeks Special Session On Nat Gas Crisis
By MITCHEL BENSON and REBECCA SMITH
Of THE WALL STREET JOURNAL
SACRAMENTO, Calif. -- The state Assembly's Republican Caucus has asked Gov. Gray Davis to call a special legislative session to solve the state's "pending natural gas crisis."
The request was made in a letter to the governor signed by all 29 members of the GOP caucus that was to be delivered to the governor Monday morning. The Republicans are expected to discuss their request at a Monday afternoon news conference.
The letter says that "With the current energy crisis in California overwhelming the state, dramatically increasing natural gas prices, and the possibility of rolling blackouts both now and this summer, the Legislature must immediately address the natural gas problem before it becomes another energy crisis."
As the current electricity crisis continues to grow, the Republicans argue, "every attempt should be made to insure that the current problems do not expand into the natural gas sector."
"Our citizens are currently experiencing natural gas rate-shock," the Republicans write in their letter. "Without a long-term solution that protects families and employers from a potential natural gas crisis, we risk losing the support and confidence of people who depend upon us for leadership when a crisis is at hand."
The Republicans are proposing that the special session be used to call on government and industry experts from throughout the nation to help lawmakers "diagnose and develop real solutions to our growing natural gas problem. Time is of the essence and we need to continue our work to protect California's long-term economic health." In an interview, Assembly Republican Leader Bill Campbell of Orange County says he'd like the governor to extend a special session of the Legislature that currently is considering how to alleviate the state electricity crisis.
He says he doesn't want to see the state delay, in dealing with the gas problem, as it has done with electricity. The state already is facing an acute electricity shortage, says Mr. Campbell, and the solution is to build more gas-fired power plants. "Are we setting ourselves up for the situation," he asks, "where we add all these brand, spanking new plants and create an even worse natural gas problem?...I would hate to see us build a lot of plants and then find we don't have the gas to run them." He says California is in a very ticklish position since it imports 84% of its natural gas from other states.
He'd like a special session to consider if there are ways of boosting in-state gas production or, perhaps, to build a liquefied natural gas facility so that LNG could be imported from other countries and converted back to natural gas that could be injected into state pipelines, so less would need to come to California from Canada, the Gulf Coast or the Rocky Mountain region. Natural gas prices in California have become extremely volatile.
Whereas there used to be about a $1 per million BTUs difference between prices at the California boundary and the benchmark Henry Hub in Louisiana, there now often is a $10 difference or more. A dysfunctional electricity market - in which suppliers can pay any price for gas to fuel their plants, knowing they can pass the cost along in the price they charge for electricity - is one thing that's blamed for the high gas prices. The electricity market, in effect, stimulates gas prices to go higher because there's no fear that high-cost electricity won't get sold. |
