As part of a broad North American search for ways to make western wholesale natural gas markets more competitive, Humboldt Bay in the northern end of California’s 1,000-mile coastline is the unlikely site of a proposed combination electric generating plant and liquefied natural gas (LNG) receiving terminal envisioned by San Jose, CA-based Calpine Corp., a major national developer of gas-fired power plants.

The company confirmed last week that it has been meeting with city, county and business leaders in Humboldt County, a sparsely populated area 150 miles north of San Francisco with major timber and maritime industries. The port at Humboldt, which is the second largest of the West Coast deepwater harbors, is one of the potential sites Calpine is assessing on a preliminary basis.

“Beyond that, it is conceptual at best,” said Kent Roibertson, a Calpine spokesperson. However, he noted that the remoteness of the site from the state’s energy infrastructure and load centers is not a initial problem in basic LNG site assessment steps.”The first step is to have a deepwater harbor and an established port. That is where you start and then you solve your utility infrastructure problems from there. You first have to have the ability to bring the gas in.”

In addition to eyeballing potential sites all over North America, Calpine on a very preliminary basis also is talking about some established LNG operators and proponents of terminals elsewhere around the U.S. and Mexico as potential joint venture partners. “It is a matter of determining what is feasible because you are talking about a sizable investment,” Robertson said.

In what is considered an independent-minded and environmentally sensitive corner of California, the local community response to Calpine’s concept is critical to whether the company takes the proposal to more serious (and costly) junctures. A 200 MW or larger power plant, whose waste heat could be used to re-gasify the LNG is part of the early concepts, according to Calpine officials.

Aside from the economic, environmental and political issues, Calpine faces many logistical questions because the Humboldt Bay area is remote from the state’s main energy infrastructure of large-diameter natural gas transmission pipelines and the electricity grid. In addition, local political leaders have already identified potential seismic and navigational issues that would have to be fully addressed.

“We’re looking at it from the marketplace perspective,” said Robertson, noting that in the northern half of California there are only two major sources of natural gas — Western Canada and the Southwest — from two major interstate pipelines. “Our take is that if being able to shop at two stores is good, three is even better.

“Calpine is not in the LNG business — we don’t have any tankers or overseas gas reserves. We would be looking to partner with an established player in the LNG industry, and we’d be a major customer.”

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