Elk Hills Power LLC

Elk Hills Power LLC, a joint venture of local oil producer California Resources Corp. and a portfolio company of Ares Management LP, operates a state-of-the-art cryogenic gas processing plant at the Elk Hills Field in western Kern County. CRC said the plant's capacity of 200 million cubic feet per day brings the total gas processing capacity at Elk Hills to more than 520 million cubic feet per day. The facility is the biggest in the state, bolstering Elk Hills' status as a regional gas hub for California.

Another chunk of Kern County's economy — natural gas production — has come under threat from California's efforts to "decarbonize" buildings across the state as a way of helping achieve Sacramento's greenhouse-gas reduction goals.

A proposal being reviewed by the California Public Utilities Commission is aimed at identifying projects that would replace natural gas-fired appliances in homes and businesses with strictly electric-powered equipment.

The idea, based on a pair of laws signed in 2018 by former Gov. Jerry Brown, is to support California's intention to cut greenhouse-gas emissions to 40 percent below 1990 levels by 2030.

Kern County politicians and industry have argued against the plan, saying that scaling back the use of natural gas would raise energy costs for businesses and consumers, especially those in the Central Valley.

Instead, they contend the state would be better served by diversifying its energy portfolio, which they maintain would make California more resilient and bolster the reliability of its power supply.

WIDER DEBATE

The question of whether to dial back California's use of natural gas adds fuel to a heated policy debate with major implications for Kern's economy.

The county produced 70 percent of the state's domestically produced natural gas in 2017, the most recent year for which data are available. A lot of that gas was associated with oil production, which supports at least 10,000 local jobs directly and many thousands more indirectly.

Environmentalists alarmed by dire climate-change projections have ramped up calls for shutting down petroleum production statewide.

The person with the most sway over the issue, Gov. Gavin Newsom, has thrown his support behind moving California away from its dependence on petroleum. But he has also expressed a desire to carry out that process thoughtfully, with special consideration for communities like Kern whose economies would be upended by an abrupt end to oil and natural gas production.

MOVING AGGRESSIVELY

Supporters of decarbonizing California buildings, including CPUC President Michael Picker, note that a quarter of the state's greenhouse-gas emissions result from burning natural gas in homes and other structures.

They calculate that moving to 100-percent renewable electricity alone won't be enough to meet the state's climate-change goals.

"We must also electrify our homes & buildings to reduce fossil fuel usage," Commissioner Picker tweeted in April.

DISPROPORTIONATE COSTS

On the other side of the argument are data showing inland California's energy costs are much higher than they are on the coast. This suggests Central Valley communities reliant on air-conditioning to cool their homes during hot months could suffer disproportionately from any program that raises energy costs.

Opponents of decarbonization further note California is so dependent on natural gas that the state imported 10 times the amount of natural gas it produced in 2017.

Assemblyman Rudy Salas, D-Bakersfield, emphasized in a telephone interview last week that the state has already invested in dairy-based renewable natural gas and so scaling back its use contradicts existing policy.

He also pointed out equipment that runs on natural gas still works during power outages, which because of wildfires are expected to become more frequent in the state. 

"We need to provide more options, options that make energy bills more affordable for people, not more expensive," Salas said.

ALL OF THE ABOVE

Assemblyman Vince Fong, R-Bakersfield, also opposes decarbonization on the basis of affordability. Like Salas, he said the state should adopt an all-of-the-above approach to energy, as already happens in Kern.

"Kern County is the model for how we should approach energy in this state — we produce petroleum, natural gas, wind, solar, geothermal and other renewables — and all are a part of providing reliable and affordable energy to a state that has incredibly high energy demands," Fong said in an emailed statement.

Several environmental activist groups did not respond to requests for comment.

BERKELEY'S LEAD

An example of a community moving forward with decarbonization is Berkeley. In July of 2017, the city became the first city in the state to ban the installation of natural gas pipes in most new buildings.

Members of Berkeley's City Council were told electricity entails far less carbon emissions than natural gas. Estimates they considered held that natural gas accounted for more than a quarter of the city's greenhouse-gas emissions, and that for just Berkeley's building sector, the share rises to 73 percent.

The leading producer of natural gas in Kern County, Chatsworth-based California Resources Corp., emphasized in an email that pilot projects under consideration by the CPUC and the California Energy Commission are still in early planning stages. As these initiatives progress, the company said, it will be important for the process to take into account energy affordability, reliability and resilience against power outages and natural disasters.

MOVING CAREFULLY

The company noted that the Los Angeles County Board of Supervisors recently chose to move carefully on a plan to require the use of electrical appliances instead of natural gas equipment in new buildings. Of particular concern to the board, CRC pointed out, was the potential for "natural disasters, international turmoil, power outages, cyber-attacks, transportation disruptions and price spikes."

CRC also emphasized that natural gas provides 40 percent of the state's energy portfolio and a third of its supply of electricity.

"No alternatives are currently available that provide the same amount of energy as natural gas with the same affordability," the company stated.

John Cox can be reached at 661-395-7404. Follow him on Twitter: @TheThirdGraf. Sign up at Bakersfield.com for free newsletters about local business.

(4) comments

Steve57

So they want to replace all of my gas appliances with electric, does that include my gas fired heater? More proof that the leadership in this state cares nothing about the working class or the poor who cannot afford to pay extra for some feel good government mandate they did not vote for. The left coast democrats are all nuts in my opinion. This is just a great example of mob rule.

Lilyrose

Murphy, may I ask where are there LNG plants in Kern county ? How many (percentage ) wells are set up to extract "natural" gas ?

I see flare without scrubbers and with out cycling back in. So I'm just curious.

RedRover

Governor Newsom's imaginary effort is nothing more than a "tilting at windmills" stunt. He knows that his grand scheme will never come to fruition. While it sounds great and wonderful, it’s totally impractical. It’s what he does not say that speaks volumes.



Governor Newsom's vote-promoting scheme, an Obama Care equivalent, will be promoted likewise: If you like toasting your bread and brewing your coffee while watching TV and doing the wash in the morning nothing will change. Any change will be transparent. Nothing you do that is powered by electric energy will be interrupted or lost. You’ll have more options. Your life and the environment will improve. Everyone, ranging from the little guy to the rich, the famous, the politicians, the regulators will be treated and affected equally.



Governor Newsom is seeking notoriety; his ultimate plan is targeting a run for President. He’ll say he lead the effort of saving the planet by having Californians give up their dependence on fossil-based energy.



When facts and reality set in only then will Californians realize they've been used as pawns in Governor Newsom's new version of Aesop's Fables of no fossil-based power in California. Governor Newsom should add a new chapter in his play book and tell people all over California to appreciate how their lives benefit from Kern County's abundant natural resources powering fossil-based power plants while peacefully coexisting with wind and solar energy farms in the distant hills.

Thomas Murphy

This movement is pointless. Much of the electricity we use in California is generated in surrounding states by natural gas-fired power plants. Also, electric appliances are roughly 30% less efficient than natural gas appliances. Those inefficiencies coupled with transmission losses over vast distances seems like if anything that this effort will actually INCREASE natural gas consumption and since they don’t see this, they feel good about themseleves.

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