Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
118564818
label
Issue Papers - Energy Crisis (2 of 2)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
118564818
contentType
document
title
Issue Papers - Energy Crisis (2 of 2)
citationUrl
identifierLocal
840
collections
Ronald Reagan's Governor's Papers of the Press Unit
Issue Files
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
118564818
coverageEndDate
logicalDate
1975-12-31
year
1975
coverageStartDate
logicalDate
1967-01-01
year
1967
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
64df1e04a636d006
ocrText
Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Reagan, Ronald: Gubernatorial Papers,
1966-74: Press Unit
Folder Title: Issue Papers - Energy Crisis (2 of 2)
Box: P30
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
PROJECTED CALIFORNIA ENERGY BALANCE
FIRST QUARTER 1974
Contents
Page
Summary
1
Introduction
3
General
4
California Basic Energy Supply Summary
8
California Basic Energy Supply Sources
9
California Petroleum Product Supply Forecast
10
California Petroleum Product Demand Forecast
11
California Petroleum Product Balance Forecast Summary
12
Appendix A - Unconstrained Transportation Demand
Appendix B - California Agriculture Energy Utilization,
Conservation, and Energy Allocation Impacts
Appendix C - California Fossil and Geothermal Energy Supplies
Appendix D - Hydro, Nuclear and Geothermal Electrical
Generation
-1-
Summary
California has become dependent on out-of-state sources for well over
half of its total energy supply. In addition to declining production
of oil and gas within the State, outside supplies have been interrupted,
curtailed, or otherwise restricted as follows: Arab nations oil embargo,
250,000 barrels per day (B/D); natural gas imports from the East by
contract, 336,000 MCF/D (58,000 B/D oil equivalent) curtailment*; and
anticipated additional natural gas deliveries from Canada not realized
(export permit denied), 200,000 MCF/D (35,000 B/DOE).
Further complicating the State's energy situation is the 60,000 B/D
abnormal overseas military demand for petroleum products from California
because of the Arab nations embargo; the State's share is about twice
the per capita share of the United States as a whole. This, however,
is balanced by increased foreign imports of petroleum products from
other sources. Standards for sulfur content of fuels prevent burning
of oil containing more than one-half percent sulfur in many parts of
the State. California has no significant supplies of commercial coal
readily available as an alternative fuel for gas or oil.
Oil supply restrictions have materially reduced refinery output while
gas supply restrictions and normal growth have increased petroleum
product demand. The net effect is a projected petroleum product
supply-demand deficit for the first quarter 1974 of 535,000 B/D or
25 percent of demand, exclusive of net inventory changes.
The most critical shortage is in residual fuel oil supplies. Present
inventories held by utilities, with vigorous statewide electrical
conservation measures and equalizing exchanges between utilities could
prevent blackouts well into Spring. Actual delivery of all oil committed
under "firm" contract and of oil for which negotiations are in an advance
stage, together with vigorous statewide conservation and equalizing
exchanges, could carry the State's electrical utilities through the
year without intentional blackouts. Any major short-fall in actual oil
deliveries could result in drastic electrical curtailments, including
blackouts, before the end of the year. However, the recent relaxation
of the Arab embargo to most other nations will tend to make oil from
other foreign sources much more readily available.
Distillates, including diesel fuels, will be in short supply in the
first quarter, aggravated by demands for low sulfur fuel alternatives
for natural gas and by overseas military needs. Inventories of
distillates appear to be about normal for this time of year and
inventory depletion will make up a considerable part of the production-
demand deficit.
Gasoline demands in January will probably be brought into balance with
supply by a combination of increased conservation measures, allocation
programs, and higher prices. Significantly greater supply-demand
imbalances in February and March may require additional measures.
Gasoline inventories are generally well below normal. The Federal
Energy Office is preparing a "stand by" rationing program for possible
imposition in March; ration coupon plates are presently being engraved
by the Federal Government.
-2-
Jet fuels will also be in short supply in January and February with
some easing forecast for March. Allocations to civil air carriers and
between civilian and military uses are controlled by the Federal Energy
Office. Inventories may be able to alleviate any severe hardships in
January and February.
Supply-demand forecasts have not been prepared individually for other
petroleum products. However, as a group, demand will exceed supplies
at least until adequate availability of crude oil enables refineries
to return to near-capacity production.
*Note: Anticipated actual delivery curtailment: January, 433,000 MCF/D
(75,000 B/DOE); February, 493,000 MCF/D (83,000 B/DOE); and March
308.000 MCF/D (53.000 B/DOE)
-3-
Introduction
Preparation of the following report was authorized by the State Energy
Planning Council on December 12, 1973. It was prepared by an inter-
agency group, serving as staff to the Council, consisting of personnel
from the Department of Conservation (including the Division of Oil and
Gas), Transportation, Agriculture, and Water Resources, with major
assistance from the Public Utilities Commission, the Office of Planning
and Research, and the Office of Emergency Services. Assistance and
information was also provided by a number of other State agencies.
The findings and conclusions presented herein represent the group's
best objective evaluation as of this date of the energy situation in
California for the first quarter of 1974. It should be regarded as
preliminary. The total energy picture is very complex and the present
situation for both supply and demand is extremely fluid. New data
becomes available daily and new developments are commonplace. Many
of the sources of supply are highly variable both as to area of
origination and as to quantities available. Federal regulations,
programs, and directives change with regularity. The market areas
for energy vary from product to product and from time to time.
California's boundaries rarely coincide with source areas, marketing
and demand areas, or with reporting or statistical units for either
category or for various subdivisions thereof.
Information was gathered from every source available within the time
limits required to prepare the report. These sources, in addition to
State agencies, included: U.S. Bureau of Mines, U.S. Customs Offices
(Los Angeles and San Francisco), Federal Energy Offices (Washington
and San Francisco), Federal Office of Oil and Gas, U.S. Department of
Defense (various offices), the Nevada Tax Commission, the California
Oil Conservation Committee, the American Petroleum Institute, Southern
Pacific Railroad, and various oil companies and utilities located in
California.
The report drew heavily on energy reports prepared by the California
Resources Agency, the Rand Corporation, Stanford Research Institute,
the California Department of Agriculture (with U.C. Davis), and the
publications of various federal agencies.
Assistance provided by the Western Oil and Gas Association, and by
Sherman H. Clark Associates through the courtesy of Southern California
Edison, was especially helpful.
The individual factors that combine to make up the present energy
deficit in California are largely a matter of public record as to
natural gas curtailments and export permit denials, amount of petro-
leum imports, and decline in State oil and gas production. Historic
demand growth projections are well known and the amount of overseas
military demand, while not officially released, is more or less
common knowledge within the petroleum industry.
-4-
State of California
OF
ENERGY PLANNING COUNCIL
ELEVENTH AND L BUILDING, ROOM 704
1127 ELEVENTH STREET
CALIFORNIA
SACRAMENTO 95814
RONALD REAGAN
GOVERNOR
January 3, 1974
PROJECTED CALIFORNIA ENERGY BALANCE
FIRST QUARTER 1974
General
In January 1973, oil and gas provided 91.5% of California's total energy
supply of 3,352,000 equivalent barrels per day of crude oil (B/DOE).
California oil production peaked in 1968 and has since declined annually;
its natural gas production peaked in 1966. Progressive curtailment of
natural gas imports began in November 1972. In January 1973, the State
was dependent on out-of-state sources for 59.9% of its energy supply,
including 31.8% from foreign sources. Imports, particularly of crude
and residual fuel oils, increased further until November 1973.
The petroleum refining capacity of the State has not increased signifi-
cantly since 1969. Major California refineries were operating at near
capacity for much of 1973 but production only barely kept pace with
demand for most products. A number of independent refineries in the
San Joaquin Valley were operating at well below capacity because of a
shortage of crude oil. A voluntary allocation program for gasoline
went into effect in May, and a mandatory allocation program for propane
was imposed by the federal government on October 3. The announced
sharp increase in curtailment, to 336,000 MCF/day (58,000 B/DOE), of
natural gas from the 4 Corners area, effective January 1, 1974, plus
a moratorium on a contract for an anticipated 200,000 MCF/day additional
natural gas (34,500 B/DOE) from Canada created a greatly increased
demand for low sulfur residual and crude oils and, to a lesser extent,
for distillates as auxilliary fuels for large gas users during periods
of interrupted gas delivery.
The Arab nations oil embargo caused a decrease of about 250,000 B/D in
oil imports by late November, although about 60,000 B/D of this decrease
was offset by increased imports from other foreign sources during December.
A side effect of the embargo is the curtailment of oil supplies to U.S.
military forces from overseas sources which requires that those forces
be supplied from the United States. About 60,000 barrels per day is
supplied from California over and above that normally required before
the embargo.
The forecast for California petroleum products supply in the first
quarter of 1974 assumes continuation of both the Arab nations embargo
and the 60,000 B/D increased imports from non-embargo foreign sources
through February 1974 as well as continued overseas military demands.
-5-
Immediate resumption of Arab nation imports at the pre-embargo level
plus continuation of present higher level imports from other foreign
sources could cut the anticipated overall petroleum product balance
deficit by about 43% in February and by about 72% in March, reducing
the total deficit forecasts to 18% and 6% of demand, respectively.
California's projected overall energy supply shortage from all sources
for the first quarter 1974 is about 15.7% of total demand. This short-
age is reflected in a 25% supply-demand deficit in petroleum products.
The petroleum shortage forecast for the State is nearly twice the
13.6% shortage predicted for the Nation as a whole for the first quarter
(Petroleum Situation Report, Week Ending December 14, 1973, Federal
Energy Office). California has been exceptionally impacted relative
to the rest of the U.S. by diversion of natural gas, a double (per
capita) share of overseas military demands, earlier decline of in-State
oil and gas production, and lack of available coal as an alternative
fuel.
An informed Washington source indicates that the military on at least
one occasion has declined to take oil from other foreign sources for
overseas supply, preferring instead to requisition from the U.S. because
of lower prices. Most U.S. oil is subject to price control.
Residual Fuel Oil
The most immediate and critical fuel shortage is in low sulfur crude
and residual fuel oil for direct burning in power plants and industrial
plants, especially as replacement for interrupted natural gas deliveries.
Assuming unconstrained electrical demand, normal electrical deliveries
from out-of-state, and continuation of the Arab nations embargo, these
deficits would be' 317,000 B/D (48.7%), 454,000 B/D (57.1%), and 336,000
B/D (50%) in January, February, and March, respectively. Present
recoverable oil inventories of the various utilities alone, estimated
at 26.9 million barrels, would cover these deficits through mid-March
if the inventories were distributed pro-rata among the utilities. A
net 15% Statewide conservation in electrical use would stretch these
inventories, alone, into mid-April if distributed pro-rata.
In addition to current inventories, utilities have an additional 94.2
million barrels of fuel oil under "firm" contract for the remainder
of 1974 and another 18.8 million barrels in advanced stages of contract
negotiation. If all this fuel is actually delivered in a timely manner
and distributed pro-rata, with a net 15% effective Statewide conservation
program the State's residual fuel oil needs could be met for the entire
year without invoking blackouts or brownouts. However, based on recent
events and rapid price increases, there appears to be no such thing as
an absolutely firm contract with some overseas suppliers. If only
half of the "firm" contract and "advance negotiation" oil is actually
delivered and distributed pro-rata, with an effective 15% Statewide
conservation saving, the State's needs could still be met without
significant interruption through July 1974. Current higher than
anticipated electrical deliveries from the Pacific Northwest would
extend this grace period. The end of the Arab nations oil embargo
would probably assure delivery of at least the amount of oil under
firm contract. The recent relaxation of the Arab nations oil embargo
to most other nations will tend to make oil supplies from other foreign
sources much more readily available.
-6-
Depletable refinery invenventories of residual fuel oil appear to be
practically non-existent.
Distillates
Distillates, which include diesel fuel and home heating oils, will be
in short supply in the first quarter of 1974. The demand forecast is
based on historic uses. However, an unusually large volume of these
oils is now also in demand as a low sulfur fuel alternative for
natural gas. Since there is no real history for this kind of demand,
there is no reasonable way to estimate its magnitude. In addition,
military overseas demands occasioned by the Arab nations embargo are
particularly heavy in the distillate range. These two unquantified
but significant factors will probably increase demands at least 10%
and possibly as much as 30% beyond those indicated in the forecast
tables.
Fortunately, inventories of distillates appear to be about normal for
this time of year. Depletion of these inventories plus slightly
increased percentage yields by refinery shifts from gasoline production
should alleviate much of the anticipated deficit. However, at best,
distillate supplies will be tight in the first quarter.
Gasoline
Demand figures used in the gasoline forecast estimate are based on
about a 7% reduction below projected unconstrained demand. The
combination of the voluntary allocation program (until January 15)
and federal mandatory allocation program (after January 15) for gasoline
and the lowered speed limit, plus a concerted public information and
education effort, should offset the remaining 8.4% estimated supply-
demand deficit for January without undue dislocation. The larger
February and March estimated deficits (21.7% and 21.0%) will present
much greater difficulties; whether they can be managed by the allocation
program without serious economic dislocation remains to be seen. There
will undoubtedly be heavy pressure for upward adjustment of refinery
yields in favor of gasoline production at the expense of other products.
In view of the generally more critical need by the economy for other
petroleum products, such as distillate (including diesel fuel) and
residual fuel oil, these pressures should be resisted until an adequate
supply of these other products is assured.
Gasoline inventories are well below normal for this time of year.
Supply-demand deficits probably cannot be significantly reduced by
inventory depletion, at least not in the first quarter.
Jet Fuels
Jet fuels are projected to be in short supply during January and
February but adequate supplies are indicated for March. The demand
forecast, however, does not include overseas military demands for
jet fuels occasioned by the Arab nations embargo. An unquantified
but considerable volume of jet fuel is included in the approximate
60,000 B/D of petroleum products diverted from California to meet
this demand. Inventories may be able to alleviate any otherwise
severe hardships in January and February.
-7-
Allocation of jet fuels to civil air carriers and between military
and civilian users is under the control of the Federal Energy Office.
This seems appropriate since both the supply and demand for these
fuels is primarily national and international in scope.
Other Petroleum Products
Other products include: ethane, liquid refinery gases (LRG), liquid
petroleum gases (LPG), kerosene, petrochemical feedstocks, special
napthas, lube oil, wax, coke, road oil, still gas, and other
miscellaneous.
Supply and demand figures have not as yet been developed for individual
products. Overall, this category appears to be in short supply for
the first quarter. This primarily reflects reduction of refinery runs
due to curtailed crude oil supplies. Shortages of petrochemical
feedstocks and lube oils had already developed in 1973. The Federal
Energy Office may elect to correct inequitable regional distribution
of petrochemical feedstock if the situation warrants.
Deficits of many of these products will probably continue until
sufficient crude oil becomes available to enable refineries to return
to near capacity operation.
Employment Trends
On December 1, 1973, the Department of Human Resources Development
began to classify initial claims for determination of unemployment
benefits as to energy-related job losses. Through December 28, 9628
such claimants had been identified. Nearly half were due to decline
in the manufacture of recreational vehicles. A large number were
also formerly employed in seat-belt manufacture. Other fields in
which lay-offs were noteworthy include service stations; hotels,
motels, and restaurants; manufacturers using petrochemicals; automobile
assembly; and a Portland cement plant.
CALIFORNIA BASIC ENERGY SUPPLY SUMMARY
Equivalent Thousands of Barrels/Day of Crude Oil
First Quarter 1974
January
February
March
CRUDE OIL
California
910
915
920
Other States
95
95
95
Foreign2
/
375
375
375
Refinery Processing Gain
42
42
43
TOTAL Crude Oil
1,422
1,427
1,433
IMPORTED PETROLEUM PRODUCTS
Residual
45
45
45
Finished Products, Diesel,
Fuel Oil, Gasoline, Jet Fuel,
and Unfinished Products
5
5
5
Other Hydrocarbons and
Unfinished Oil
100
100
100
TOTAL Petroleum Products
150
150
150
LIQUID PETROLEUM GAS
California
Propanes/Butanes
22
22
22
Ethane
7
7
7
TOTAL Liquid Petroleum Gas
29
29
29
NATURAL GAS (1000 mcf/day)
California-
207 (1,200)
207 (1,200)
207 (1,200)
Other States
750 (4,350)
733 (4,250)
767 (4,450)
TOTAL Natural Gas
957 (5,550)
940 (5,450)
974 (5,650)
ELECTRICITY
/
(million kwh/mo)
Hydroelectricity
99 (1,790)
104 (1,709)
115 (2,083)
Nuclear Electricity
18 ( 335)
19 ( 305)
19 ( 338)
Geothermal Electricity
15 ( 267)
15 ( 241)
15 ( 267)
Imported Electricity
148 (2,681)
150 (2,456)
138 (2,512)
TOTAL Electricity
280 (5,073)
288 (4,711)
287 (5,200)
COAL (Imported) (Tons/day)
17 (4,350)
17 (4,350)
17 (4,350)
GROSS ENERGY SUPPLY
2,855
2,851
2,896
EXPORTS
Foreign (coke & high sulfur fuel oil)
100
100
100
Interstate (petroleum products; Ariz.,
Nev., Oregon)
186
186
186
Military Overseas (petroleum products)
60
60
60
TOTAL Exports
346
346
346
NET ENERGY SUPPLY (Gross Less Exports)
2,509
2,505
2,544
1/ Includes 48,000 barrels per day Federal offshore California.
2/
Includes minor amounts from Alaska.
3/ Includes 23,000 MCF/D Federal offshore California.
11
CALIFORNIA BASIC ENERGY SUPPLY SOURCES*
In-State VS. Out-of-State**
(Equivalent Thousands of Barrels per Day of Crude Oil)
January 1973
January 1974 (est.)
Out-of-
Total
%
% Out-of-
Out-of-
%
% Out-of-
Calif.
Calif.
Total
State
Calif.
State
State
Calif.
State
Crude oill/
929
1026
1955
47.5
52.5
904
668
1572
57.4
42.6
LPG and Ethane
15
0
15
100
29
0
29
100.0
Natural Gas
302
7902/
1092
27.6
72.4
203
754
957
21.3
78.7
Electricity3
1023/
171
273
3/
1143
/
/
166
280
Coal
17
17
100.0
17
17
100.0
Totals
1348
2004
3352
40.1
59.9
1250
1605
2855
43.6
56.3
California and Other States VS. Foreign
(Equivalent Thousands of Barrels per Day of Crude Oil)
%
%
%
%
Domestic
Foreign
Total
Dom.
For.
Domestic
Foreign
Total
Dom.
For.
Crude Oil
1078
877
1955
55
45
1047
525
1572
66.6
33.4
LPG and Ethane
15
0
15
100
29
0
29
100.0
2
/
Natural Gas
904
188
1092
82.8
17.2
769
188
957
80.3
19.7
Electricity
273
273
100
280
0
280
100.0
--------
Coal
17
-----
17
100
-----
17
0
17
100.0
Totals
2287
1065
3352
68.2
31.8
2142
713
2855
75
25
*
Does not include burning of wood, wood-chips, sawdust, lignite, and other minor sources.
**
Includes foreign.
Includes imported refined products, unfinished oils, and refinery processing gain.
2/
Reflects a curtailment of about 200,000 MCF/D below contract volumes from 1972,
3/
California figures do not include electricity generated by fossil fuel plants within the State. To include same
would result in counting some of the same basic energy sources twice.
CALIFORNIA PETROLEUM PRODUCTS SUPPLY FORECAST
*
(Thousands of Barrels per day)
Refined Products:
January
February
March
Calif.
Imports
Subtotals
Calif.
Imports
Subtotals
Calif.
Imports
Subtotals
Refinery
Refinery
Refinery
Output
Output
Output
Motor Gasoline
652
652
590
590
609
609
Aviation Gasoline
9
9
6
6
6
6
Jet Fuel (Nap)
44
44
60
60
55
55
Jet Fuel (Kero)
100
100
121
121
144
144
Distillate
200
200
226
226
182
182
Residual Fuel Oil
290
45
335
296
45
341
290
45
335
-10-
Other **
227
5
232
228
5
233
247
5
252
Total Refinery Products
1522
50
1572
1527
50
1577
1533
50
1583
From California Oil Field Gas Plants:
Liquid Pet. Gas
22
22
22
22
22
22
Ethane
7
7
7
7
7
7
Total from Gas Plants
29
29
29
29
29
29
Total California
Petroleum Products
1551
50
1601
1556
50
1606
1562
50
1612
* 1. Based on 1972 yield patterns except where necessary to restrict otherwise expectable motor gasoline output
to 95% of corresponding month of 1972, as per Federal Energy Office regulations.
2. Assumes Arab nations embargo continues in effect at least through February.
3. Assumes continuance of slightly higher rate of crude oil imports from non-embargo nations.
4. Assumes normal pattern of inventory management by major suppliers. Inventory volumes of users, other than
utilities, are unknown.
Includes: ethane, liquid refinery gases, kerosene, petrochemical feedstocks, special napthas, lube oil,
iellug
CALIFORNIA PETROLEUM PRODUCT DEMAND FORECAST *
(Thousands of Barrels per day)
Demand from within California:
January
February
March
Product (use)
Detail
Subtotals
Detail
Subtotals
Detail
Subtotals
Gasoline
1)
607
646
663
Jet Fuels
170
197
160
2)
2)
2)
Distillate
172
160
142
Residual
487
671
474
(Power Plants)
352
364
284
(Industry, Marine)
135
307
190
Other
281
302
255
Total demand
within California
1717
1976
1694
Outside demand for California petroleum products:
From/product
Arizona:
Gasoline
1)
80
80
80
Distillate
13
13
13
Residual
18
18
18
Nevada:
Gasoline
1)
26
26
26
Distillate
10
10
10
Residual
4
4
4
Oregon:
Gasoline
1)
9
9
9
Distillate
26
26
26
Foreign:
Hi sulfur fuel oil
30
30
30
Hi sulfur coke (equiv. bbls) 70
70
70
U.S. military overseas:
3)
3)
Undifferentiated
60
60
60
3)
Total outside demand
346
346
346
Total demand for
California products
2063
2322
2040
*
Based on historic demand and growth rates as adjusted to reflect: (1) preliminary
indications of fuel conservation measures in late 1973 in use of gasoline and jet
fuel; and (2) significantly increased demand for residual fuel oil to replace
sharp curtailment of natural gas imports, modified by 10% Statewide electrical
conservation and current high rate of electrical imports from the Pacific Northwest.
1) Includes aviation gasoline.
2) The amount of increased demand for distillates resulting from curtailment of natural
gas supplies has not been determined and is therefore not fully reflected in these
figures.
3) Conservative approximation. Figures not available on products or total. The end
of the Arab nations embargo will be reflected more quickly by a decrease in this
demand figure than by an increase in California refinery output figures because of
transportation time differentials.
CALIFORNIA PETROLEUM PRODUCT BALANCE FORECAST SUMMARY
(Thousands of Barrels per day)
January 1974
February 1974
March 1974
Product
% of
% of
% of
Supply
Demand
Balance
Supply
Demand
Balance
Demand
Supply
Demand
Balance
Demand
Demand
Gasoline
/
661
722
(61)
(8.4)
596
761
(165)
(21.7)
615
778
(163)
(21.0)
Jet Fuels
144
170
(26)
(15.3)
181
197
(16)
(8.1)
199
160
39
24.4
Distillate
200
221
(21)
(9.5)
226
209
17
8.1
182
191
(9)
(4.7)
Residual
2/
335
539
(204)
(37.9)
341
723
(382)
(52.9)
335
526
(191)
(36.4)
Others
3/
256
351
(55)
(17.7)
257
372
(115)
(30.9)
276
325
(49)
(15.1)
Undifferentiated
54/
605/
(55)
54
605
(55)
54/
605/
(55)
TOTALS
1601
2063
(462)
(22.8)
1606
2322
(716)
(30.8)
1612
2040
(428)
(21.0)
/ Includes aviation gasoline.
Includes crude oil for direct burning; demand figures reflect 10% Statewide electrical conservation and current
high rate of electrical imports from the Pacific Northwest.
3/ Includes: refinery ethane, liquid refinery gases, ethane and LPG from oil field gas plants, kerosene, petro-
chemical feedstocks, special napthas, lube oil, wax, coke, road oil, still gas, and other miscellaneous.
4/ Miscellaneous imported refined products, not differentiated.
5/ Conservative approximation of U.S. military overseas demand since beginning of Arab nations embargo; not
differentiated by product.
UNCONSTRAINED TRANSPORTATION DEMAND - 10⁶ GALLONS/MO.
(Parenthesized figures are 1000 bbl/day equivalent oil)
Jan
Feb
March
1974
GASOLINE (Highway)
Civilian
862.1
843.7
868.9
10,500
Military
1.1
1.1
1.1
13
U.S. Government
1.7
1.4
1.6
17.7
Export
9.8
9.5
10.7
147
Sub-Total
874.7 (607)
855.7 (654)
882.3 (612)
10,677.7 (623)
GASOLINE (Non-Highway)
Agriculture
12.9
15.3
21.1
184.7
Contractors
.6
.7
.8
7.6
Producer-Distributors
.2
.2
.3
2.8
Lumbering-Quarrying
.3
.3
.2
2.8
Marine
2.2
2.9
5.5
60.8
Miscellaneous
3.5
3.5
4.5
42.8
Sub-Total
19.7 (14)
22.9 (17)
32.4 (23)
301.5 (18)
TOTAL
894.3 (621)
878.6 (671)
914.7 (635)
10,979.2 (641)
L.P.G. (Highway)
Trucks, etc.
.2 (.11)
.3 (.16)
.3 (.16)
3.0 (.13)
L.P.G. (Non-Highway)
Misc. Shop & Yard Equipment
-
DIESEL (Highway)
Trucks & some buses
64
62
66
772
Municipal Transit
3.2
3.1
3.3
39
Sub-Total
67.2 (53.0)
65.1 (56.3)
69.3 (54.5)
811 (53.8)
DIESEL (Non-Highway)
Agriculture
.5
.7
.8
Contractor
10.3
9.3
10.3
121
Marine
9
8
9
108
Military
9.5
8.6
9.5
112
Producer-Distributor
3.8
3.4
3.8
45
Rail
27
25
27
324
Sub-Total
60.1 (47.4)
55.0 (47.6)
60.4 (47.5)
710 (47.1)
TOTAL
127.3 (100.4)
120.1 (103.9)
129.7 (102.0)
1,521 (100.9)
-2-
Jan
Feb
March
1974
RESIDUAL FUELS
Marine
80
80
80
966
Military
46
42
46
546
Rail
.025
.023
.025
.3
TOTAL
126.025 (99.3)
122.023 (106)
126.025 (99.3)
1,512.3 (100.
AVIATION GASOLINE
General
4.0
4.0
3.5
49
Agriculture
.1
.4
1.5
Military
8.5
7.0
7.0
90
Exports
.4
.5
.6
7.5
TOTAL
13.0 (9.0)
11.9 (9.1)
12.6 (8.7)
146.5 (8.6)
JET FUEL
General
1.1
1.3
1.4
21
Commercial
145
150
155
1,850
Military
48
82
36
966
TOTAL
194.1 (150)
233.3 (198)
192.4 (149)
2,837 (185)
ELECTRICITY (10⁶ kwh)
BART
9.5
9.6
9.7
125
SF Muni
5.3
4.8
5.3
62
Misc (Golf carts, forklifts,
etc.)
TOTAL
14.8 (.8)
14.4 (.8)
15.0 (.8)
187 (.8)
GRAND TOTALS (1000 B/DOE)
(980.6)
(1,089.0)
(995.2)
(1,037.1)
APPENDIX B.
State of California
Memorandum
To
:
Mr. Wesley G. Bruer
Date:
December 24, 1973
From : ENERGY PLANNING COUNCIL
Room 704, 11th and L Bldg., Sacramento 95814
Subject: CALIFORNIA AGRICULTURE ENERGY UTILIZATION,
CONSERVATION, AND ENERGY ALLOCATION IMPACTS
UTILIZATION
Agriculture in California, and in the Nation, utilizes a variety of energy
sources. Agriculture is unique in significant utilization of solar energy.
It is this biological conversion process that enables California agriculture
to be a minimum user of the common energy forms.
An in-progress study of 1972 energy utilization by California agriculture
examines the use of six energy forms: natural gas; electricity; diesel and
fuel oil; LP gas, propane, and butane; and aviation fuel. The preliminary
report shows that all forms combined account for only 38.985 million barrels
of crude oil equivalent.
The report identifies various utilization categories and the corresponding
energy form consumption amounts through first level processing. 1) In
millions
of barrels of crude oil equivalents, 1972 all categories utilization was as
follows:
CRUDE OIL EQUIVALENT UTILIZATION
ENERGY FORM
(MILLIONS OF BARRELS)
Natural Gas
21.410
Electricity
6.119
Diesel and Fuel Oil
6.590
Gasoline
3.818
LP Gas, Propane, Butane
.856
Aviation Fuel
.192
38.985
Table I shows California energy flow in 1971. Agricultural use of each of the
energy forms shown is a relatively low percentage of the California total.
1) First level processing includes transportation to and processing by major
processors (canners, packers, freezers, etc.).
-2-
Table 1 - CALIFORNIA ENERGY USE
In Millions of Units
Energy Source
Unit
Total (1971)
Agriculture
%
(1972)
Natural Gas
Therms
22,166
1,241
5.6
Electricity
KWH
131,400
10,400
7.9
Diesel
Gal
2,374
273
11.5
Gasoline
Gal
9,976
179
1.8
LP Gas
Gal
448
53
11.8
California Energy Flow in 1971. By Mark Henwood, Interdisciplinary
Systems Group, Mechanical Engineering Department, University of
California, Davis, July 1973.
CONSERVATION
Conservation efforts will have minimal--probably not measurable--effects on
total energy utilization by California agriculture. First, that percentage
of the total energy annually consumed in California by all users is extremely
small (between 4 and 5%). Second, competitive marketing and narrow profit
margins historically have mandated efficient energy utilization on the farm.
Third, there appear to be no major management procedural or cultural modifi-
cations which could be applied uniformly. Fourth, decreased utilization at
one production level may require an excessive increase in utilization in a
later level.
Nevertheless, individual voluntary efforts can be made. Education in the
need for energy conservation and energy conservation techniques such as
preventative maintenance (including engine tune-ups), proper tire inflation,
better use of integrated pest management, more precise fertilizer use, broader
use of drip irrigation, use of soil moisture measuring techniques to determine
irrigation needs, increased use of the minimum tillage concept, combination of
cultural operations, matching horsepower to job requirements, and fuel storage
in a manner that minimizes volatilization losses; will help to develop a
positive conservation attitude.
Certain drastic measures are possible. They are based upon:
1. Distinguishing between essential and nonessential agricultural
endeavors.
2. State and national priorities.
-3-
California agriculture is extremely diverse; so, it is well to distinguish
between producers, processors, and distributors of food and fiber and those
segments which are devoted to forestry (including silviculture) and nursery
and floriculture. However, it would be a drastic measure to curtail or cease
energy allocation to the latter because the economic impact would be very
great. The 1971 wholesale value of nursery and floricultural products alone
was over $250 million. Annually that value has been increasing greatly and
the total dollar impact probably is four or five times the wholesale value.
Further distinction could be made between the food and fiber sections. Food
production, processing, and distribution seems clearly to be of the highest
priority. Fiber and forestry production, processing, and distribution could
be second. Nursery and floriculture could be third in this ranking.
Farm vehicles may provide little opportunity for energy conservation; but,
more careful planning of farm trips and better use of telephone and car radio
communications would be helpful.
ALLOCATION IMPACTS
Current Federal LPG, gasoline, middle distillate, and aviation fuels allocation
programs, whether voluntary or mandatory, generally give or will give producers
and processors of food priority status. Agricultural aviation should have
priority status when regulations are introduced to handle aviation separate of
the middle distillate fuels allocation program.
The proposed middle distillate fuels allocation program permits delivery based
on a 110% of 1972 corresponding usages. Allocation on that basis could present
problems because use in a given month is not only seasonal but is highly sub-
ject to weather conditions. In fact, 1972-73 weather conditions were exceptionally
inclement such that fuel consumption was only 68.2% of the 1971-72 figure. 2)
Limiting allocation to 1972 also would tend to limit production to the 1972
level; result in crop production shifts from high-investment, high-energy
crops to lower-investment, lower-energy crops; or result in crop losses due
to farm planting as though no shortage existed. In the latter case, the lack
of anticipated supplies could lead to a situation in which the farmer is unable
to adequately care for any of his plantings with corresponding crop losses the
result.
Limiting production to 1972 levels seemingly is in conflict with Secretary of
Agriculture Butz's plan for reducing food prices and increasing production and
allowing agriculture to contribute its fair share to the balance of payments.
This plan seems to place national priority on increasing food production. If
this be so, allocation to production, processing, and distribution of food
should be 100% of whatever is "needed." Who can, will, and should make "need"
determinations is another question.
2) The Winding Down of the West-What The Energy Crisis Means to California;
Assembly Office of Research, California Legislature; December 1973.
-4-
Diesel fuel cuts would affect ground preparation and harvest operations first.
Second affected would be frost protection. In order of usage, the industries
affected would be vegetable crops, livestock, and fruit and nuts. Many green-
house operations are also dependent on diesel fuel for heating and cutbacks
could cause bankruptcy.
Natural gas cuts would affect the fertilizer manufacturing, sugar refining,
canning and processing, nursery and floriculture, and container manufacturing
industries. The fertilizer manufacturing and greenhouse industries would be
seriously affected.
Gasoline would affect small truck and pick-up uses mostly. To a lesser extent
it would affect tractor operations. Most newer tractors are diesel-powered.
Electricity cuts would affect irrigation operations most. In 1972, almost
7 billion kilowatt hours (KWH) out of a total of 10 billion KWH used by
California agriculture was used for water pumping. The livestock industry
also consumes a significant amount of electricity in running automated feeding
systems and animal feed preparations. The poultry industry uses electricity
for heating brood houses. Interruption of electrical power to the dairy
industry would be serious--it would be disastrous to cold storage operations.
LP gas is used for most stationary and mobile engines and for winter heating of
poultry houses.
Aviation fuel is essential to planting and crop protection operations.
One thing that should be emphasized is that most agricultural producers depend
on more than one form of energy. A common combination of usage is diesel,
electricity, and gasoline. Thus it appears that if state and national priorities
will emphasize maximum food production, processing and distribution; the
respective energy needs must be met. This need not be in a blank check fashion,
but as fairly and equitably determined by a state level organization with local
input. Logically, this could be determined by the State Energy Planning Council
with Department of Food and Agriculture, University of California, State Board
of Agriculture, and farm organizations input or by the Department with input
from the University, State Board, and farm organizations.
Priorities can be established among the various industry segments if energy
supply becomes critical. Food production, processing, and distribution should
be first priority. Fiber and forestry production, processing, and distribution
could be of secondary priority with nursery and floriculture third.
Consumption efficiency can be improved by better planning, greater attention
to details such as minimum and alternate fertilizer uses, preventative equipment
maintenance, and increased use of integrated pest management, drip irrigation,
and minimum tillage.
Agricultural projected energy needs for 1974 are shown in Table II. Table III
shows a 1974 first quarter needs estimate.
Table II
ENERGY CONSUMPTION IN AGRICULTURE - CALIFORNIA
(1974)
(10⁶ Units)
LP Gas
Aviation
Natural Gas
Electricity
Diesel
Gasoline
Category
Factor
Therm
KWH
Gal
Gal
Propane
Fuel
Gal
Gal
Field Crops
1.036
398.904
335.044
78.333
18.237
1.003
------
Vegetables
1.043
188.432
423.695
44.855
12.724
5.123
-
Fruits/Nuts
1.014
155.195
155.194
31.078
12.744
2.276
-----
Livestock
x/
95.613
1,446.199
31.456
5.804
15.553
-
Irrigation
1.033
41,958
7,414.296
6.746
.503
4.670
-----
Fertilizers
1.033
298.108
560.232
7.166
3.722
1.151
---
Ag. Aircraft
1.033
----
--
1.107
1.660
-
9.291
Frost Protection
1.015
---
31.426
69.754
7.602
-----
-----
Greenhouses
1.169
120.056
97.526
---
----
-
Vehicles
1.033
I
---
10.792
121.685
-------------------------
----
Other
1.033
---
---
---
------
24.984
--------
TOTAL (1974)
1,298.265
10,728.026
281.287
184.681
54.760
9.291
TOTAL (1972)
1,241.730
10,400.006
273.028
178.679
52.629
8.994
X
/
TH
KWH
Diesel Gas (G)
Gasoline (G)
LP Gas (G)
1.048
1.033
1.0179
1.0231
1.0547
Table III
1)
FIRST QUARTER AGRICULTURE NEED ESTIMATES
(1974)
(10⁶ Units)
ENERGY FORM
Category
Natural Gas
Electricity
Diesel and
Gasoline
LP Gas, Propane
Aviation Gas
Therm
KWH
Fuel Oil
Gal
and Butane
Gal
Gal
Gal
Jan
Feb
Mar
Jan
Feb
Mar
Jan
Feb
Mar
Jan
Feb
Mar
Jan
Feb
Mar
Jan
Feb
Mar
Field Crops
2.0
2.0
48.0
1.5
1.5
40.0
2.0
4.0
12.0
1.0
1.0
3.0
0.1
0.1
0.1
Vegetables
6.0
6.0
7.0
30.0
30.0
40.0
3.0
3.0
5.0
0.7
0.8
1.5
0.6
0.5
0.2
---
Fruits/Nuts
6.0
3.0
3.0
6.0
3.0
3.0
2.5
2.5
3.0
1.5
0.8
0.7
0.3
0.1
0.1
Livestock
15.0
15.0
10.0
150.0
150.0
100.0
3.0
2.5
2.5
0.4
0.3
0.3
4.0
4.0
2.0
---
Irrigation
---
---
100.0
150.0
250.0
---
---
0.1
0.1
0.3
Fertilizers
30.0
35.0
35.0
55.0
65.0
65.0
0.5
0.5
1.0
0.2
0.3
0.5
0.1
0.1
0.1
----
Ag. Aircraft
0.1
0.1
0.1
0.1
0.1
0.1
---
--
0.5
0.5
1.0
Frost Protection
---
10.0
10.0
8.0
20.0
20.0
20.0
2.0
2.0
2.0
Greenhouses
30.0
30.0
20.0
10.0
10.0
5.0
0.4
0.4
0.3
---
Vehicles
0.5
0.7
0.8
7.0
10.0
13.0
Other
2.0
2.0
2.0
Monthly Totals
89.0
91.0
123.0
362.5
419.5
511.0
32.0
33.7
44.7
12.9
15.3
21.1
7.2
6.9
4.8
0.1
0.4
1.5
Quarter Totals
303.0
1293.0
110.4
49.3
18.9
2.0
1) Through first level processing.
Appendix C
CALIFORNIA FOSSIL AND GEOTHERMAL ENERGY SUPPLIES
January 7, 1974
CALIFORNIA CRUDE OIL PRODUCTION
State crude oil production 1) in the first nine months of 1973 declined
about 2.3 percent from a high of 930,209 barrels a day in February
to a low of 908,614 barrels a day in September. This decline was due
to a natural decline in rate, economic factors, moratorium on
offshore development, and environmental controls, Projecting this
rate of decline into the first quarter of 1974, an average production
rate of 895,000 barrels of oil would be anticipated. However, a
price rise in oil, production from the newly discovered Tule Elk
field, and remedial work scheduled on offshore wells will increase
daily production to 910,000, 915,000, and 920,000 barrels of oil for
January, February, and March, respectively, in 1974.
Tule Elk field will have 12 more wells completed during the first
quarter of 1974. Increased production for this period will average
18,000 barrels per day of oil and 9,000 Mcf. of gas. The latter
figure is assuming 500 CU. ft. of gas produced per barrel of oil.
Remedial work scheduled on offshore wells in State waters could
increase production by as much as 2,700 barrels per day. Although
the moratorium on offshore development was recently lifted, any new
well completions would have a negligible impact on the 1974 first
quarter forecast. John F. Matthews, Jr., State Oil and Gas Supervisor,
estimates that new development drilling from existing platforms will
increase production 10,000 barrels per day within six months.
1) State production figures include federal offshore production.
-2-
If Congress opens the 46,000 acre Elk Hills field, it would be a
partial remedy to the nationwide energy shortage. The Navy believes
the field is capable of a production level of 160,000 barrels a day
of oil within two months. Within 18 months, the Navy says, the field
could produce up to 230,000 barrels a day and attain a daily rate of
350,000 barrels in three years. Although pipeline capacity is
available, a daily production rate above 60,000 barrels would require
additional pipeline pumping facilities.
Tables I and II give a breakdown of California production by gravity
and sulfur content, respectively.
TABLE I
CALIFORNIA CRUDE PRODUCTION
COMPARISON OF JANUARY 1972 WITH JANUARY 1973
BY GRAVITY GROUPS
Change
January 1972
January 1973
+.or -
%
API GRAVITY
B/D
B/D
B/D
Change
11.9 and Under
42,458
45,777
+ 3,319
+ 7.8
12 - 19.9
451,108
449,499
- 1,609
- .4
Heavy:
493,566
495,276
+ 1,710
+
.3
20 - 24.9
139,928
144,369
+ 4,441
+ 3.2
25 - 31.9
237,166
216,929
- 20,237
- 8.5
32 and Over
76,646
67,559
- 9,087
- 11.8
Light:
453,740
428,857
- 24,883
- 5.5
Total:
947,306
924,133
- 23,173
-3-
TABLE II
DAILY STATE PRODUCTION
AS TO
SULFUR CONTENT
Field
% Sulfur Content
Daily Production
Accumulative Total
.5 and Under
Paloma
.2
400
Elwood
.5
175
East Los Angeles
.5
240
Subtotal
815
1.0 - .6
Antelope Hills
.56
639
Belridge North
.6
948
Buena Vista
1.0
13,001
Coalinga Nose
.6
10,977
Coles Levee, North
.8
2,416
Coles Levee, South
.7
1,671
Edison
.8
3,673
Elk Hills
.9
2,127
Fruitvale
.9
2,875
Greeley
.8
2,126
Kern Front
.9
8,626
Kettleman, North Dome
.75
2,313
Cymric
1.0
9,433
Temblor Ranch
1.0
25
Midway-Sunset
1.0
9,474
Mount Poso
.8
5,014
Mountain View
.9
1,956
Poso Creek
.8
4,580
Rio Bravo
.6
1,058
Round Mountain
.8
1,949
Strand, East
.8
134
Ten Section
.7
2,080
Wheeler Ridge
.8
3,949
Devils Den
.7
140
Capitan
.8
114
Oak Canyon
1.0
531
Santa Clara Valley Group
.7
Fillmore
256
West Montalvo
2,194
Oakridge
891
Piru
7
Saticoy
771
Aliso Canyon
1.0
2,307
Newhall-Potrero
.9
1,606
Simi
.7
119
Montebello
.8
1,874
Santa Fe Springs
.9
2,417
Subtotal 104,271
105,086
TABLE II Con't.
-4-
Field
% Sulfur Content
Daily Production
Accumulative Total
1.5 - 1.1
Canfield Ranch
1.1
1,834
San Miguelito
1.5
3,157
Del Valle
1.5
356
Shiells Canyon
1.5
1,278
Brea-Olinda
1.05
10,863
Dominquez
1.15
4,083
Long Beach
1.45
7,620
Seal Beach
1.5
3,939
Whittier
1.2
2,491
Subtotal
:
35,621
140,707
2.0 - 1.6
Belridge, South
1.6
23,792
Rincon
1.7
12,776
Ventura Avenue
1.6
27,659
Bardsdale
2.0
381
Coyote, East
1.8
2,064
Coyote, West
1.6
6,164
Huntington Beach
1.6
59,289
Inglewood
1.9
10,716
Richfield
1.8
4,645
Wilmington
2.0
192,147
Subtotal
339,633
480,340
2.5 - 2.1
Torrance
2.5
5,644
Subtotal
5,644
485,984
Over 3.0
Kern River
10.5
74,396
Casmalia
3.5
1,939
Cat Canyon
6.0
19,656
Lompoc
4.1
1,301
Orcutt
3.0
5,644
Santa Maria Valley
5.2
4,641
Oxnard
7.5
1,149
South Mountain
3.1
5,182
El Segundo
3.5
105
Playa del Rey
3.5
400
Subtotal
114,413
600,397 *
*
This figure represents about two-thirds of California's daily production.
-5-
CALIFORNIA CRUDE OIL IMPORTS
Foreign crude oil imports to California during October and November 1973
were about 536,000 barrels per day. The December daily average of
375,000 barrels reflects the Arab nations oil embargo and an increase
of imports from other foreign sources and Alaska. Table III tabulates
imports to California by tankers for the months September through
December 1973.
If the Arab nations oil embargo continues through the first quarter
of 1974, California crude oil imports from foreign sources and Alaska
are anticipated to be 375,000 barrels per day. An immediate lifting of
the embargo would not have an impact on increasing crude oil supply
before March.
Domestic imports of crude oil from out-of-state sources are expected to
be about 95,000 barrels per day.
-6-
TABLE III
PETROLEUM CRUDE OIL AND PRODUCTS IMPORTED TO CALIFORNIA
BY TANKERS
Month/Year
Bunker
Crude
Crude
Diesel
Finished
Fuel
Gasoline
Jet
Unfinished
Total
Fuel
Oil
Residual
Fuel
Product
Oil
Fuel
Product
Barrels/Day
Imports
Sept./1973
117,796
11,975,100
171,200
583,275
122,275
432,000
Oct./1973
16,362,253
45,787
182,252
1,973,958
37,325
118,315
278,057
612,500
Nov./1973
100,556
16,392,461
209,081
9,995
1,822,425
194,478
92,668
60,604
629,000
Dec. /1973
10,143,515
10,000
1,123,594
42,110
119,500
420,000*
* From December 1 through 20 the total imports averaged 375,000 barrels per day.
Note: Above figures are in barrels corrected to 60 degrees F.
-7-
CALIFORNIA NATURAL GAS SOURCES
California natural gas production, like oil, continued to decline
during the first eight months of 1973. Combined oil field and dry gas
field production averaged 1,379,000 Mcf/D. Anticipated supply from
California fields for the first quarter of 1974 is 1,175,000 Mcf/D or
207,000 equivalent barrels a day of crude oil.
California rate of consumption in 1973 was about 5.8 million Mcf. per
day or 1.12 million equivalent barrels of oil. In 1973, California
obtained about 58 percent of its gas requirements from the southwestern
states and 18 percent from Canada. Forecasted delivery rates from
out-of-state sources for the first quarter of 1974 are 4.35 million
Mcf. per day or .750 million equivalent barrels of oil. This reduction
in delivery of natural gas will require greater use of fuel oil by
public utilities.
CALIFORNIA GEOTHERMAL ENERGY
The power generation at the Geysers in 1973 was slightly above
9.6 million kwh per day, or about 15 thousand equivalent barrels of oil.
No increase is scheduled until October 1974.
CALIFORNIA IMPORTED COAL
Coking coal is imported to California from the Rocky Mountain states. The
amount equals about 17 thousand barrels per day of equivalent oil.
APPENDIX D.
HYDRO, NUCLEAR AND GEOTHERMAL
ELECTRICAL GENERATION
About 25% of California's first quarter energy will be consumed as
electricity. More than half will be generated by domestic oil-fired
plants, and the rest will be split between imported electricity and
domestic hydro and geothermal generation. Importation is mainly hydro
from the Pacific Northwest, but includes coal-generated electricity
from Four Corners in New Mexico and Mohave in Nevada, partly owned by
California utilities, hydro from dams on the Lower Colorado River,
also shared by California utilities, and the fuel for nuclear power
generated in-state. A small amount of electricity is also generated
at domestic geothermal fields. Nuclear and geothermal together
constitute 1% of California's energy supply.
Hydro, both domestic and imported, depends on adequate reservoir levels
in California, the Pacific Northwest and the Colorado River Basin.
Recent weather patterns have favorably modified an originally bleak
outlook, especially in the Pacific Northwest. At present, though
specific figures are not available, intertie lines are loaded to
capacity, taking some pressure off fuel requirements for oil and gas
fired generation in California. Latest indications are that demand
for oil fired generation will be reduced from 465 to 352 thousand
barrels/day in January, the slack being taken up by a combination of
effective conservation of about 10% of demand along with increased
domestic and out-of-state hydro generation. At best, though, only
25% of California's electric generating resources are hydro, and no
major new hydro plants are under construction at this time.
The picture is slightly different for nuclear and geothermal generation.
While both are presently minor sources of electricity, and are unable
to significantly alter the energy picture in the short run, new units
of both types are under construction, and will be available in late
1974. Nuclear-fired generation, listed in the attached tables, comes
from one nuclear unit in the P.G.& E. plant at Humboldt Bay, recently
refueled, and the unit at San Onofre, presently down for repairs but
expected to be back on line in late January. Construction of second
and third units at San Onofre has been stalled by refusal of the
California Coastal Zone Conservation Commission to issue a permit.
SMUD's Rancho Seco Plant, expected on line at 913 megawatts in October
1974, will triple the State's nuclear generating capacity and will save
about 30,000 barrels of oil per day.
CONTACT:
Earl C. Parker
Press Secretary
Sacramento, Calif.
(916) 445-0680
news
FROM THe OFFICE OF
LT. GOVERNOR
eD Reinecke
MS - 29
December 27, 1973
TO: NEWS MEDIA
SUBJECT: STATE OF CALIFORNIA ENERGY RELATED ACTIONS
In the past few weeks increasing numbers of media
representatives have requested background information regarding
the energy crisis.
This report, from Lieutenant Governor Ed Reinecke, details
the state actions in relation to the energy crisis, dating back to
1972 when the Office of Science and Technology began working on the
impending energy situation.
The final section of the report, actions of the Energy
Planning Council, will be updated monthly to assist media in keeping
track of the Council's activities.
#
#
#
#
PROGRESS REPORT ON ACTIONS
TAKEN BY THE STATE OF CALIFORNIA IN RELATION
TO THE ENERGY CRISIS
PREPARED BY:
Lt. Governor Ed Reinecke
Chairman
Energy Planning Council
December 20, 1973
CONTENTS
Page
1
Introduction by Lt. Governor Ed Reinecke
3
State Organizational Highlights
4
I.
Highlights of Federal Government Activities
6
II.
Highlights of State Government Activities
10
III. Highlights of Local Government, Private Industry
and Technical Community Activities
11
Recommendations Resulting From The Energy Workshop
13
Actions Taken To Date (Dec. 20, 1973) By The Energy
Planning Council
INTRODUCTION
BY
LT. GOVERNOR ED REINECKE
CHAIRMAN
ENERGY PLANNING COUNCIL
This report details the actions taken by the State of
California in relation to the energy crisis.
The activities of the State of California have been
directed to three areas:
1. Federal government. Communications, state
recommendations and implementation of federal actions.
2. State government. Actions to alleviate energy
waste in state government, and liaison between the
legislative branch and various state agencies with
energy-related activities, such as the Public Utilities
Commission.
3. Local government, private industry and the technical
community. Recommendations to various segments of
the state, meetings with industry regarding economic
impact, and activities with researchers and developers
in relation to the future need forenergy supplies.
- 1 -
It is important that state government continue its work
to alleviate the immediate short term economic impact, and also
that it create long range action programs that will boost the
state's economy in the next decade and create an environment
which will supply the state's energy needs.
One major thrust of the Energy Planning Council has been
to continually call for voluntary effort on the part of every
Californian. Electrical usage has already been reported
reduced in home and business use, and so has heating. There
are also reports from the highway patrol that the public is, indeed,
driving not only slower, but reducing unnecessary driving. Car pcols
and public transit are also being utilized by more individuals as a
means to conserve precious fuel.
Every voluntary effort, which government must encourage,
makes it less likely that government will have to mandate actions that
will create hardships on sugments of the community, or
on individuals.
With the Energy Planning Council as the focal point for
energy related matters, and with a legislative activity that
speaks to the people in the same voice, the State of California
government can work united toward a goal that will serve the
needs of the people.
LT. GOVERNOR ED REINECKE
- 2 -
ORGANIZATIONAL HIGHLIGHTS OF STATE
GOVERNMENT TO HANDLE THE
ENERGY CRISIS
June, 1973
-- The Office of Science of Technology determined
that the major problem in California for
scientific and technological effort was energy,
and the Cabinet directed the Resources Agency to
complete an energy study.
September, 1972 -- "California's Electricity Quandary," Rand Corporation
study completed for the Resources Agency.
January, 1973 -- "Energy in California, It's Supply, Demand,
Problems" report was released.
May, 1973
- An Energy Workshop was held in Sacramento. In
attendance were state officials, conservationists,
researchers, private industry representatives
and local government officials.
June, 1973
-- "The Energy Dilemma," a report from the Resources
Agency.
October, 1973 - The Energy Planning Council was established by
executive order by Governor Reagan. This
council was recommended at the Energy Workshop
held in May, 1973.
- 3 -
I. HIGHLIGHTS OF FEDERAL GOVERNMENT ENERGY RELATED ACTIVITIES
Many of the energy crisis activities are in federal
jurisdiction.
The State of California has, through its office of Science
and Technology, and the Lt. Governor, Governor Reagan's science
advisor,
established liaison with
various federal agencies. This activity began in 1972 with
meetings and continual communications with various federal
agencies, including the federal Office of Science and Technology
and the National Science Foundation.
Currently, many state government agencies are working
closely with federal agencies, and the Energy Planning Council
has maintained close communication with the federal government.
Among the various Energy Planning Council activities in
association with the federal government are:
-- Energy Planning Council (EPC) executive secretary has
met with fuel allocation officials in Washington, and
he and his staff work closely with federal regional officers.
-- Congress was urged to provide for an immediate increase
in oil production from Elk Hills for at least military
needs, and for the drilling of additional wells to
help alleviate the fuel supply deficit.
- 4 -
-- Requested that the federal environmental impact
statements for off-shore oil and gas be prepared on
a field basis, rather than on individual wells, as a
means to reduce time consuming report activities.
- Requested the federal government to accelerate off-shore
drilling and production in federal waters off the
California coastline.
- Urged the federal government to finance research and
development projects for geothermal, solar and nuclear
energy.
In addition, the State of California conducted a survey
of the 50 states in 1972 on energy related matters. This study
was conducted through Lt. Gov. Ed Reinecke's office, and he,
as chairman of the National Conference of Lieutenant Governors,
has submitted the report to the states, the National Conference
of Governors and various federal agencies.
- 5 -
II. HIGHLIGHTS OF STATE GOVERNMENT ENERGY RELATED ACTIVITIES
Following are actions taken that relate to state government
energy conservation:
-- By executive order, a 50 mile per hour speed limit was
established for state vehicles, which will remain in
effect until the statewide 55 mile per hour speed limit
is effective (Jan. 1, 1973).
-- By executive order, all state vehicles, except emergency
vehicles, will reduce their gasoline consumption by 10
per cent, compared to last year's usage, in addition to the
savings realized by reduced speeds.
NOTE: THIS WILL RESULT IN A TOTAL 20 PER CENT GASOLINE REDUCTION
FOR STATE VEHICLES.
-- Building managers were directed to achieve optimum
efficiency of gas, electricity and other energy sources
to meet the heating and cooling needs of the facility.
Most facilities have thermostats set at 68 degrees for
the winter. In Sacramento, state buildings during
October have achieved significant savings in natural
gas and electricity. Preliminary reports show a 45 per
cent savings in nautral gas, and a 22-32 per cent savings
in electricity.
- 6 -
-- Reduced the review and comment time from 45 days to 30
days for state environmental impact statements and
environmental impact report review and comment time
for energy related projects. This will assist in
getting approval for necessary projects on as short
a time basis as possible, and still protect the
environmental needs.
- Designated a State Fuel Allocation Officer and
established an office which has been operational since
November 1, 1973.
-- Established a Fuel Allocation Appeals Board.
-- Requested Local Air Pollution Control Districts to
give full consideration to fuel shortages when considering
sulfur variance applications.
-- Requested the Air Resources Board to consider deferring
implementation of statewide NOₓ retrofit program on
1966-1970 vehicles. On December 19, 1973, after a
two-day hearing, the Air Resources Board voted
unanimously to postpone for one year the retrofit
program.
- Directed a decrease in the state vehicle fleet, and the
purchase of fuel-economy cars for state use.
- 7 -
-- Directed the establishment of energy performance
specifications as a condition for the granting of
building permits; such as minimum insulation in the
walls and around the doors and windows.
- Directed General Services to consider energy efficiency
of buildings leased.
- Supported utility-sponsored energy conservation programs
with the California Public Utilities Commission monitoring
them. The Commission in turn has ordered a voluntary
energy reduction of 10 per cent in California's
Public Utility usage.
-- Urged the PUC to study changing rate schedules for
both electricity and gas pricing to help reduce demand
and to monitor peak seasonal pricing.
-- The Energy Planning Council recommended, and Gov. Reagan
directed the Department of Transportation to handle
state car pooling programs to reduce state employee
vehicle travel to and from work.
- The EPC recommended the lifting of the moratorium on
off-shore oil drilling. The State Lands Commission,
after several hearings, voted on Dec. 12 to lift the
moratorium.
-- Encouraged state agencies and departments to use conference
telephone calls and visual aids such as audio and video
tapes as a means to further reduce employee and vehicle
travel.
- 8 -
- The Office of Science and Technology was directed by
EPC to develop a priority list of research and development
projects to help alleviate the energy crunch.
- Directed EPC staff to update the state's energy inventory,
and to quantify the energy available and the supplies
needed for the first quarter of 1974. EPC will also
identify flexibilities within the fuel allocation
program to alleviate "pocket problem areas."
-- Directed the Department of Commerce to complete a study
on the economic impact of the energy crisis on an individual
industry level, and to include information regarding
employment rates, so that the state will have an early
warning system for unemployment problems in the energy
intensive industries.
- Recommended professional staff comprised of competent
individuals in appropriate energy fields to support
the Energy Planning Council.
- 9 -
III. HIGHLIGHTS OF LOCAL GOVERNMENT, PRIVATE INDUSTRY AND
TECHNICAL COMMUNITY ENERGY RELATED ACTIVITIES
-- Letters sent to all city and county governments,
requesting that they implement energy conservation measures
including those put in effect at the state level, such
as: vehicle speed reduction, reduced lighting and
heating.
- Questionnaires were sent to all city and county governments
to determine what they were doing to conserve energy,
with the goal being to share
workable projects
with other governmental agencies.
-- A research study group was created with representatives
from Livermore Research Laboratory of the University
of California and Jet Propulsion Laboratories to
work with the Office of Science and Technology in the
priority listing of research and development energy
projects to which California should address itself.
-- Encouraged manufacturers of electric generating equipment
to improve generation efficiency with support from the
newly formed electric Power Research Institute.
- Communications with the public to voluntarily reduce
lighting, heating and driving as a means to conserve
energy and eliminate waste.
-- Meetings with various industry representatives, such
as tourism, manufacturing, chamber of commerce, oil
industry and agriculture, to assess the needs and concerns.
- 10 -
RECOMMENDATIONS
RESULTING FROM THE ENERGY WORKSHOP
HELD MAY, 1973
CHAIRED BY LT. GOVERNOR ED REINECKE
NOTE: These recommendations formed the basis for actions which
have been taken, or are being considered, by the Energy
Planning Council.
Prohibit air conditioning on new cars.
Use advanced communcation techniques to reduce need for travel.
Revise State policy to set new standards for energy efficiency
for leased buildings.
Reduce packaging to conserve energy.
Set energy performance specifications as a condition to granting
building permits.
Initiate public educational program to encourage lower thermostat
settings in the winter and higher settings in the summer.
Prohibit the use of electricity for resistive space and hot
water heating in new installations.
Establish minimum performance standards for new air conditioning
units.
50 MPH maximum speed on highways.
Encourage car pooling.
Expand bus system.
Establish bicycle lanes and paths.
Use gasoline tax funds for rapid transit.
Institute measures to ration individual travel.
Develop offshore petroleum reserves.
Construct deepwater ports.
Develop onshore primary, secondary and tertiary oil recovery
techniques.
Develop geothermal resources.
Press for California Air Resources Board automotive emission
standards rather than federal standard.
Encourage industry to conserve energy.
Include consideration of social and environmental costs in
price of energy in selection of energy source.
Develop recycling incentives and solid waste conversion.
Study use of solid waste as a boiler fuel.
Institute utility - sponsored conservation programs.
Study restructuring of rate schedules for electricity and
gas pricing as a incentive to energy conservation.
Study methods to improve transmission efficiency.
Study methods to improve generation efficiency.
Consider prohibiting the use of natural gas for generating
electricity.
Expand the category of interruptable customers for gas and
for electricity.
Develop nuclear power plants.
Create an Energy Policy Council for the state.
Establish regulations for the siting of energy facilities.
- 12 -
ACTIONS TAKEN TO DATE (DEC. 20, 1973) BY THE
ENERGY PLANNING COUNCIL
The Energy Planning Council recommended by the Energy
Workshop was established by Governor Ronald Reagan by Executive
Order, on October 2, 1973. Lt. Governor Ed Reinecke was named
chairman. The following actions have been implemented as a
result of recommendations and follow-up by the Council:
Established an Energy Planning Coordinator as Executive Secretary
to the Council.
Designated a State Fuel Allocation Officer and established
and staffed State Office; operational since November 1.
Established a Fuel Allocation Appeals Board.
Request State reserve for propane.
Request production from Elk Hills and N.P.R. #4, North Slope,
Alaska, be expanded to satisfy military requirements.
Certification of public mass transit facilities to quality for
fuel preferences.
Issued Executive Orders: Eliminate 70 mph speed limit; establish
interim 50 mph speed limit for State-owned vehicles; decrease
State vehicle use to produce at least 10% fuel savings in
addition to savings realized by reduced speed.
Use advanced communications to reduce travel - such as conference
telephone connections and audio video tapes.
Requested Federal Environmental Impact Statements for off-shore
oil and gas be prepared on field basis, rather than on individual
wells.
Reduced State Environmental Impact Statement and Environmental
Impact Report review and comment time on energy related projects
to 30 days.
- 13 -
Requested local APCDs (Air Pollution Control Districts)
give full consideration to fuel shortage when considering
sulfur variance applications.
Urged the Environmental Protection Agency to shorten hearing
notification on Statewide NOₓ retrofit program on 1966-70
vehicles.
Directed an investigation of the possible use of refinery
flare gas for productive purposes.
Urged the President and Congress to enact federal daylight
savings time.
Established a series of conservation measures in State
controlled facilities (heating, lighting). Building managers
have been directed to adopt appropriate energy conservation
measures.
Requested local governments to develop and implement energy
conservation plans.
Directed a decrease in the State vehicle fleet, and purchase
of fuel-economy cars for state use.
Directed the establishment of energy performance specifications
as a condition for the granting of building permits.
Directed establishment of minimum performance standards for
new air conditioning units.
Encouraged.selective expansion of bus systems.
Initiated action to obtain federal approval for deepwater
ports for California.
Supported utility-sponsored conservation programs, with the
California Public Utilities Commission monitoring these programs.
Urged PUC to study changing rate schedules for both electricity
and gas pricing to help reduce demand and to monitor peak
seasonal pricing.
Urged PUC to encourage utilities to improve transmission efficiency.
Encouragedmanufacturers of electric generating equipment
to improve generation efficiency with support from the newly formed
electric Power Research Institute.
- 14 -
Urged PUC to expand the category of interruptable customers
for electricity.
Directed a revision of state policy to set new standards for
leasing buildings.
Seek Legislation to ban the use of hot water wall heating units
powered by electricity.
Directed the Department of Transportation to continue with
their bicycle lanes and path program.
Supported the development of California offshore petroleum
reserves under strict conditions.
Recommended implementation of a car pooling program for state
employees.
Directed the Office of Science and Technology to develop a
priority listing of research and development projects to help
alleviate the energy crunch.
Recommended immediate establishment of a professional staff
comprised of competent individuals in appropriate energy
fields to support the Energy Planning Council.
Recommended that the 50 mile per hour speed limit for state
vehicles be rescinded by the Governor, to be effective when
the Statewide 55 mph speed limit takes effect.
Directed the Energy Planning Coordinator and his staff to
proceed with a three month energy supply and demand inventory
of the State - resulting in an inventory "model" to keep
the state's energy supply and demand needs on an immediate
retrieval basis.
Meetings with various industry representatives, such as
tourism, manufacturing, chamber of commerce, oil industry and
agriculture.
- 15 -
CONTACT:
Earl C. Parker
Press Secretary
Sacramento, Calif.
(916) 445-0680
news
FROM THE OFFICE OF
LT. GOVERNOR
eD Reinecke
11-13-73
ENERGY ACTIONS TO BE TAKEN BY
LT. GOVERNOR ED REINECKE
1. TO URGE DR. HENRY KISSINGER - NOW
THAT HE HAS ACCOMPLISHED A MUTUALLY
SATISFACTORY CEASE-FIRE - TO BEGIN
NEGOTIATIONS ON RESUMING THE SHIPMENT
OF OIL FROM THE ARAB-BLOC NATIONS.
2. ASK THE PRESIDENT TO REVIEW THE OIL
EXPORT POLICIES DURING THIS CRISIS PERIOD
3. URGE THAT THE ARB STANDARDS FOR AIR
POLLUTION EQUIPMENT OF THE 1966-1970
MODELS CAR BE POSTPONED.
4. URGE THAT THE EPA REGULATIONS FOR NO
LEAD GAS EFFECTIVE NEXT JULY BE POSTPONED
UNTIL FURTHER NOTICE.
5. TURN OFF THE CAPITOL DOME LIGHTS.
CONTACT:
Earl C. Parker
Press Secretary
Sacramento, Calif.
(916) 445-0680
news
FROM THE OFFICE OF
LT. GOVERNOR
eD Reinecke
11-13-73
SIAIEMENT_TO_THE_MEDIA_
ENERGY PLANNING COUNCIL RECOMMENDATIONS
TO EASE THE FUEL CRISIS.
1. URGE LEGISLATURE TO REDUCE STATE
LEGAL SPEED LIMIT TO 50 MPH SPEED
WHEN IT RECONVENES.
2. URGE THE PUBLIC TO ELIMINATE ALL
UNNECESSARY DRIVING TO CONSERVE FUEL.
3. FURTHER REDUCE THERMOSTAT SETTINGS IN
STATE BUILDINGS FROM 72 DEGREES TO 68
DEGREES FOR HEATING, AND INCREASE
THERMOSTAT SETTINGS TO 78 DEGREES FOR
COOLING. THE STATE WILL URGE LOCAL
GOVERNMENTAL AGENCIES TO TAKE SIMILAR
ACTION, AND IT WILL ASK PRIVATE INDUSTRY
AND THE PUBLIC TO KEEP THEIR THERMOSTATS
AT THE SAME LEVELS ON A VOLUNTARY BASIS.
4. URGE THE CONGRESS TO PROVIDE FOR AN
IMMEDIATE INCREASE OF PRODUCTION FROM
ELK HILLS FOR THE CONSUMER MARKET AND
FOR THE DRILLING OF ADDITIONAL WELLS TO
HELP ALLEVIATE THE FUEL SUPPLY DEFICIT.
- 2 -
5. URGE THE STATE LANDS COMMISSION TO
PERMIT THE RESUMPTION OF OFFSHORE OIL
DRILLING ON STATE OWNED LANDS, AND
RECOMMEND TO THE FEDERAL GOVERNMENT
THAT IT PERMIT INCREASED OFFSHORE OIL
DRILLING BEYOND THE 3 MILE LIMIT.
6. RELAX SULFUR STANDARDS FOR AREAS
OUTSIDE THE CRITICAL AIR POLLUTION
BASINS AND WITHIN THESE CRITICAL BASINS
RELAX THE STANDARDS ON A CASE-BY-CASE
BASIS FOR THE WIDE UTILIZATION OF ALL
FUELS.
7. URGE THE FEDERAL AND STATE GOVERNMENTS
TO REDUCE STRINGENT REQUIREMENTS ON
VEHICLE AIR POLLUTION DEVICES AS A MEANS
TO SAVE FUEL ON A SHORT TERM BASIS.
8. URGE LOCAL GOVERNMENT, PRIVATE INDUSTRY
AND THE PUBLIC TO REDUCE LIGHTING IN
NON-WORK AREAS. TURN OFF LIGHTING AFTER
WORKING HOURS EXCEPT WHERE NECESSARY
FOR SECURITY, AND CUT OUT ARCHITECTURAL
AND LANDSCAPE LIGHTING, CONFORMING TO
ACTIONS ALREADY IMPLEMENTED FOR STATE
BUILDINGS.
- 3 -
9. ENCOURAGE PRIVATE INDUSTRY TO CONDUCT
ENERGY EFFICIENCY STUDIES OF FACTORIES
AND BUILDINGS AS A WAY TO FIND MEANS
TO REDUCE WASTE IN HEATING AND COOLING
SYSTEMS.
10. ENCOURAGE LOCAL CHAMBERS OF COMMERCE
AND OTHER BUSINESS-RELATED ORGANIZATIONS
TO WORK WITH COMMERCIAL BUSINESSES TO
SEE IF BUSINESS HOURS CAN BE REDUCED.
11. SUPPORT THE FEDERAL GOVERNMENT'S
RECOMMENDATION FOR THE ESTABLISHMENT OF
YEAR-ROUND DAYLIGHT SAVINGS TIME, AND
URGE THE STATE LEGISLATURE TO TAKE THE
STEPS NECESSARY TO IMPLEMENT YEAR-ROUND
DAYLIGHT SAVINGS TIME IN CALIFORNIA.
#
#
ENERGY CRISIS
CONTACT:
Earl c. Parker
Press Secretary
(916) 445-0680
news
FROM THE OFFICE OF
LT. GOVERNOR
Sacramento, Calif,
eD Reineche
October 11, 1973
MS - 5
MEMO TO THE PRESS
Attached is a copy of the Energy Policy for the State
of California which was approved by Governor Ronald Reagan.
The Energy Planning Council, chaired by Lt. Governor
Ed Reinecke, will coordinate and monitor the implementation
of this policy, recommending policy changes and additional
actions.
The first meeting of the Energy Planning Council will
be held within two weeks.
...
October 1, 1973
STATE OF CALIFORNIA ENERGY POLICY
It is essential that energy be available to the people
of the State California to protect the health and safety,
promote the general welfare, and further the State's economy.
Unnecessary, uneconomical and inefficient uses of power
have resulted in an increased demand for energy. The continuat-
ion of this trend will result in the depletion of energy resources.
The wise use of energy resources is vital to our current way of
life and to that of future generations.
It is the policy of the State of California to achieve
maximum efficient utilization and conservation of the limited
sources of energy available to the State and for State Government
to involve itself more directly in this field.
In furtherance of this policy, there is established by
Executive order an Energy Planning Council, advisory to the
Governor which will coordinate all state activities regarding
energy resources, monitor energy-related problems and their
solutions and recommend policy alternatives and actions for
implementation.
THE STATE IS TAKING THE FOLLOWING ACTIONS REGARDING THE ENERGY POLICY.
To conserve energy and reduce travel, the State will increase
its use of advanced communication techniques by expanding the
use of standard and conference telephone connections and audio-
video tapes.
The State will revise the State policy by establishing new
building lease standards to include minimum energy efficiency
standards which are to be met before a building is to be leased
by the State.
The State will support incentive measures to encourage industry
to conserve energy, to increase efficiency, to consider an energy
price increase as well as tax incentives, and to develop guide-
lines for more efficient packaging of its products.
The State will encourage private companies to initiate a public
educational program to encourage lower thermostat settings in
the winter and higher settings in the summer.
The State will support amendments changing the building codes
SO that the use of electricity for resistive space and hot
water heating on new installations is prohibited in those
locations where more efficient fuel consumption methods are
available.
The State will support the establishment of minimum performance
standards for new air conditioning units for residential, com-
mercial, and industrial installations.
The State will establish a voluntary incentive program of
car pooling, as outlined below:
1. Encourage car pool matching services by all major
public and private employees. The Department of
Transportation will act as coordinator between
employers, institute a public information campaign,
and contact key employers.
2. Encourage urban fringe parking facilities located at
key rendezvous points near existing freeway inter-
changes which could be utilized by both car pools and
public transit.
-2-
3.
Encourage preferential parking for car pools.
Car pool vehicles should be given preferential
treatment in terms of parking space allocation,
proximity and fees.
4.
Meter ramps and establish preferential freeway lanes
in urban areas.
The State will support studies for improvement of bus transit
and promote those proposals which show a favorable benefit-cost
potential, considering both economic and social terms.
The State will continue the Department of Transportation
policies for providing bicycle paths.
The State will develop further information concerning a tax
program based upon the energy efficiency of the automobile.
The efficiency standards would be based upon, among other
things, the weight of an automobile.
The State will continue to institute gas and electric utility-
sponsored conservation programs through Public Utilities
Commission formal proceedings involving electric and gas utilities
rates and services.
The State, through the Public Utilities Commission, will continue
to study restructuring rate schedules for electricity and gas
pricing in connection with formal proceedings involving electric
and gas rates.
The State, through the Public Utilities Commission will super-
vise utility-sponsored programs to improve transmission and
generation efficiency.
The State will continue to deal with expanding the category
of interruptible customers for electricity through formal
Public Utilities Commission proceedings involving electric rates.
The State will support legislation calling for the reduction
of the speed limit to 65 miles per hour.
The State supports the right of the people to choose whether
gasoline tax funds should be used for rapid transit.
The State will prepare a priority list for research and
development of energy resources.
The State will support action to develop offshore petroleum
reserves.
The State will support the construction of a deep water port
on the West Coast, and will coordinate such activity with the
U. S. Army Corps of Engineers.
-3-
The State will advocate development of onshore primary, secondary
and tertiary oil recovery techniques to include consideration
for incentives such as investment credit to secondary
and tertiary oil production facilities, maintaining
present depletion allowances and establishing realistic
environmental standards.
The State will support development of geothermal resources to
include encouraging the opening of federal lands for this type
development, together with necessary environmental impact
report, encouraging the federal government to conduct research
and development programs, streamlining permit granting procedures,
and consideration for faster depreciation of power plants.
The State will continue to support efforts to regulate pollutants
and require aesthetic and environmental mitigation to ensure
necessary costs are reflected in costs charged for energy pro-
duction and utilization.
-4-
State of California
Energy
Memorandum
To 1 Work Session Members
Date : August 15, 1973
Subject: Energy Policy Issues
From : Governor's Office
Attached is the final summary of actions taken on the remainder
of the recommendations of the Energy Workshop last Monday,
August 13.
Edwin Edno W. Thomas
Administrative Officer
to the Cabinet
CC: Vern Sturgeon
Public Utilities Commission
Issues
Action taken by Cabinet
PUC-1 Institute utility-sponsored conservation
1.
Public Utilities Commission is to further evaluate
programs.
the policy issue and report to the Cabinet what
other companies are doing in this field and what
actions can be taken by the State.
PUC-2 Item (1) institute utility-sponsored
1. Public Utilities Commission is to further evaluate
conservation programs.
the policy issue and report to the Cabinet what
other companies are doing in this field and what
actions can be taken by the State.
PUC-3 Study restructuring rate schedules for
1. Public Utilities Commission is to evaluate the
electricity pricing.
Con-Edison report on changing rate schedules for
pricing energy.
PUC-4 Item (2) study restructuring rate
1. Public Utilities Commission is to evaluate the
schedules for gas pricing.
Con-Edison report on changing rate schedules for
pricing energy.
PUC-5 Study peak seasonal pricing.
1. Cabinet concurred with Public Utilities Commission's
recommendation.
PUC-6 Item (3) study peak seasonal pricing.
1. Cabinet concurred with Public Utilities Commission's
recommendation.
PUC-7 Study methods to improve transmission
1. Cabinet concurred with Public Utilities Commission's
efficiency.
recommendation.
PUC-8 Study methods to improve generation
1. Cabinet concurred with Public Utilities Commission's
efficiency.
recommendation.
PUC-9 Study prohibiting the use of natural gas
1.
Cabinet concurred with Public Utilities Commission's
for generating electricity.
recommendation.
PUC-10 Expand the category of interruptible
1. Cabinet concurred with Public Utilities Commission's
customers for electricity.
recommendation.
PUC-11 Item (7) expand the category of inter-
1. Cabinet concurred with Public Utilities Commission's
ruptible customers for gas.
recommendation.
-2-
Issues
r-4 A very large geothermal potential exists in
1.
Add to the recommendation that an environmental
California, which can only be partially
impact statement is required for all geothermal
developed unless certain problems can be
development projects.
solved.
2. Resources Agency is to prepare a Cabinet issue
supporting the recommendations.
r-5 Press for California Air Resources Board
1. No action required.
automotive emission standards rather
than federal standards.
r-6 What can government do to encourage
industry to conserve energy?
1. Public Utilities Commission working with the
Resources Agency, is to re-evaluate the
recommendation.
r-7 Can all social and environmental costs be
1.
Public Utilities Commission working with the
included in the price of energy?
Resources Agency is to re-evaluate the recommendation
and return to Cabinet with a report on their findings.
r-8 Develop re-cycling incentives and solid
1. Resources Agency is to contact the Solid Waste
waste conversion.
Management Board and return to Cabinet in thirty
days with a summary on the Solid Waste Management
Board's work plan.
r-9 Study the use of solid waste as boiler
1. Resources Agency is to contact the Solid Waste
fuel.
Management Board and return to Cabinet in thirty
days with a summary on the Solid Waste Management
Board's work plan.
Sub-Cabinet
Issue
Action taken by Cabinet
SC-1
Study all energy-oriented Agencies in
1. No action required. Implemented with the adoption
the State with a view to consolidate
of LG 73-3.
and give a new and broader definition
to key regulatory and administrative
bodies concerned in energy.
Office of Science and Technology
Issues
Action taken by Cabinet
OST-1 Create a California Energy Office in the
1. No action required. Implemented with
Office of the Governor to recommend
the adoption of LG 73-3.
energy policies to the Governor and deal
with such problems that may emerge from
an energy shortage.
OST-2 The development of nuclear power plants.
1.
Cabinet concurred with the Office of
Science and Technology's recommendation.
OST-3 Utilize energy consultants' advice on
1. No action required. Implemented with the
potential savings.
adoption of LG 73-3.
OST-4 Request legislation creating an
1. Referred to Energy Policy Council for
Energy Policy Council and establishing
evaluation.
regulations for the siting of energy
facilities.
OST-5 The allocation of funds for research and
1.
Referred to Energy Policy Council for
development in the energy field.
evaluation.
(Combined #1, 4, 5, 9 and 10)
Office of Emergency Services
Issue
Action taken by Cabinet
OES-1 Develop a contingency plan for gasoline
1. Referred to Energy Policy Council. No further
rationing.
action required.
Crisis
ENERGY POLICY
A Report of the Energy Workshop to the Lieutenant Governor*
May 15-16, 1973
I. Introduction
The following is a summary report of the Energy Workshop
recommendations and proposals that was presented to
Lieutenant Governor Ed Reinecke. The workshop, which was
held on May 15 and 16, 1973, at the Sacramento Host Hotel,
was called by the Lieutenant Governor and sponsored by the
National Science Foundation in association with the
California Science and Technology Program.
As a result of two days of intensive discussions, the
participants, who represented energy supply and demand,
conservation and environmental groups, reached a general
consensus that California, along with the entire nation,
is facing an energy crisis and that in order to overcome
these energy problems, an all-out concerted effort by
all branches of government and all citizens will be
necessary.
Although the recommendations have been summarized separately,
with respect to supply, demand and policy actions, each
proposal is closely interrelated and center upon answering
the major issue at hand:
What energy and environmental policies are
necessary to balance the supply and demand
of energy, consistent with acceptable economic,
social and environmental goals to achieve the
most effective development, use and conserva-
tion of California's energy resources?
II. Supply
A. Research and Development Programs
Recognizing that the federal government and industry
are conducting increasing amounts of energy research
and development, a number of specific areas appear
*
The Chairman of the Workshop and the Committee Chairmen jointly
drafted this statement to reflect the general views of the
conference. No conferee expressly endorsed the entire report.
Some of the participants represented federal agencies for whom
they did not and could not speak. This report, therefore, does
not necessarily reflect the views of those participants.
-1-
to be of interest, both immediate and long-term,
to California. These should be supported --
either jointly, directly or through the exertion
of political stimuli to encourage their immediate
development. They include:
(1) The development of advanced systems to
increase the efficiency and safety of
electric power generation.
(2) The development of efficient fuel resources
not currently used; e.g., low BTU gas from
California crude (both in the ground and
above), coal and solid waste.
(3) The development of advanced power trans-
mission and storage systems.
(4) The use of nuclear heat for fuel produc-
tion such as coal gasification and hydrogen
production from water.
(5) The development of systems to reduce the
emission of oxides of nitrogen from fossil
fuel combustion.
(6) The development of advanced solar energy
systems both for electricity generation and
production.
(7) Development of solar/thermal conversion
systems for water heating, space heating
and air conditioning.
B. Offshore Oil Production
California has very large potential reserves of crude
oil in offshore State lands.
In the past, over 1,400 wells have been drilled with-
out incident in the offshore area under the regula-
tions of the California Public Resources Code and
under the supervision of the California State Division
of Oil and Gas as well as other concerned state and
local agencies.
The Santa Barbara incident was on federal lands and
occurred in a well drilled under less restrictive
federal regulations.
Procedures have been developed and equipment is
available to handle emergency situations in off-
shore waters.
-2-
Work should proceed to develop the State's reserves
in the offshore area to meet future energy needs.
The State should move aggressively to encourage the
development of these resources working within the
authority of the Regional Coastal Commission and
the State Lands Commission giving full concern for
the quality of the environment.
C. Deep Water Ports
All energy projections show the need for imported
crude to meet California's future energy deficit.
This crude must come by tanker. California must
take advantage of the most economical sources of
crude as well as transportation means.
Large tankers reduce costs of transportation
significantly.
In view of the lead time to construct port facili-
ties to receive large tankers, California should
begin immediately to facilitate the siting of
deep water ports and storage facilities.
D. Secondary and Tertiary Oil Recovery
California oil reserves can be increased within a
short time period by the application of secondary
and tertiary recovery techniques. These reserves
are one of the major available potential resources
for the State of California. Dependent on the
encouragement and on the success of the program,
this might yield as much as an additional 10
billion barrels.
Production of oil by secondary and tertiary recovery
methods is considerably more costly than production
by primary means. Accordingly, numerous potential
projects are not now being developed. As a matter
of fact, in urban areas where land values have
increased, potential secondary recovery wells now
are being abandoned. In effect, this potential
future secondary oil will be lost because the cost
to redevelop the property involved will be too
great to ultimately justify a secondary recovery
project.
E. Onshore Oil and Gas Development
The State of California is presently facing decreasing
domestic production of oil and gas and greatly
increasing demands for petroleum products. The
potential onshore reserves of the State are estimated
to be about 16 billion barrels. * Further development
* Oil is presumed to exist because of certain favorable geological
conditions. In order to "prove" the existence of oil in these
fields, further exploration and development will be necessary.
-3-
and exploration of this energy supply must be
encouraged.
F. Nuclear Power
Nuclear power is the basic source for the generation
of electricity for the future of the American States.
It can be expanded without apparent resource limit
for many decades. This can be done within the in-
ternal resources of the United States but will require
unusual capital investments which may limit its growth.
A requirement for its continued development is the
satisfactory resolution of current safety concerns.
G. Geothermal Power Development
Geothermal electric power production for California
by 1985 is estimated to range from 5,000 to 10,000
Mwe. This production is based on estimating the
producing potential of known geothermal resource
areas within the State. Additional geothermal
capacity calls for extensive exploration and will
be available for the periods of 1985 to 2000, It
is estimated to be as much as 20,000 Mwe. This
estimate is based upon the development of new and
improved exploration techniques, improved con-
version technology and the opening of federal lands
for geothermal development.
III. Demand
Present rate of growth for energy in California does not
appear capable of being sustained. In order to reduce
growth rate to the minimum required for full employment,
various methods of demand reduction are recommended. These
recommendations are:
A. Transportation
(1) Reduce speed limit on highway to 50 miles per hour.
(2) Encourage car pooling.
(3) Expand the bus systems.
(4) Establish protective bicycle lanes and paths.
(5) Institute gasoline rationing.
(6) Develop taxes and other incentives designed to reduce
the weight of the automobile.
(7) Prohibit automotive air conditioning units on new
cars.
-4-
(8) Press for California Air Resources Board automotive
emission standards rather than federal standards.
(9) Use gas tax funds for rapid transit.
(10) Study the establishment of a ceiling on per capita
transportation, (e.g., limiting the number of air
travel miles per person).
(11) Utilize advanced communication techniques to reduce
travel, where feasible.
B. Industry
(1) Develop recycling incentives.
(2) Urge industry to conserve energy.
(3) Utilize energy consultants' advice on potential
savings.
(4) Study energy conservation technological improvements.
(5) Reduce packaging to conserve energy.
(6) Reduce energy consumption per unit of industrial
output.
C. Residential and Commercial Buildings
(1) Initiate a massive public educational program to
encourage lower thermostat settings in the winter
and higher thermostat settings in the summer.
(2) Prohibit the use of electricity for resistive space
and hot water heating on new installations.
(3) Revision of the State policy for leasing buildings
to include the establishment of minimum energy
efficiency standards that must be met before a
building can be leased by the State.
(4) Establish minimum performance standards for new
air conditioning units.
(5) Prohibit pilot lights on new gas appliances and
substitute electrical starting devices.
(6) Study technological improvements such as use of solar,
reflective glazing, increased insulation and heat
recovery systems.
D. Utilities
(1) Institute utility-sponsored conservation programs.
-5-
(2) Study restructuring rate schedules for both electricity
and gas pricing.
(3) Study the use of solid wastes as boiler fuel.
(4) Study peak seasonal pricing.
(5) Study methods to improve transmission efficiency.
(6) Study methods to improve generation efficiency.
(7) Include all social and environmental costs in the
price of energy.
IV. Policy Implementation
Study all of the energy oriented agencies in the State
with a view to consolidate and give a new and broader
definition to the key regulatory and administrative
bodies concerned in energy. This includes, for example
an analysis of the Public Utilities Commission, the
Air Resources Board, the State Water Resources Control
Board, the State Lands Commission, the Department of
Transportation, Coastal Conservation Commission and its
regional commissions, and other entities within the
Resources Agency. The powers of these bodies must be
reexamined with a view to updating, streamlining, and
conferring necessary powers on the regulatory and
administrative bodies best able to carry out the energy
policy of the State. The following recommendations were
made:*
A. Create a California Energy Office in the Office of
the Governor to recommend energy policies to the
Governor and deal with such problems that may emerge
from an energy shortage. The California Energy
Office will consider all aspects of the energy
problems of the State including social, economic,
environmental and cost factors, and will make
appropriate recommendations to the Governor. The
California Energy Office will also recommend to
the Governor a system of priorities for the allo-
cation of fuels and energy in the event of shortages.
The California Energy Office will be dissolved when
an Energy Policy Council is authorized by the
Legislature.
*
One of the issues considered was nuclear power plant
siting safety. Some participants felt that uncertainties
concerning reactor safety require a "go-slow" approach to
nuclear power plant development in California. Other
spokesmen expressed the view that the current state of
knowledge on these matters is fully adequate to justify
the fastest possible implementation of nuclear power.
No consensus was reached.
-6-
B. Request the Legislature to create an Energy Policy
Council to determine a statewide energy policy and
prepare long-range plans for the development and
use of fuel and energy in the State. This Council,
when created, will take the place of the California
Energy Office and will consider economic, social,
environmental costs and all other pertinent factors
in establishing such policy. The Council will
coordinate all of the multiple energy activities of
the State to the extent possible. Where the Council
does not have jurisdiction over the activities of
existing agencies, it will nonetheless recommend
to those agencies policies that are in conformity
with the overall State energy policy and long-range
planning. The Council should be structured so as
to represent all segments of the public.
C. Adopt legislation to facilitate the siting of all
energy facilities within the State. This may
involve the creation of a new authority with power
to consolidate and, in some cases, supersede the
authority of existing bodies. In the alternative,
it may require the consolidation of existing
authorities with additional powers to integrate
their activities and expedite their siting processes.
The siting authority will include not only electrical
facilities, but oil refineries, deep water ports,
unloading facilities and special facilities designed
for the development of advanced sources of power such
as geothermal, solar, or advanced nuclear.
D. Urge the diversion and use of highway gas tax funds
for rapid transit systems.
E. Recommend that the Legislature appropriate money for
research and development in the energy field. This
money is not designed to take the place of or even
augment federal research programs, but rather is
designed to enable the State to attract federal funds
by demonstrating a willingness to put up some
matching money. Examples of research in which the
State has a particular interest are solar energy,
geothermal energy, hydrogen generation from water
using nuclear energy and the further development of
high temperature, gas-cooled nuclear reactors.
F. Urge utilities, both public and private, to increase
their participation in research and development
projects dealing with current and proposed technology
in the field of electrical generation, transmission
and distribution, and encourage the State regulatory
bodies to recognize such contributions as fully
deductible expenses.
G. Expand the category of interruptable customers for
both electricity and gas.
-7-
H. Set minimum energy performance specifications on all
buildings in the State as a condition for granting
building permits.
I. Analyze all of the regulatory and administrative bodies
of the State dealing with energy problems with the
objective of reorganizing those agencies to achieve a
more effective, coordinated and all-inclusive response
to the energy policy as enunciated by the Energy Policy
Council.
-8-
Summary Of The
Energy Workshop Recommendations
I. Supply
A. Research and Development
The State research and development program, proposed by
the policy implementation committee, should give priority
consideration to the seven research and development
program areas listed in the supply section of the Energy
Policy Report.
B. Offshore Oil Production
The State should proceed to develop offshore oil and
gas reserves in State lands, giving full concern for
the quality of the environment.
C. - Deep Water Ports
The State should facilitate the siting of deep water
ports and storage facilities.
D. Secondary and Tertiary Oil Recovery
The State should encourage secondary and tertiary oil
recovery.
E. Onshore Oil and Gas Development
The State should encourage onshore oil and gas development.
F. Nuclear Power
The State should do what it can to expedite the
implementation of nuclear power, consistent with the
satisfactory resolution of environmental and safety
,
concerns. This includes encouraging the federal govern-
ment to resolve these issues as rapidly as possible.
G. Geothermal Power
The State should encourage the development of geothermal
power.
II. DEMAND
A. Transportation
(1) Reduce speed limit on highways to 50 miles per hour.
(2) Encourage car pooling.
(9)
(3) Expand the bus systems.
(4) Establish protective bicycle lanes and paths.
(5) Institute gasoline rationing.
(6) Develop taxes and other incentives designed to
reduce the weight of the automobile.
(7) Prohibit automotive air conditioning units on new
automobiles.
(8) Press for California Air Resources Board automotive
emission standards rather than federal standards.
(9) Use gas funds for rapid transit.
(10) Study the establishment of ceiling on per capita
transportation, (e.g., limiting the number of air
travel miles per person).
(11) Utilize advanced communication techniques to reduce
travel, where feasible.
B.
Industry
(1) Develop recycling incentives.
(2) Urge industry to conserve energy.
(3) Utilize energy consultants' advice on potential
savings.
(4) Study energy conservation technological improvements.
(5) Reduce packaging to conserve energy.
(6) Reduce energy consumption per unit of industrial
output.
C. Residential and Commercial Buildings
(1) Initiate a massive public educational program to
encourage lower thermostat settings in the winter
and higher thermostat settings in the summer.
(2) Prohibit the use of electricity for resistive space
and hot water heating on new installations.
(3) Revision of the State policy for leasing buildings
to include the establishment of minimum energy
efficiency standards that must be met before a
building can be leased by the State.
(4) Establish minimum performance standards for new
-10-
air conditioning units.
(5) Prohibit pilot lights on new gas appliances and
substitute electrical starting devices.
(6) Study technological improvements such as use of
solar, reflective glazing, increased insulation
and heat recovery systems.
D.
Utilities
(1) Institute utility-sponsored conservation programs.
(2) Study restructuring rate schedules for both electricity
and gas pricing.
(3) Study the use of solid wastes as boiler fuel.
(4) Study peak seasonal pricing.
(5) Study methods to improve transmission efficiency.
(6) Study methods to improve generation efficiency.
(7) Include all social and environmental costs in the
price of energy.
III.
POLICY
A.
Research the powers of the Governor under the Constitution
and the laws of the State to establish an energy policy
to meet the fuel and energy shortages.
B. Create a California Energy Office in the Governor's
Office to establish an energy policy and to handle
shortages of fuel, energy and similar emergencies.
C. Suggest legislation creating an Energy Policy Council
with the power to establish a State-wide energy policy,
develop long-range plans for meeting the energy require-
ments of the State, and establish an orderly machinery of
government to deal with the allocation of fuel and energy
in the event of shortages and to cope with emergency
situations.
D. Suggest legislation to facilitate the siting of all types
of energy facilities within the State.
E. Urge the diversion and use of highway gas tax funds for
rapid transit systems.
F.
Recommend that the Legislature appropriate money for
research and development in the energy field.
-11-
G. Urge utilities, both public and private, to increase
their participation in research and development projects
dealing with energy technology.
H. Expand the category of interruptable customers for both
electricity and gas.
I. Set minimum energy performance specifications on all
buildings in the State as a condition for granting
building permits.
J. Study the interrelation and reorganization of all
regulatory and administrative authorities responsible
for the energy matters in the State.
K. Encourage the Public Utilities Commission to respond to
the need to conserve energy.
L. Congress is urged to deal at once with the statutory
problem underlining the Alaskan pipeline.
-12-
THE
OPTHE SEAL CALBORNIA REPUBLIC CALIFORNIA
Management Bulletin
XXXIII
From the Office of Governor Ronald Reagan
Ed Thay
Energy
MF 73-17
ENERGY PIANNING COORDINATION
Lieutenant Governor Ed Reinecke, Chairman of the Energy
Planning Council, has appointed Wes Bruer as Energy
Planning Coordinator for the Council. Mr. Bruer was
formerly State Geologist and Chief of the Division of
Mines and Geology in the Department of Conservation.
The Energy Planning Coordinator will perform the following
functions:
(1) Provide staff services to the Energy Planning Council.
(2) Coordinate the implementation of decisions made by
the Energy Planning Council.
(3) Coordinate energy-related activities of the various
elements of state government.
(4) Maintain liaison with the Federal Energy Administrator
in the Executive Office of the President, and such
federal agencies and other organizations as may be
directed by the Energy Planning Council.
(5) Provide a single point of contact for information
and inquiries concerning energy policy matters.
(6) Such other specific functions as may be assigned by
the Energy Planning Council.
In the performance of his activities, the Energy Planning
Coordinator will report to the Chairman of the Energy
Planning Council. Necessary administrative support will
be provided by the Office of Planning and Research.
It is the policy of the Energy Planning Council that
existing resources of state government be utilized to the
maximum extent possible in solving problems related to
energy. Ongoing energy-related functions will continue
as they have in the past (i.e. Public Utilities Commission
concerning utilities; Resources Agency and Department of
Conservation concerning natural resources; Office of
Science and Technology concerning liaison with scientific
community and research and development activities; Office
of Emergency Services concerning emergency planning, etc.)
The Energy Planning Coordinator will work with the various
agencies involved in these energy-related activities and
will provide a focal point for coordination of effort.
To facilitate this coordination, it is requested that all
elements of state government provide the Energy Planning
Coordinator with information, copies of correspondence,
and advice of federal and other contracts related to
energy policy.
FOR THE GOVERNOR:
Edwin Meese III
III
EDWIN MEESE III
Executive Assistant
to the Governor