California Cracks Down on Renewable Natural Gas Pipeline; Inevitable Death Draws Nervous Nellies

by Alex Strickland The state of California recently revoked its agreement with ExxonMobil to buy the oil pipeline from the company in the state — because the state would only buy the pipeline if…

California Cracks Down on Renewable Natural Gas Pipeline; Inevitable Death Draws Nervous Nellies

by Alex Strickland

The state of California recently revoked its agreement with ExxonMobil to buy the oil pipeline from the company in the state — because the state would only buy the pipeline if it were converted to run on electricity rather than natural gas.

Enter renewables-powered pipelines.

In 2009, Arizona signed a deal with Southern California Edison to be the home of the state’s first renewable natural gas pipeline. Called the CP Oil & Gas Transmission Pipeline, this natural gas pipeline will carry liquid propane gas from Cottonwood County, New Mexico to the Paramount Ranch Industrial Park in the San Fernando Valley in Los Angeles.

However, the CP Oil & Gas Pipeline will not be built because while the pipeline is advertised as being 100 percent renewable, the state of California has determined it won’t be.

The Senate Natural Resources Committee of the state Senate granted approval for $6.9 million to the pipeline in January of 2016 — even as the state was approving a budget that included a provision to request that the pipeline be converted to run on electricity rather than natural gas.

The California statute to which the pipeline was attached gave the California Department of Water Resources the authority to convert it to run on electricity. Earlier this year, the department did so.

But the decision to convert the pipeline to run on electricity instead of natural gas has not been met with fanfare. The new law, which gave the state board that oversees water rights the authority to decide whether the pipeline’s fuel should be natural gas or electricity, was supposed to be ratified by both houses of the state legislature.

However, in August, the Senate Environment and Natural Resources Committee refused to vote on that bill, saying it failed to include protections for taxpayers and for Native American land owners who would have to buy the pipeline for the equivalent of $3.8 million for every acre they deeded to the board.

Both houses of the California Legislature are scheduled to reconvene Monday.

It’s possible the pipeline could still go forward, without having to convert it to run on electricity, but it’s questionable if the bonds needed to finance the project are available, and the state may find money to pay for the CP Oil & Gas Transmission Pipeline project is no longer necessary.

Leave a Comment