Energy

The California Energy Shortage: Myths and Facts

What's the real story behind California's energy shortage? There's a lot of myth and rhetoric floating around. Some, including President Bush, have tried to pin the crunch on environmentalists and clean-air standards, but energy experts point to poorly planned deregulation and mistakes by the utilities. Below, some perspective from editorials and opinion pieces on the issue.

The Bush Administration has pointed to environmental standards as the cause of California's energy shortage. But, as the Los Angeles Times said in a recent editorial:

"In fact, it was regulatory uncertainty and economic decisions by utilities and private generating companies that caused the lack of new plants."

The Bush administration also claimed that California's energy shortage shows that we need to drill in the Arctic Refuge. But as the Los Angeles Times noted:

"Drilling in the Arctic National Wildlife Refuge, President Bush's signature energy cause, would not generate one kilowatt of electricity for California. It wouldn't even produce any oil for an estimated 10 years...

The amount of oil thought to be there is not enough to significantly ease the United States' dependence on foreign oil. Nor is it enough to outweigh the value of this region as a wilderness home to caribou, wolves, bears, musk oxen and hundreds of other species."

The New York Times also noted that

"it is wholly specious to suggest, as Mr. Bush does, a connection between opening the refuge and California's energy problems. Less than 1 percent of California's electricity comes from oil. California's fuel of choice is natural gas, and if Mr. Bush wants to find natural gas, there are far better places than the coastal plain to look for it."

The Times also states, that though we need a balanced energy strategy,

"the first step in that strategy should not be to start punching holes in the Arctic Refuge... the relatively trivial amounts of recoverable oil in the refuge cannot possibly justify the potential corruption of a unique and irreplaceable natural area."

The entire editorial "Wrong Way on Energy" (Jan. 31) can be found at:

http://www.nytimes.com/2001/01/31/opinion/31WED1.html

Paul Krugman of The New York Times noted in a recent column, "Smog and Mirrors" (Jan. 31), that though George W. Bush placed the blame for California's shortage on air-quality standards,

"his assertion was swiftly contradicted — not just by environmentalists and California officials, but by the energy industry. A spokesman for Houston- based Reliant Energy, which operates four Southern California plants, told The Los Angeles Times that assertions that environmental regulations were holding back power production were "absolutely false."

Nor, apparently, did environmental regulations play much of a role in California's failure to build new plants in the years since deregulation..."

Paul Krugmans's entire column, "Smog and Mirrors" (Jan 31.) can be found at: http://www.nytimes.com/2001/01/31/opinion/31KRUG.html

California Energy Myths

California's energy shortage has given rise to a slew of myths and misperceptions about the causes of and solutions to the crunch. In an effort to separate fact from fiction, the Sierra Club has prepared this document. Sierra Club energy experts are also available to provide more information.

Myths and facts below:

To set up an interview or get more information, please contact the Sierra Club media staff: media.team@sierraclub.org.

MYTH: Environmentalists caused California's power shortage.

FACT: As the Los Angeles Times said in an editorial (Jan. 31, 2001):

"The California electricity shortage was not caused by environmental extremism..." And, as Paul Krugman of the New York Times said ("Smog and Mirrors" Jan. 31, 2001), "Nor, apparently, did environmental regulations play much of a role in California's failure to build new plants in the years since deregulation."

The California electricity shortage is mainly the result of a flawed deregulation plan compounded by mistakes made by the utilities.

• The Sierra Club has not blocked or delayed any new power plants in California over the last ten years.
• The Sierra Club has long been in favor of updating old, inefficient generating plants with cleaner, more efficient ones and we support the proposed Calpine generating plant slated to be built near San Jose. Unfortunately, this plant has been blocked by Cisco Systems, who is planning to build an office park nearby.
• In 1995, the Sierra Club and other environmental organizations supported the construction of the 1400 megawatts of new, clean generating capacity. According to an article in the Los Angeles Daily News ("By Killing Plan, Socal Edison Helped Create Power Crisis," Jan. 21):

  "...Southern California Edison and other utilities helped kill a state plan that would have authorized the creation of new power plants sufficient to power 1.4 million homes, records and interviews show." The utilities hoped that they could buy " plenty of cheaper power elsewhere..."

• To add insult to injury the same Daily New article reported: "By state law, much of the power was ordered to come from renewable energy such as wind, geothermal and solar."
• According to the California Energy Commission, no electric power plant in California has been rejected over air pollution issues.

MYTH: The Sierra Club is against building new power plants in California.

FACT: The Sierra Club has long advocated for modernizing or replacing older power plants with newer ones. New power plants are up to 50% more efficient and up to 90% cleaner than older ones. Utilities and power producers on the other hand, have resisted building new plants over the last ten years because, until recently, demand did not force them to do so and because the utilities knew that deregulation would force them to sell off plants.

In the last three years, a number of proposed power plants have been slowed by objections from competing energy companies. According to the Sacramento Bee (Jan. 28, 2001):

"Of the 21 power plants proposed for licensing since 1997, competing companies have intervened in 12 proposals, slowing the process in at least four situations..."

MYTH: Higher energy prices and the California energy crunch show that we need to increase our oil supply by drilling in the Arctic National Refuge.

FACT: California gets less than 1% of its electricity from oil-fired plants and, as the Los Angeles Times states ("Arctic Oil a Sham Answer," Jan. 31, 2001):

"Drilling in the Arctic National Wildlife Refuge, President Bush's signature energy cause, would not generate one kilowatt or electricity for California. It wouldn't even produce any oil for an estimated 10 years."

Instead of drilling in the Arctic, we could find a new source of oil by raising automobile and light-truck fuel-economy standards. If we increased fuel economy standards by just 6 percent each year, by the time oil from the Arctic became available, we could be saving 1.1 billion barrels of oil annually. That's more oil than we import from Saudi Arabia, Kuwait, Qatar, Bahrain, United Arab Emirates, and estimates of oil in the Arctic, and national offshore oil combined.

MYTH: Air-quality restrictions have caused blackouts across the state.

FACT: Air-quality restrictions are not a major factor in the blackouts. In fact, dirty plants are highly inefficient and waste valuable fuel. The blackouts are due to a lack of energy production and are mainly the result of the flawed deregulation plan and mistakes made by the utilities.

According to an article in the LA Times ("Bush's Idea of Easing Smog Rules Won't Help, Experts Say," Jan. 25, 2001) with the exception of a small utility in Glendale, power plants around the state "are cranking out as many megawatts as possible to ward off blackouts."

MYTH: The Sierra Club supported California's energy deregulation.

FACT: The Sierra Club did not support California's energy deregulation because we thought it would not benefit consumers or the environment.

MYTH: Air pollution standards are unnecessary and too expensive.

FACT: Californians enjoy breathing cleaner air in part because we have taken sensible steps to reduce pollution from power plants and these limits have affected the price of electricity minimally.

According to an article in the LA Times ("Bush's Idea of Easing Smog Rules Won't Help, Experts Say," Jan. 25, 2001)

"Air quality rules in the Los Angeles region have had a role in raising the cost of power... But because only a fraction of the state's power is generated in the region, the overall price impact is limited."

And these pollution standards have helped clean-up LA's air pollution: In 1981 Los Angeles had 180 days where smog reached unsafe levels; in 1999, LA had only 42 unsafe days.

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