South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: October 4, 2002 AGENDA NO. 8
Issue RFP to Develop Production of LNG Fuel in the South Coast Air Basin
SYNOPSIS:
At the September 21, 2001 Meeting, the Board set aside up to $3,000,000 from the Clean Fuels Fund to develop production of LNG fuel in the South Coast Air Basin, and directed staff to work with potential stakeholders, including local fleet operators, state and federal agencies to seek further co-funding. Staff recommends issuance of an RFP to solicit cost-share proposals for the production of LNG fuel in the South Coast Air Basin. Total funding available under this RFP is $1,551,318 from the Clean Fuels Fund. Project funding will range up to 50% of the project costs.
COMMITTEE:
Technology, September 27, 2002, Recommended for Approval
RECOMMENDED ACTION:
Approve issuance of RFP #P2003-13 in an amount not to exceed $1,551,318, to solicit cost-share proposals to develop production of LNG fuel in the South Coast Air Basin using funds from the Clean Fuels Fund.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
On September 21, 2001, the Board set aside up to $3 million from the Clean Fuels Fund to develop liquefied natural gas (LNG) fuel production facilities in the South Coast Air Basin, and directed staff to work with potential stakeholders, including local fleet operators, state and federal agencies, to seek further co-funding. At its December 2001 meeting, the Board directed $1,448,682 of the $3 million to support the expansion of the LNG refueling network. With this action, staff proposes to issue an RFP to solicit cost-share proposals from public agencies and/or private entities to develop production of LNG fuel in the South Coast Air Basin with the remaining available funds.
Staff estimates that the clean fleet vehicle rules will result in the purchase of about 300 to 500 new, LNG-fueled vehicles annually. The CEC report also projects that there will be a total of 3,224 LNG-fueled vehicles operating on California roadways by mid-2006. Based on the current fuel delivery volume of about 25,000 gallons per day, AQMD staff estimates that within one and a half years (the timeframe to order vehicles and take delivery), the demand for LNG fuel could double with implementation of the fleet vehicle rules.
With the projected increase in demand for LNG-fueled vehicles in the South Coast Air Basin, it is desirable to establish a local supply of LNG. Having LNG produced locally would reduce the dependency on long-distance (out-of-state) suppliers of LNG fuel.
Proposal
The proposed RFP will provide cost-share funds to assist public agencies and/or private entities to develop production of LNG fuel in the South Coast Air Basin. Total funding available for this RFP is $1,551,318 from the Clean Fuels Fund.
This RFP will solicit cost-share proposals from public agencies and/or private entities to develop a LNG production plant(s) in the South Coast Air Quality Management District’s jurisdictional boundaries. Proposed projects will be required to provide a detailed description of the proposed natural gas liquefaction technology, feed gas pretreatment, liquefaction process, LNG storage, method of delivering LNG to vehicle fueling stations in the South Coast Basin, and project financing. Proposed projects may include on-site, skid-mounted, pressure-drop, or peakshaving liquefiers, or other types of natural gas liquefaction plants. Proposed projects may also include the expansion of an existing facility, such as a natural gas processing and distribution facility or a power plant (including cogeneration). Projects including the installation of used liquefaction equipment at a new location within the jurisdictional boundaries of the South Coast Quality Management District district may also apply under this RFP.
Applicants may be either public agencies or private entities. Cost-share participants may include state and local governments, local natural gas providers, manufacturers of natural gas liquefaction systems, LNG suppliers, LNG marketers, and end users of the LNG fuel. Cost-share funds can only be requested for capital investment costs associated with the LNG production plant.
The general requirements of the RFP are identified below:
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Proposed project must be located within the jurisdictional boundaries of the South Coast Air Quality Management District. |
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Proposed project shall have a minimum capacity of 5,000 gallons per day. |
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Project construction schedule shall be limited to a two-year timeframe. A sliding scale will be used to provide additional points to projects that can be completed within a shorter time period. |
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Proposed projects that are co-located with an electricity generating facility, such as a co-generation plant, are considered desirable since these projects are expected to minimize electricity demands. |
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Proposed project may request cost-share funds for capital investment costs only. |
Benefits to AQMD
The AQMP relies on the expedited implementation of advanced technologies and clean fuels in Southern California to achieve air quality standards. By establishing a local sup-ply of LNG fuel in the South Coast Basin, benefits from this project will accrue to the re-gion. The new construction will provide a local supply of LNG fuel, thus reducing the dependency on long-distance supplies of LNG fuel. Producing LNG locally is expected to minimize transportation costs for public and private fleet operators subject to AQMD's fleet vehicle rules. While having no direct impact on air emission reductions, the production of LNG fuel in the South Coat Basin will help facilitate the introduction of low emission, LNG-fueled vehicles which do reduce emissions and will support the implementation of AQMD's fleet vehicle rules, particularly Rules 1192, 1993, and 1196.
There are existing proposals and plans that are being considered to produce LNG fuel in California. This RFP seeks to develop production of LNG fuel in the South Coast Basin within the next two years, and reduce dependency on long-distance supplies of LNG fuel. This RFP also seeks to provide an alternative supply of LNG fuel to public and private fleet operators that are complying with AQMD's fleet vehicle rules.
Outreach
In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the RFP and inviting bids will be published in the following publications:
Additionally, potential bidders will be notified utilizing the Los Angeles County MTA Directory of Certified Firms, the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; and AQMD’s own electronic listing of certified minority vendors. Notice of the RFP will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon, or http://www.aqmd.gov/busjob/ ] and AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.
Trans Directories of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notice of the RFP will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon] and AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.
Bid Evaluation
Proposals received will be evaluated by a diverse, technically qualified panel in accordance with criteria contained in the attached RFP.
Resource Impacts
Total funding for the RFP is in the amount of $1,551,318 from the Clean Fuels Fund (Fund 31).
RFP #P2003-13 - Develop Production of LNG Fuel in the South Coast AQMD
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