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Increasing Natural Gas Supply Crucial to Economic Health Of Seniors, Consumers, Working Families




Opinion , Hank Lacayo, Jaime Rojas and Jim Conran

California’s recent energy crisis demonstrated the vulnerability of the state’s energy market to natural gas supply shortages.

While that crisis may be over, our vulnerability still exists.

Today, natural gas is the main source of electricity production at all of California’s newly built electrical generation plants, yet California produces a mere 13 percent of the natural gas we use.

And, according to the state Energy Commission, domestic natural gas supplies will begin diminishing by 2008, while demand will continue.

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As supplies start running out, California could once again face skyrocketing energy costs, which would most negatively impact under-served, working class and senior communities that can least afford to pay more for heating and cooling their homes or cooking their meals.

California is one of the largest consumers of natural gas in the world.

At times, our natural gas prices have been four times higher than national prices because we import most of our supply through a national pipeline infrastructure that puts California last in line.

As the demand for natural gas increases nationwide, less and less of this supply will reach our state, forcing us to pay more for it.

According to Global Insight, a leading economic forecasting organization, high natural gas prices have a greater impact on residents and businesses in Southern California than in the northern region of the state due to the region’s reliance on manufacturing. Southern California also has a large population of lower-to middle-income residents who are affected the most by increased household utility costs.

While conservation and renewable resources will undoubtedly play an important role in our energy future, they alone cannot meet California’s ever-growing energy needs and reduce the potential for price volatility.

The best way for us to meet demand and keep prices in check is to import liquefied natural gas directly to our shores.

Several proposals for LNG facilities along the West Coast have already been introduced and are currently under review.

The proposal that has advanced furthest in the approval process, called Cabrillo Port, would place a facility nearly 14 miles off the Ventura County shore. This facility alone could fulfill up to 13 percent of California’s immediate natural gas needs.

A recent report by the state Public Utilities Commission and Energy Commission estimates that a new supply source such as LNG could have a dramatic effect on market prices and save Californians more than $1 billion annually on our natural gas bills.

California’s business community, which includes more than 600,000 Hispanic-owned businesses, would benefit from the stable and reliable energy source that Cabrillo Port would provide. If prices don’t stay in check, businesses could be forced to cut jobs or pass along the costs to consumers.

By tapping into this new resource, we can also halt the double-digit increases in utility costs that working families and senior citizens have seen year after year. If we don’t do so, consumers could eventually spend $339 more per year on household utilities, according to the Global Insight report. California’s seniors, consumers and businesses need Cabrillo Port to bring liquefied natural gas into the state and help keep prices in check and home heating and cooling costs low.

California already suffered through one energy crisis , let’s not force our businesses and residents, especially those who can’t afford added economic hardships, to go through it again. With the natural gas supplies assured by LNG, we have the ability to not only prevent rolling blackouts and price spikes, but to sustain the economic health of our state’s diverse communities.


Hank Lacayo is state president of the Congress of California Seniors. Jaime Rojas is president and chief executive officer of the California Hispanic Chamber of Commerce. Jim Conran is president of Consumers First.

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