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Governor removes DOGGR supervisor from her post


| Thursday, Nov 03 2011 10:33 PM

Last Updated Thursday, Nov 03 2011 10:35 PM

The head of the state agency responsible for permitting and regulating crucial oil operations was removed from her post by the governor Thursday.

Elena Miller had been the top person at the Division of Oil, Gas, and Geothermal Resources since September 2009. Her boss, Derek Chernow, the acting director of the California Department of Conservation, was also removed.

"Both appointees served at the pleasure of the governor and were thanked for their service this evening," Evan Westrup, a spokesman for Gov. Jerry Brown's office, wrote in an email Thursday night.

Miller's time as DOGGR supervisor was marked by tensions between her office and the industry it regulated.

A lawyer regarded as an outsider unfamiliar with the technical side of the oil industry by some, Miller introduced lengthier scrutiny to underground injection projects, according to Californian reports. DOGGR has also been hesitant to allow high-pressure steam injection projects in the aftermath of a Chevron employee's June death in a oil field sinkhole. DOGGR representatives also said Miller was concerned that injections can pollute water sources and cause oil and fluids to leak to the surface.

The governor's move was hailed by state Sen. Michael Rubio, D-Shafter, and Les Clark, executive vice president of the Independent Oil Producers Agency, as recognition of the difficulties facing the oil industry.

"I think the governor made the right move and I appreciate that," Clark said. "You look through the process, there's a lot of permits that are being hung up."

Rubio, who has battled Miller over DOGGR's reluctance to permit new oil and gas operations in the state, praised Brown's decision, calling it "a clear sign the governor is engaged and committed to solving this issue."

"(DOGGR has) not been willing to partner with the private sector to create a clear permitting process," Rubio said.

And that, he said, has resulted in a lack of investment in oil and gas and the creation of jobs. He said that cost the state $10 to $12 million in tax revenues in recent months -- not to mention the impact to Kern County.

"We have worked diligently with the governor's administration to reduce the roadblocks for the oil and gas industries to receive permits," Rubio said in a news release. "As we all know, in Kern County, permits equal jobs."

Clark also applauded Brown's move, saying it could have been spurred by jobs and the economy. Clark said he thinks the next person to lead DOGGR should bring a common-sense approach to the job.

"I think we need to re-evaluate and work through the process," Clark said.

DOGGR spokesman Don Drysdale could not be reached for comment.

It was unclear Thursday night who would fill the DOGGR supervisor job, and whether a decision had been made.

Chernow will be replaced by Cliff Rechtschaffen, a senior advisor on energy, environmental and agricultural issues to the Governor's Office, according to Richard Stapler, spokesman for the California Natural Resources Agency.

Rechtschaffen served as a special assistant attorney general for 2007 to 2010 during Brown's tenure as attorney general, and taught at Golden Gate University School of Law from 1993 to 2007.

 
Summary of Sept 20th meeting at the California Energy Commission
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On Tuesday Sept 20, 2011, I attended the California Energy Commission Staff Workshop on Biomethane Delivered via the Natural Gas Pipeline System for California’s Renewable Portfolio Standard. The meeting was well attended, with over 100 people in the live audience, and many more attending via webinar. There were 2 separate panel discussions: Panel A – Pipeline Biomethane Delivered to California, and Panel B – Barriers to Instate Biomethane.


 PANEL A – PIPELINE BIOMETHANE DELIVERED TO CALIFORNIA
 During the Panel A discussion, the overwhelming majority (all but one opinion) was that NO changes should be made to the current biogas eligibility standards. Out of state biogas sources are being actively developed and delivered to markets in California to meet RPS goals.
Reasons for allowing the status quo:
1) The ability to permit and finance out of state projects
2) The current California law does not allow upgraded landfill gas into the utility pipelines in California
3) The ease of using the natural gas pipeline grid to deliver gas supply to California
4) The overall benefit to the environment by lowering greenhouse gas emissions; a great benefit to a large market such as California
5) The fact that California has such an aggressive renewable portfolio standard policy was noted, and it was suggested that if out of state biogas was disallowed then the state would have much difficulty in meeting their goals.
The Dissenters:
1. Potential California job loss
2. Questioned whether a project in another state could truly benefit the environment in California.


One setback for out of state biogas: 
One setback was noted in the Self Generated Incentive Program (SGIP).  SGIP supplies rebates to fuel cell projects in California that use renewable natural gas.  SGIP was amended to no longer allow out of state biogas to be included as a fuel eligible under the program. Although the market for renewable gas for SGIP projects was much smaller than RPS markets, this decision will most likely adversely affect the fuel cell market, and cause many fuel cell projects to be abandoned, as the California instate biomethane supply industry is virtually non-existent.


Overall:
There was a strong overall voice asking the CEC to keep the current eligibility standards in place.  It is well settled that legislative and regulatory uncertainty creates both supply and contract risk.


PANEL B – BARRIERS TO INSTATE BIOMETHANE
1.  Legislative and Regulatory changes are needed to remove these barriers
2. The Gas Technology Institute gave a status update on their study of landfill gas quality issues and stated that it is nearly complete and will be issued by the end of 2011. All their sampling is done and they noted that they examined several different gas clean-up technologies and found absolutely no traces of vinyl chloride, which was the primary concern when the law was first passed disallowing landfill gas into the pipeline system.
3. The challenge will be to convince the utilities and the regulators and to get the law changed, which will no doubt take some time.
4. Other speakers noted the difficulty in navigating the permitting and air quality landscape in California.
5. Others voiced some concerns about feedstock consistency, particularly in the dairy business.
All these barriers were reasons that those in attendance reiterated the importance of continuing to allow out of state pipeline delivery of biomethane into California.


IN CONCLUSION
              I do believe that the California Energy Commission staff was very understanding of the position of the majority in attendance and supports the current rules regarding directed biogas. The new RPS guidebook is due to be issued sometime during December 2011. At this time, I do not anticipate any changes in biogas eligibility, but be assured, I will be following this issue closely. DMJGAS.COM will continue to have the latest developments in this area.  Please feel free to contact me at any time with any questions and/or comments; I look forward to hearing from you.

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