SDGE and San Diego pollution expert debate LNG-derived pollution

[Hans Laetz, Newsgroup Editor]

By ONELL SOTO, SDUT

We asked SDG&E spokesman Art Larson to answer some questions via e-
mail about the use of LNG in the county, then ran his responses past
Bob Kard, who heads the San Diego County Air Pollution Control
District.

Question: The air pollution folks in San Diego aren't just concerned
about its use in vehicles, but also homes and businesses, and say that
its use in San Diego would lead to an additional 4 to 5 tons of
pollutants in our air. How do you respond to that allegation?

Larson: We believe the SDCAPCD's 4-5 tons per day estimate of emission
increases from LNG sourced gas is based on outdated and unsupported
assumptions. Unfortunately, the APCD does not have better information
at this time to rely upon.

SDG&E is working closely with the California Energy Commission,
California Air Resources Board, Lawrence Berkeley National Labs, Gas
Technology Institute, California State University Fullerton, SoCalGas
and SDCAPCD on research efforts to address these information gaps.

The research efforts include field studies and laboratory testing. We
believe once the research is completed and peer reviewed, the estimate
of emission increases and their impacts on air quality in San Diego
will prove to be negligible.

Kard: The District agrees that more research is required. However, the
District estimates of potential emissions are based on the best
information available and are sufficiently accurate to identify a
potential air quality impact from the use of LNG-derived natural gas
in place of our historic domestic supplies. Even much smaller
increases than the likely upper-end estimates of 4-5 tons per day are
reason for concern.

Q: Was this LNG-sourced gas approved for use in San Diego County in
October 2010?

Larson: The source of the natural gas is not relevant it is the
quality of the gas that is the issue. In 2006, the CPUC approved gas
quality specifications that were more stringent than they had been in
the past and all interstate and LNG sources of natural gas must meet
those requirements.

At that time the CPUC rejected more stringent gas quality
specifications proposed by South Coast AQMD (and supported by San
Diego APCD), because those specifications would have substantially
decreased the supplies of natural gas in California, which would in
turn have caused customers to pay more for their gas and electricity.

Kard: The PUC also rejected less stringent requirements supported by
SDG&E. A major purpose of the PUC proceedings was to set standards to
facilitate the sale of LNG-derived natural gas in California.

Larson: The October 2010 CARB exemptions ensure that all CNG fueling
stations stay open so that these clean transportation vehicles can
remain on the road. The exemption primarily addresses low inert levels
in both interstate and LNG sources of natural gas.

Kard: As discussed above, inert contents in domestic supplies to San
Diego could have been addressed with a much narrower exemption. In
fact, the exemption goes well beyond the inert content and allows the
use of any fuel that meets the CPUC standards. This potentially allows
the use of LNG-derived fuel with much higher propane or butane content
than is present in the existing domestic gas supply, or than is
allowed by the current CARB specification, to nearly all of San Diego.
This would further increase the emissions of VOCs from transmission
leaks in the SDG&E gas supply system beyond those already occurring.
This has the potential to increase ambient levels of ozone (VOCs along
with NOx are ozone precursors) sufficiently to cause exceedances of
the health-protective ambient air quality standards for ozone.

Larson: This is a benefit to all clean transportation customers and to
air quality in our region. Eliminating clean burning natural gas would
force these vehicle operators to either revert to dirtier vehicles,
such as diesel trucks, or otherwise stop operating their CNG vehicles
and shut down important public services.

Kard: The District fully supports the use of clean burning natural gas
vehicles. However, it does not support allowing the use of a
relatively more polluting LNG-derived natural gas unnecessarily.

Larson: The CARB exemptions are a "holding action" that ensures that
there are no disruptions in clean transportation fleet operations
(primarily local buses) while they deliberate on future fuel
specifications. We support this activity.

Kard: The only reason there would be a disruption on clean
transportation fleet operations is if SDG&E refuses to sell them clean
natural gas because its parent company, Sempra, refuses to treat the
LNG-derived natural gas it wishes to sell in San Diego in a manner
that mitigates its impacts on air quality.

Q:How much LNG sourced gas has actually been distributed here?

Larson: In 2010, approximately 118 billion cubic feet of natural gas
was delivered to San Diego County and 4.3% came from LNG-derived
natural gas arriving through the Otay Mesa receipt point.

Kard: It should be kept in mind that large amounts of gas did not
begin to flow through the Otay Mesa receipt point until late last
year. Thus, annual averages can be misleading. On one day, the net
amount of LNG-derived fuel supplied to San Diego through the Otay Mesa
receipt point was about 90% of the annual daily average (about 320
million standard cubic feet per day in 2010). It exceeded 30% on
several other days. SDG&E has not provided the District with
information on daily or hourly gas usage in San Diego so the exact
percentage of use on those days cannot be determined by the District.

Larson: The first arrival of LNG-sourced gas into the San Diego system
occurred in 2008 and was the subject of an emissions test by the San
Diego Air Pollution Control District. Those tests found that there
were insignificant or no increases in emissions and some of the
results even indicated lower emissions.

Kard: Some of the emission increases that were seen during the testing
are considered significant by the District. Moreover, the composition
of LNG-derived gas can vary over a wide range depending on its source.
The District has concluded that the composition of the LNG-derived
natural gas tested in 2008 was not sufficiently different from the
domestic gas to fully capture the magnitude of potential emission
impacts. In addition, most of the devices tested were those that were
better equipped to handle changes in gas composition.

Larson: The SDAPCD did not certify those results.

Larson: The total capacity of SDG&E's system is about 630 million
cubic feet of natural gas per day. The utility's gas demand on Jan. 4
was about 440 million cubic feet.

Q: Do you see a time when all our natural gas will come from Costa
Azul LNG? Does the terminal have enough capacity to do so?

Larson: It is not the terminal's capacity that is relevant. It is the
capacity of the cross border pipeline that can transport the gas,
which is about 400 million cubic feet per day. It is unlikely that all
of San Diego's natural gas needs will be met solely with LNG-sourced
natural gas from Energia Costa Azul.

Kard: LNG-derived natural gas can also enter San Diego from the North.

Larson: The terminal primarily supplies natural gas to customers in
Mexico.

Q: As Bob Kard explained it, gas from Costa Azul is hotter than our
current supplies. How do you measure the "temperature"? Is there a
number?

Larson: "Hot" gas is an imprecise way to describe a source of natural
gas which is richer or has higher BTU or energy content per volume
than another source of natural gas.

Kard: It is called hot because it actually burns with a higher flame
temperature in some devices.

Larson: The BTU content of some sources of natural gas brought into
the state via interstate pipelines from the Rocky Mountains, Texas or
Canada and many of California's native gas supplies, is the same as
that of LNG-sourced natural gas.

Kard: The key word in the above comments is “some.” The District
estimates that the BTU content of the domestic gas supplied to most of
San Diego is less than the BTU content of the LNG-derived gas that has
been supplied to San Diego to date more than 99.9% of the time over
the time period 2008–2009. The average BTU content of the domestic
supplies was also significantly less (about 1020 compared to about
1045). Other sources of LNG can have even higher BTU content.

Larson: In fact, much of the California natural gas used in the San
Joaquin Valley and in some areas of the Central Coast are similar in
heat content to the LNG derived gas we have received. These areas of
the state have used this gas for generations.

Kard: As discussed above, combustion devices can be tuned to operate
on a wide range of gas compositions. However, changes in gas
composition without retuning can cause significant increases in
emissions. In some cases, emissions may increase even with retuning.
In addition, there are potential VOC emissions increases associated
with the use of LNG-derived natural gas in San Diego from the gas
transmission and distribution system itself. Once again, this increase
is caused by a change in composition from our historic gas supply.

Larson: The Wobbe Index number is a heat density measure that is used
to determine interchangeability. The composition of natural gas can
change from one region of the U.S. to another or from one country to
another.

The CPUC maximum Wobbe Index is 1385. As a comparison, the gas from
Indonesia has a Wobbe number of 1372.

Kard: Recent SDG&E data indicates that the Wobbe Index of the LNG-
derived natural gas supplied to San Diego by Sempra to date through
the Otay Mesa receipt point is about 1378. The Wobbe Index of our
historic domestic supply is about 1335 in most of San Diego (it may be
slightly higher in the North Coastal region).

Q: What's the composition of the gas received at Otay Mesa?

Larson: Gas supplies received at Otay Mesa in 2010 had the following
gas composition range:

Methane: 94 - 98 %

Ethane: .4 - 5.3 %

Propane: 0.5 - 0.55 %

Butane: 0.02 - 0.22 %

n-Pentane: 0 - 0.03 %

Inerts (Nitrogen / CO2):0.1 - 1.8 %

The gas received at Otay Mesa met all the CARB specifications with the
exception of minimum inert levels.

Q: What is the composition for domestically sourced gas?

Larson: Natural gas supplies delivered to San Diego in 2010 had the
following gas composition range:

Methane: 95.6 - 97.6 %

Ethane: 0.73 - 2.5 %

Propane: 0.1 - 1.51 %

Butane: 0.03 - 0.22 %

Pentane: 0.02 - 0.21 %

Inerts (Nitrogen / CO2): 0.12 - 1.93 %

Kard: It is difficult for the District to comment precisely on the
historical or current gas compositions for San Diego County since
SDG&E has refused to provide the District with this information in the
detail necessary to make meaningful comparisons. However, since it
refers to “gas supplies delivered to San Diego,” it is not clear
whether the answer above includes LNG-derived natural gas which began
arriving in San Diego in late 2010 through the Otay Mesa receipt
point. In addition, some LNG-derived natural gas entered San Diego
County from the North in early 2010. Thus, the above information may
be distorted by the presence of LNG-derived natural gas in the system.
The above comment only provides ranges of composition without any
information regarding the average and the extent of variation from
that average.

It should be noted that SDG&E has recently even refused to supply the
District with gas composition information regarding routine regulatory
matters unrelated to LNG. Also, the composition of LNG can vary widely
depending on where it is purchased, which in turn depends on market
conditions and contracts (see attachment). LNG purchased on the spot
market could be expected to have much wider composition ranges.

Q:What's are the PUC and CARB standards for Inert Gases?

Larson: There is no CPUC minimum limit for inert gas but there is a
CPUC maximum limit for inert gas. The CARB specifications adopted in
1992 include a minimum limit for inert gases, because of the need back
then of certain CNG vehicle engines for inert gases that would allow
their oxygen sensors to work properly.

Today's modern CNG engines do not need inert gases for their oxygen
sensors to operate properly. CARB is in the process of reviewing and
updating these CNG specifications in light of modern CNG engine
technology.

Kard: There may be a significant number of older CNG vehicles on the
road that may be impacted.