Your natural gas bills to jump ‘shockingly high’ across region, SoCalGas warns

The cold snap, the drought and Russia’s war in Ukraine are fueling huge winter rate hikes

Southern California residents, get ready for a severe case of sticker shock as your natural gas bills across the region soar more than double this winter, according to the region’s two chief utility companies.

Southern California Gas Company — a subsidiary of Sempra Energy that serves more than 21.8 million customers in Central and Southern California — along with Long Beach Utilities, the city’s independent gas provider, recently warned customers to prepare for unavoidable increases in their gas bills this month.

“There’s no easy way to put this: January bills are likely to be shockingly high,” SoCalGas said in a Thursday, Dec. 29 announcement. “As a result, our customers can expect to see higher gas bills in the coming weeks.”

Long Beach Utilities put out a similar statement on Wednesday, Jan. 4.

Then on Jan. 6 SoCalGas announced a $1 million contribution to the Gas Assistance Fund, its program to help lower income customers pay their natural gas bills. Gillian Wright, senior vice president and chief customer officer at the utility, said, “We know that these higher prices have a real impact on our customers.”

SoCalGas rates are expected to more than double over the cost of last winter. If a customer’s natural gas bill totaled $130 last winter, for example, that household can expect a $315 bill this winter, according to the gas company. And the average Long Beach single-family residential customer should prepare for an increase of $200 or more on their bill, that city’s utility said.

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“Facing the highest natural gas prices in Long Beach’s history, Long Beach Utilities took swift action to mitigate the impact on customers as much as possible,” the department said. “These actions will save customers $10 million and bring the average bill in at about 4 percent less than those of SoCalGas.”

Though gas bills tend to increase slightly during the winter as more gas is used to combat cold weather, both companies attributed the rate increases to corresponding hikes in the market cost of natural gas — which, for a slew of interconnected reasons including the California drought, unexpected severe cold snaps across the country, and Russia’s war in Ukraine has jumped about 128% since November.

“Our customers are understandably shocked by these high market prices suddenly experienced throughout Southern California,” Long Beach Utilities General Manager Chris Garner said in its announcement. “While there are legitimate market forces that have resulted in the cost increase, that does not ease the financial impact to our residents, who rely on natural gas to heat their homes, cook their food and warm their showers.”

Since late November, lower-than-usual temperatures have stretched from Western Canada to California, fueling an increased demand for natural gas. Natural gas consumption in both residential and consumer sectors throughout California and the Pacific Northwest was up 23% in the first three weeks of December, according to the U.S. Energy Information Administration.

To make matters worse, natural gas supply has not kept pace with the increased demand and U.S. natural gas exports to Europe are up significantly, putting an even greater strain on availability.

“Europe relies heavily on Russian gas for its energy needs — especially during the wintertime with heating,” said Brian Peck, the University of Southern California’s Transnational Law and Business Center director in a Thursday, Jan. 5 interview. “And so as part of the U.S.-led effort to provide Western support for Ukraine, they have asked Europe to wean itself off of reliance on Russian gas.”

Earlier this year, President Joe Biden signed a deal with the European Union to increase American exports of liquified natural gas to Europe by 15 billion cubic meters. The deal came after both the U.S. and Britain issued bans on Russian oil — and pressured the EU to join the effort to undercut a major source of Russian revenue.

But for the EU, which gets more than 40% of its liquified natural gas from Russia — an outright ban on the fuel wasn’t possible without major economic consequences for its residents. Biden’s deal to expand gas shipments to the EU, Peck said, aimed to help wean the collection of countries off of Russian natural gas over the next five years.

“The U.S. has pledged to support exports of liquefied natural gas to help Europe wean itself off and become less reliant on Russian oil, which would then decrease gas revenues to Russia’s regime,” Peck said. “(It also) help(s) insulate Europe from Russia’s restrictions on gas until Europe can wean itself off the supply.”

International relations aren’t the only factor stressing the supply of natural gas in Southern California. Along with the new year, the state celebrated a much more grim milestone: Its fourth year of severe drought.

Though the recent storms have brought much-needed water to the state’s reservoirs, the situation remains bleak — with the Metropolitan Water District’s Board of Directors recently declaring a regional drought emergency, and asking its 26 member water agencies to consider implementing mandatory water conservation measures, in early December.

Though a majority of California’s electricity is still generated using natural gas, according to the state’s Energy Commission, about 10.2% of all California electricity is created with hydropower. The state’s shrinking water supply, though, has forced an even heavier reliance on natural gas for electricity production in recent years.

“We’ve seen a lot of reservoirs and dams that produce hydroelectricity struggling because of the drought,” said Long Beach Utilities spokesperson Lauren Gold Howland on Thursday. “There’s been more natural gas used to create electricity because of that.”

And because 90% of California’s natural gas supply is imported — largely from West Texas, the Rocky Mountains, and the Four Corners area — the state relies heavily on the health of a vast interstate of transport pipelines to receive its share of the supply.

Long Beach is slightly insulated from that issue with a few local natural gas suppliers, Gold Howland said, but those sources only account for a mere fraction of what’s needed to serve the whole city.

Capacity along that crucial interstate pipeline has suffered in recent months, according to the U.S. Energy Information Administration (EIA), as wholesale suppliers in West Texas, one of California’s main importers, have dealt with a series of maintenance issues.

fire last June at Freeport LNG — one of Texas’ major liquified natural gas exports terminals — shut down that hub’s operations.  Officials there have set, and then pushed back, a full reopening several times. The company most recently estimated a March 2023 operational restart.

And several other pipelines were shut down to undergo maintenance for normal wear and tear, according to Gold Howland.

“That makes a big difference on how much gas can be coming into the state,” she said.

Natural gas storage capacity in California’s underground reservoirs — three of which are in the Los Angeles area — has also been greatly reduced in recent years.

That’s partially due to the consequences of the massive natural gas leak at the Aliso Canyon storage facility in 2015, the biggest natural gas leak in U.S. history.

The Aliso Canyon facility shut down completely following the 2015 incident that released about 100,000 tons of methane and other chemicals into the air, and resulted in hundreds of lawsuits that cascaded into a $1.8 billion accord in 2021. SoCalGas and Sempra Energy agreed to settle claims filed by more than 35,000 victims.

Two years later, the California Public Utilities Commission and Department of Conservation reopened the facility at greatly reduced capacity.

“The issue there is still kind of a residual impact from the leaks that they had a few years back,” Gold Howland said. “It took a toll on the storage fields — and they’re trying to recover, basically.”

But the problem isn’t limited to Aliso Canyon or Southern California.

Natural gas levels in storage facilities across the Pacific Region — which includes California, Washington state, and Oregon — were 25% lower in December than a year earlier, according to the EIA, and 30% below the five-year average. “In Northern California, Pacific Gas and Electric’s injections, to rebuild natural gas inventories, have not kept pace with previous summers,” the EIA added.

SoCalGas and Long Beach Utilities, meanwhile, assured consumers that the bill increases won’t spike their own profits — and offered a series of tips to help consumers prepare for the inflated January bills.

Both companies advised natural gas users to lower their thermostats three to five degrees — which can result in up to a 10% reduction in heating costs. Washing clothes in cold water, limiting hot showers, turning down the temperature on your water heater, and limiting use of non-essential natural gas appliances may also help slightly.

“Resources are available to help customers manage higher bills, including payment plan options and reduced rates for seniors, those with disabilities and other income-qualified customers,” Long Beach Utilities said. Information about those programs is available on that department’s website.

Click here to read the full article in the Press-Enterprise

A New Era for American Energy


Offshore frackingThe stark difference between Hillary Clinton and Donald Trump was crystal clear when it came to energy before and after the election. Clinton wanted to kill coal, and since Trump was elected three coal companies’ stocks in particular did remarkably well in the market: Arch Coal (ARCH), Peabody (BTUUQ) and Alliance Resource Partners (ARLP). While clean coal is a myth, and natural gas has been taking over coal since the fracking revolution began in the mid 2000s, Trump’s love for West Virginia coal miners has given those companies, and miners across America, new life.

California as an example, which has billions of barrels of oil and trillions of cubic feet of natural gas off its coastlines, will vehemently fight President Trump and his pro-American energy administration. This is just one of the many legal battles the Trump administration may face from the pro-environment-movement in the U.S., and certainly California.

President Obama was the greatest partner for California’s quest towards a green economy by expanding renewable energy tax credits, giving away billions in electric car vehicle subsidies to assist firms like Tesla, signing the Paris Climate Accords and writing tougher pollution laws. The Clean Power Plan was one of the many regulations that Californians embraced; yet the rest of the country was cautious at best.

President-elect Trump has called climate change “an expensive hoax,” to the consternation of Gov. Brown and the California Legislature, which has embraced global warming and climate change with AB32 and SB32. The bills combined look to lower greenhouse gas emissions over 40 percent below 1990 levels, and the belief is that it will spur other nations, and particularly the U.S., to make environmental issues a top priority.

With the Republicans firmly in control of Congress and the presidency, and now that President-elect Trump can nominate numerous Supreme Court justices not sympathetic to California’s environmental agenda, does this put California into environmental exile? To the dismay of a center-right leaning nation, California will now chart its own course, shaping up to be a fight between fossil fuels and renewable energy.

A Trump administration wants to expand fossil fuel exploration and limit, if not do away with, tax credits for renewables. While California continues pushing renewables at their peril most other parts of the country have seen the writing on the wall for renewables such as solar, whose stocks have taken a beating since Mr. Trump was elected.

The Obama administration’s strict EPA regulations on utility emissions, particularly coal, decimated an industry already reeling. Trump will likely attempt to roll back these regulations, but it is still a dirty energy rapidly losing luster in the U.S. California doesn’t allow coal to be shipped out of California ports or railways.

Trump could lead a resurgence for coal as a major energy source for the U.S., and as an export for other energy starved nations. But Trump will also have an affect on controversial, yet possibly needed, pipelines.

The president-elect also wants to “clear the approval for oil pipelines,” yet what these approvals show for the U.S. and Canada is leaders recognizing jobs as a viable factor, but all three have missed a key point. The world is already awash in oil, and OPEC continues missing opportunities to peg the price of crude at/or above $60 a barrel or higher.

Even with these issues President-elect Trump has selected Myron Ebell to lead his EPA transition team. A known global warming skeptic to Gov. Brown and the Legislature’s dismay, Mr. Ebell will likely lead the way for energy to rejoice at regulations softening for further oil and natural gas drilling. Politico also reports Forrest Lucas, the founder of Lucas Oil, is being considered as Secretary of the Interior.

Under the Obama administration, public lands have been off-limits for oil and gas exploration though President Obama and his former Interior Secretary Jewell (a former petroleum engineer) and current Energy Secretary Moniz have both been key endorsers of fracking for American energy independence, emission reduction, and as a jobs creator.

What will be seen are regulations being taken away so exploration can be undertaken on Federal lands and coastal areas under Federal moratoriums. This will affect California’s world-class coastline and the Monterrey Shale along with other oil and natural gas rich areas of California. The real issue will then be whether or not Federal regulatory agencies have the ability to overtake California state law outlawing or severely curtailing fossil fuel exploration.

President-elect Trump is now looking too fast-track his way out of the Paris Climate Accords. While this agenda requires congressional approval it’s not blustering to say this energy policy could revolutionize jobs and more oil and gas exploration since the fracking revolution began in the mid 2000s.

Fracking and drilling for U.S. oil and gas according to President Obama was a key factor, if not the biggest factor, for why the U.S. left the recession quicker than other countries. This agenda could unleash growth that is desperately needed for the tens of millions of Americans and Californians contributing to an all-time low labor participation rate.

Joel Kotkin surmised it best why Trump won:

“Working and middle-class voters went for Donald Trump and helped him break through in states – Michigan, Wisconsin, Iowa – that have usually gone blue in recent presidential elections.”

Nothing makes value and supply chains thunder toward jobs prosperity the way oil, gas and mineral exploration does at this time. President-elect Trump is seizing upon an issue that doesn’t resonate in California, but one that Trump knows could possibly bring him a two-term Presidency. As President Clinton understood: “It’s the economy, stupid.”

Fossil fuel exploration could lead to a Trump mandate and eventually Pence mandate that hasn’t been seen since FDRs New Deal.

Leaking Gas Well Lacked Working Safety Valve


As reported by the Los Angeles Times:

A leaking natural gas well that has displaced thousands of residents in Porter Ranch lacked a working safety valve, sparking new questions about how the facility was maintained.

Attorneys for residents suing Southern California Gas Co. said the company failed to replace the safety valve when it was removed in 1979.

The safety valve may not have prevented the leak, but it would have stopped the continued release of fumes pouring into the community, attorney Brian Panish said in an interview Sunday.

SoCal Gas spokeswoman Melissa Bailey confirmed in an email to The Times that the well did not have …

Click here to read the full article 

Texas Now Produces More Natural Gas Than All Of OPEC


Everything is bigger in Texas, especially natural gas production. The Lone Star State alone produces more natural gas than every country in the world, except Russia, and that includes every member state of OPEC.

The American Petroleum Institute has released a graphic showing that Texas produces 18.81 billion cubic feet of natural gas per day, well above any member of OPEC. The graphic is meant to show how hydraulic fracturing and horizontal drilling into shale formations has made the U.S. the world’s top oil and gas producer.

Source: The American Petroleum Institute
Source: The American Petroleum Institute

“This is what energy security looks like,” Tracee Bentley, head of the Colorado Petroleum Council, said of the graphic. “Thanks to innovations in hydraulic fracturing and horizontal drilling, Colorado now outpaces seven of 12 OPEC nations in natural gas production.”

Individual U.S. states now produce so much natural gas, they outrank whole countries when it comes to daily production. Iran, the largest OPEC gas producer, only produces 15.43 billion cubic feet of natural gas per day. Qatar, OPEC’s number two gas producer, produces 15.09 billion barrels per day.

Louisiana and Pennsylvania also rank among the world’s top 15 natural gas producers. Louisiana produces more gas major producing countries like the Netherlands and Indonesia, while Pennsylvania beats out Mexico and the United Arab Emirates.

Russia as a whole still produces more natural gas than any individual state, but the U.S. as a whole produces much more than Russia. Total U.S. natural gas production comes in at 65.73 billion cubic feet per day, compared to Russia’s 59.46 billion cubic feet per day.

“Rising domestic production has helped to reshape global markets and revitalize job creation here in the United States,” Bentley said.

API’s graphic also compares individual states against the world when it comes to oil production. On its own, Texas produces more crude oil per day than the UAE, Kuwait, Venezuela and Nigeria. As a whole, the U.S. is the world’s largest producer of oil.

Source: The American Petroleum Institute
Source: The American Petroleum Institute

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Originally published by the Daily Caller News Foundation

Why natural gas beats wind power and other “green” experimental energy technologies


From Hot Air:

Lost in the debate over fracking and drilling to extract natural gas in the US and abroad rather than pursuing supposedly clean renewables is this: natural gas is actually greenerNew Geography’s Matt Ridley starts off by asking which view homeowners would prefer — a modest gas well or a towering, noisy commercial windmill — and then explains that choosing wind means you get both (via NewsAlert):

Wind turbines slice thousands of birds of prey in half every year, including white-tailed eagles in Norway, golden eagles in California, wedge-tailed eagles in Tasmania. There’s a video on YouTube of one winging a griffon vulture in Crete. According to a study in Pennsylvania, a wind farm with eight turbines would kill about a 200 bats a year. The pressure wave from the passing blade just implodes the little creatures’ lungs. You and I can go to jail for harming bats or eagles; wind companies are immune.

Still can’t make up your mind? The wind farm requires eight tonnes of an element called neodymium, which is produced only in Inner Mongolia, by boiling ores in acid leaving lakes of radioactive tailings so toxic no creature goes near them.

Not convinced? The gas well requires no subsidy – in fact it pays a hefty tax to the government – whereas the wind turbines each cost you a substantial add-on to your electricity bill, part of which goes to the rich landowner whose land they stand on. Wind power costs three times as much as gas-fired power. Make that nine times if the wind farm is offshore. And that’s assuming the cost of decommissioning the wind farm is left to your children – few will last 25 years.

Decided yet? I forgot to mention something. If you choose the gas well, that’s it, you can have it. If you choose the wind farm, you are going to need the gas well too. That’s because when the wind does not blow you will need a back-up power station running on something more reliable. But the bloke who builds gas turbines is not happy to build one that only operates when the wind drops, so he’s now demanding a subsidy, too.

(Read Full Article)