BILL ANALYSIS
AB 2643
Page 1
ASSEMBLY THIRD READING
AB 2643 (Canciamilla)
As Amended March 26, 2004
Majority vote
UTILITIES AND COMMERCE 10-2 NATURAL RESOURCES 10-0
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|Ayes:|Reyes, Calderon, |Ayes:|Jackson, La Malfa, |
| |Campbell, Canciamilla, | |Hancock, Harman, |
| |Diaz, Jerome Horton, La | |Aghazarian, Koretz, |
| |Malfa, Levine, | |Laird, Lieber, Lowenthal, |
| |Ridley-Thomas, Wesson | |Wolk |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bogh, Strickland | | |
| | | | |
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APPROPRIATIONS 20-0
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|Ayes:|Chu, Runner, Bates, Berg, | | |
| |Calderon, Corbett, | | |
| |Correa, Daucher, Laird, | | |
| |Goldberg, Keene, Leno, | | |
| |Nation, Negrete McLeod, | | |
| |Oropeza, Pavley, | | |
| |Ridley-Thomas, Wesson, | | |
| |Wiggins, Yee | | |
| | | | |
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SUMMARY : Requires the California Energy Resources Conservation
and Development Commission (CEC) to prepare, as a component of
the 2005 Integrated Energy Policy Report (IEPR), an assessment
of the costs and benefits of siting liquefied natural gas (LNG)
facilities within the state.
EXISTING LAW requires CEC to biennially adopt an IEPR containing
an overview of major energy trends and issues, including:
supply; demand; pricing; reliability; efficiency; impacts on
public health and safety; the economy; resources; and, the
environment.
FISCAL EFFECT : Negligible fiscal impact, as this bill is
consistent with efforts already underway at CEC.
AB 2643
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COMMENTS : Since 2000, retail and wholesale natural gas prices
in California have been extremely volatile. These natural gas
price swings are the result of an increased demand for natural
gas by electric generators, a limited supply of natural gas
within California, and limitations on the ability of natural gas
pipelines to deliver gas to California. Growing demand for
natural gas in California will likely continue to put upward
pressures on natural gas prices. According to CEC, natural gas
demand in California is predicted to increase by at least 10%
over the next ten years.
While natural gas demand continues to rise, there are few
existing options for additional supply in California. Over 85%
of natural gas consumed in the state is piped into California
from Texas, the Rocky Mountains, and Canada. Although pipeline
capacity to California has increased by over 20% since 2001,
increased natural gas demand in other western states will
ultimately limit the availability of natural gas from these
pipelines.
One alternative to meeting the growing pressures on California's
natural gas markets is LNG. LNG is natural gas that has been
turned into a liquid by cooling it to minus 259 degrees
Fahrenheit. Once the gas is turned into a liquid it can be
transported overseas by tanker then reclassified for use on the
other end. Building LNG receiving terminals in or near
California would open the state up to other sources of natural
gas beyond the range of overland pipelines.
Currently there are several proposals for LNG facilities in or
near California. Private companies have proposed building
receiving terminals in Long Beach, in the ocean off Ventura
County, and in Baja California. None of these proposals have
received final approval to begin construction and each one still
must address numerous environmental and safety concerns that
have been raised by the local communities and governmental
regulators. Additionally, at this time there is a dispute
between the Federal Energy Regulatory Commission and the
California Public Utilities Commission as to the scope of each
agency's jurisdiction over LNG facilities in California.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
AB 2643
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FN: 0005098