What the governor could do to prevent the next energy crisis

Dan Jacobson, Daniel M. Kammen
Friday, September 28, 2001
San Francisco Chronicle

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/28/ED98801.DTL

CALIFORNIA is remarkably able to defy expectations. Widespread predictions of summer blackouts have turned out to be worth about as much as
Webvan stock. And predictions that Californians couldn't conserve their way out of the crisis were significantly rebutted by the more than 10 percent
decline in total electricity use this summer.

Given these facts, it makes sense that some commentators are concluding that the Golden State has reached an anticlimactic "end" to the energy crisis.
Californians can stop worrying about the energy crisis, right?

Wrong.

It should go without saying that the conditions that gave rise to the crisis will continue to haunt us until we take energy security and diversity seriously.

First, we saw the OPEC oil crisis in the 1970s. Now we seem to have a new love, natural gas, so much so that more than 90 percent of new power
plants planned for the western United States will be gas fired. We do not seem to have learned much from either the OPEC crisis or the current
situation.

Natural gas prices have always been volatile and the pipelines that deliver gas to California are controlled by a few companies with tremendous market
power. California already depends on natural gas for one-third of its electrical energy supply, and 85 percent of our gas supply is imported from out of
state. Meanwhile, limited domestic natural gas reserves cannot continue to meet skyrocketing demands from the rest of the nation and much of the
world.

It is therefore imperative that we diversify the energy mix away from natural gas to energy sources like wind, solar, clean biomass and geothermal that
are less prone to market disruptions.

Recently, Gov. Gray Davis announced his support for further investment in renewable energy, a commendable move. Yet 94.5 percent of the new
centralized generation being developed in California will come from natural gas -- making us dependent on natural gas for 45 percent of our power,
when all those new plants have been built. By putting all of our eggs in the natural gas basket, we're setting ourselves up for another crisis in fuel spikes.

Fortunately, the governor can do a number of things right away to reduce our reliance on the old energy sources and move California down the path of
clean and reliable energy:

-- Diversify our energy sources by supporting clean energy generation and signing into law an amended SB532. This bill would require retail sellers of
electricity, such as utilities, to increase by about 1 percent per year the amount of clean energy they buy and resell to ratepayers, reaching 20 percent
renewables by 2010. This legislation should be a top priority if lawmakers come back into session in October.

-- Support cleanly distributed energy generation. Small-scale, locally controlled energy production has the potential to offer consumers more choice and
control over their power supply. But the wrong kind of distributed generation, notably dirty diesel backup generators, will needlessly dirty the air more.

-- Direct the new California Power Authority to bring balance to California's energy portfolio by funding only clean renewable power proposals and
energy conservation programs, not more natural gas-fired power plants.

We know that renewable energy is a booming new technology and has the potential to provide California with a powerful new economic sector. Just as
the California economy has prospered by providing the world with food through the Central Valley and computer technology through Silicon Valley, we
can also build our new economy on this "Clean Energy Valley" of emerging technology.

Daniel M. Kammen is a professor in the Energy and Resources Group and a professor of public policy in the Goldman School of Public Policy
at the University of California. Dan Jacobson is a legislative advocate for CALPIRG, the California Public Interest R