BILL NUMBER: SB 426 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 13, 2005
AMENDED IN ASSEMBLY JUNE 21, 2005
AMENDED IN SENATE MAY 27, 2005
AMENDED IN SENATE APRIL 13, 2005
INTRODUCED BY Senator Simitian
( Principal coauthor: Assembly Member
Pavley )
FEBRUARY 17, 2005
An act to add Article 2 (commencing with Section 25571) to Chapter
6.5 6.6 of Division 15 of the Public
Resources Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 426, as amended, Simitian State Energy Resources Conservation
and Development Commission: liquified natural gas plants.
The existing Warren-Alquist State Energy Resources Conservation
and Development Act establishes the State Energy Resources
Conservation and Development Commission and requires the commission
to prepare a biennial integrated energy policy report. The act
requires the commission to certify sufficient sites and related
facilities that are required to provide a supply of electricity
sufficient to accommodate projected demand for power statewide. The
act grants the commission the exclusive authority to certify any
stationary or floating electrical generating facility using any
source of thermal energy, with a generating capacity of 50 megawatts
or more, and any facilities appurtenant thereto.
This bill would require the commission to make a liquefied natural
gas (LNG) needs assessment study that assesses demand and supply for
natural gas and alternatives to natural gas to meet energy demands,
and to determine the number of LNG terminals, if any, needed to meet
the state's projected natural gas demand. The bill would require the
LNG needs assessment study, upon the filing of an application for a
permit to construct or operate an LNG terminal prior to January
1, 2006 , to be completed no later than November 1, 2006, and
incorporated into its biennial integrated energy policy report.
The bill would require the commission, for any application received
after January 1, 2006, to include an evaluation of the additional
application in an updated and revised LNG needs assessment study
prepared by a specified date if the commission
can sufficiently perform the evaluation consistent with
these provisions. The bill would require the energy commission
to hold public hearings to consider the results of the LNG needs
assessment study and to provide an opportunity for public comment.
All costs of the commission for the implementation of these
requirements, including costs for any temporary personnel or
consultants, would be funded from fees charged to persons or entities
applying for permits to construct and operate a LNG terminal
according to mechanisms that would be added by SB 1003 of the 2005-06
Regular Session. The bill would require the commission to compare
and rank every site for which an application for a permit to
construct and operate a LNG terminal has been filed, based upon
certain criteria and in consultation with specified entities, and
would require the commission to issue permits only according to the
rank order or priority, and as necessary. The bill would authorize
the commission to issue a permit to construct and operate a LNG
terminal only if it determines that the technology chosen for a
particular site will have the least adverse public health, safety,
and environmental impacts then feasible. The bill would provide that
these requirements are applicable to every LNG terminal to be
constructed or operating in California, irrespective of whether an
application has been submitted for the construction or operation of
the terminal to any federal, state, or local entity prior to the
operative date of the bill.
The bill would provide that it shall only become operative if SB
1003 of the 2005-06 Regular Session is also enacted and becomes
operative on or before January 1, 2006.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) It is the policy of the state to meet California's energy
growth by optimizing energy conservation and resource efficiency and
by reducing per capita demand to ensure a clean, safe, and reliable
supply of energy for California.
(b) It is the policy of the state to be sensitive to the impact of
the state's energy policy on global climate change and environmental
impacts in host countries that export natural gas.
(c) It is the policy of the state to accelerate the use of
renewable energy resources wherever feasible and to ensure a diverse
and affordable portfolio of fuel sources to minimize the opportunity
for supply interruptions.
(d) The state has a lead role in decisions regarding the siting
and design of new onshore and offshore infrastructure for the
importation of liquefied natural gas that results in impacts to
public health, safety, and the environment.
(e) Laws and regulations enacted by the state to address consumer,
community, public health, safety, and environmental impacts of new
onshore and offshore imported liquefied natural gas infrastructure,
where more protective, should not be preempted by weaker, less
protective federal laws and regulations.
(f) Decisions regarding the importation of liquefied natural gas
should be based on a comprehensive review of current and projected
natural gas supply and demand in California, and alternative sources
of supply.
(g) Construction and operation of liquefied natural gas onshore
and offshore infrastructure may commence after completion of a
rigorous evaluation that analyzes the need for liquefied natural gas
and the relative merits of pending and future proposals with respect
to business, consumer, community, public health, safety, and
environmental impacts.
SEC. 2. Article 2 (commencing with Section 25571) is added to
Chapter 6.5 6.6 of Division 15 of the
Public Resources Code, to read:
Article 2. Evaluation of Potential Liquefied Natural Gas
Terminals and Alternatives
25571. (a) The commission shall not issue a permit to construct
and operate a liquefied natural gas terminal, except in accordance
with this article.
(b) The commission shall issue a permit, or more than one permit,
to construct and operate a liquefied natural gas terminal, only
according to the rank order priority established in this article and
as necessary to further the purposes of this chapter.
25571.2. (a) The commission shall make a study of the need for
liquefied natural gas terminals to meet the state's energy demands,
to be known as the LNG Needs Assessment Study. The study shall assess
all of the following:
(1) The future demand for natural gas in California.
(2) The future supply of natural gas in California available from
domestic production and imported into California through interstate
pipelines, supply available from domestic production within
California, and supply available from foreign production and imported
into California through international pipelines from Mexico and
Canada, including any liquefied natural gas terminal proposed to be
built outside the state that would be the source for natural gas
imported into the state.
(3) All supplemental sources of natural gas and natural gas
alternatives that can reasonably be expected to be available to meet
the projected demand for natural gas, including, but not limited to,
conservation and energy efficiency programs, steps to increase
production and importation of natural gas from other states, Mexico,
and Canada, steps to increase available supply from federally owned
or federally regulated supplies, and steps to increase energy
supplies available from renewable energy resources, including solar,
wind, geothermal, and biomass.
(b) The LNG Needs Assessment Study shall determine the number of
liquefied natural gas terminals, if any, needed to meet the state's
projected natural gas demand and whether it is economically feasible
to meet the state's future natural gas needs without constructing a
liquefied natural gas terminal.
(c) (1) The commission shall not commence the LNG Needs Assessment
Study until an application has been submitted for approval.
(2) The LNG Needs Assessment Study shall, upon filing of an
application, be commenced by January 1, 2006 , shall include an
evaluation of all applications received by January 1, 2006 ,
shall be completed no later than November 1, 2006, and shall be
incorporated into the integrated energy policy report prepared
pursuant to Section 25302. For any application received after
January 1, 2006, the commission shall include an evaluation of the
additional application in an updated and revised LNG Needs Assessment
Study prepared by December 31st of the year of its
receipt if the commission can sufficiently perform the evaluation
consistent with this article.
(d) The commission shall hold at least two public hearings to
consider the results of the LNG Needs Assessment Study and to provide
an opportunity for public comment. At least one public hearing shall
be held in any county that is the proposed site for which an
application for a permit has been filed with the commission, to
construct and operate a liquefied natural gas terminal. If the
terminal is not proposed to be located within a city or county, the
hearings shall be in the city or county nearest the proposed
location.
(e) All costs incurred by the commission for the implementation of
this article, including costs for any temporary personnel or
consultants, shall be funded by fees charged to persons or entities
applying for permits to construct and operate a liquefied natural gas
terminal.
25571.4. (a) The commission shall compare and rank every site for
which an application for a permit has been filed with the commission
to construct and operate a liquefied natural gas terminal. The
comparison and ranking shall be based on the following criteria:
(1) The extent to which the facility is necessary to meet the
future energy needs of California.
(2) The extent to which environmentally less damaging alternatives
are feasible to meet California's future energy needs.
(3) The extent to which a no-build alternative is or is not
economically feasible for California's economy.
(4) All effects on the environment, public health, safety, and
welfare, including any disproportionate negative effects upon
low-income or disadvantaged communities.
(5) The extent to which the facility, including supporting
infrastructure and resulting ship and air traffic, could impact upon
national security, along with any cumulative impacts upon national
security that could result from multiple facilities. Potential
impacts on national security include any effect that the facility may
have on the land, sea, and airspace identified by the Department of
Defense, any of its component armed services, or the United States
Coast Guard, for conducting operations, for conducting training, or
for the development and testing of weapons, sensors, and tactics.
(6) The economic merits of the respective proposals, including,
but not limited to, the reliability and sustainability of the
proposed supply.
(b) In conducting the comparison and ranking, the commission shall
consult with all entities of local government that would be affected
by a proposed liquefied natural gas terminal, the California Coastal
Commission, the State Lands Commission, the Public Utilities
Commission, the Office of Emergency Services, the Department of Fish
and Game, the State Water Resources Control Board, the affected
California regional water quality control board, the State Air
Resources Board, the Federal Energy Regulatory Commission, the
Department of Defense and its component armed services, and the
United States Coast Guard.
25571.6. The commission may issue a permit to construct and
operate a liquefied natural gas terminal only if it determines, based
on the record, that among the available technologies for producing
natural gas through a liquefied natural gas process, that the
technology chosen for a particular site will have the least adverse
public health, safety, and environmental impacts then feasible.
25571.8. (a) This article does not limit any existing authority
of state government pursuant to Division 13 (commencing with Section
21000).
(b) The requirements of this article are applicable to every
liquefied natural gas terminal to be constructed or operating in
California, irrespective of whether an application has been submitted
for the construction or operation of the terminal to any federal,
state, or local entity prior to the operative date of this article.
SEC. 3. This act shall only become operative if Senate Bill 1003
of the 2005-06 Regular Session is also enacted and becomes operative
on or before January 1, 2006.