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Groups Fueling Ad Blitz for LNG

A coalition hires a consultant with ties to Gov. Schwarzenegger to bolster public support for liquefied natural gas.

December 13, 2004|Marc Lifsher | Times Staff Writer

SACRAMENTO — An influential business coalition has hired Gov. Arnold Schwarzenegger's favorite political consultant to mount a $1-million public relations blitz touting the benefits of liquefied natural gas.

The pro-LNG offensive being planned by consultant Mike Murphy has the earmarks of a campaign for public office, relying on advertising, polling, focus groups and other tools of the political trade. Murphy's new bosses, which include energy companies and some of the state's richest and most savvy special interest lobbying groups, want him to redefine the debate over LNG, a controversial form of natural gas.

"We're going to need more natural gas in the state in the coming decade to fuel our economy," said Joseph Lyons, an energy lobbyist with the California Manufacturers and Technology Assn., one of the leaders of the Californians for Clean Affordable and Safe Energy coalition. "We're not going to be able to conserve our way out of a gas crisis."

Developers are vying for financing and permits to build as many as half a dozen coastal terminals in California and northern Mexico to unload the LNG. The gas, produced in such distant countries as Australia, Indonesia and Russia, is supercooled until it turns to liquid so it can be shipped across the ocean in special tankers.

For The Record
Los Angeles Times Thursday December 16, 2004 Home Edition Main News Part A Page 2 National Desk 1 inches; 56 words Type of Material: Correction
Liquefied natural gas project -- A chart with an article about liquefied natural gas in Monday's Business section indicated that Royal Dutch/Shell was a partner with Sempra Energy in the proposed Energia Costa Azul project in Baja California, Mexico. Shell has committed to buying output from the facility but does not have a stake in it.

Industry and government officials contend that importing large volumes of LNG would diversify California's sources of natural gas, which is burned to generate most of the state's electricity.

Without a steady flow of LNG, the state could be whipsawed by the kind of volatile prices that boosted electricity and natural gas bills during the energy crisis of 2000 and 2001, LNG advocates say.

But LNG projects have ignited considerable opposition.

LNG critics -- mainly environmentalists, alternative energy advocates and coastal residents -- say the state should work to become less dependent on fossil fuels. They worry about accidents or terrorist attacks, and those fears have generated headlines and stirred up environmental activists and homeowners along the Pacific coast.

Now, industry is getting ready to fight back, led by the California manufacturers and technology coalition and the California Chamber of Commerce.

What's needed to win the LNG war is an industry-sponsored campaign that "will provide political air cover to elected officials of both parties who might be willing to support LNG but fear fallout [from voters] in their districts," according to Murphy's winning sales pitch, which was presented to the state manufacturers group in August.

The pro-LNG coalition includes the California League of Food Processors, California Retailers Assn., California Building Industry Assn., Western States Petroleum Assn., Agricultural Council of California, Silicon Valley Manufacturing Group and the American Electronics Assn. It also has the backing of energy companies vying for a foothold in the potentially lucrative California LNG market: Sempra Energy, Royal Dutch/Shell Group, ChevronTexaco Corp., Mitsubishi Corp., BHP Billiton and Woodside Petroleum Ltd.

The trade groups and energy corporations have contributed tens of millions of dollars to the political campaigns of Schwarzenegger and lawmakers in recent years.

Industry leaders said they picked Murphy and his firm, Navigators, because of the thoroughness of their plan to unleash an "air and ground war" in the media, the statehouse and community forums up and down the state. The campaign's goal is to convince people that LNG is "important to the economy ... safe ... and good for the environment."

Energy lobbyist Lyons of the state manufacturers association said his group was particularly impressed with Murphy's record of helping Schwarzenegger oust then-Gov. Gray Davis in the 2003 recall election.

Navigators further burnished its reputation by running Schwarzenegger's subsequent ballot efforts to refinance the state debt with $15 billion in bonds and to defeat initiatives by Indian tribes and race tracks to expand casino gambling.

In between Schwarzenegger's campaigns, Navigators, which opened a Sacramento office in the shadow of the state Capitol late last year, has nurtured a private-sector practice. Last summer, it managed a drive by Calpine Corp. and other non-utility electricity generators to kill a bill backed by Southern California Edison Co.

The proposal, AB 2006 by Assembly Speaker Fabian Nunez (D-Los Angeles), would have partially re-regulated California's power market. It passed the Democratic-controlled Legislature but was vetoed in September by Schwarzenegger.

"We interviewed a lot of firms and chose the team that could do the best job," Lyons said. "We knew they could hit the ground running on this energy stuff."

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