Cabrillo Port Smog Impact Estimates Climb Upward

• New Memos Show BHP Billiton Is Leaning on EPA to Approve Project as Quickly as Possible

BY HANS LAETZ

The Australian company that proposes to build a floating liquefied natural gas terminal off Malibu has disclosed that the project would emit twice as much smog-causing chemical pollution into the air, upwind of Malibu’s Point Dume, than it had originally estimated, according to newly discovered memos.

Federal officials also say that BHP Billiton told them last month that “it would not consider as legally binding” any vote by Ventura County smog authorities to eliminate a regulatory loophole in smog laws that benefits Cabrillo Port. Local officials took just such a vote last week.

And federal officials said the company is seeking to avoid adding catalytic scrubbers to the floating LNG terminal because the units would be too unstable and unsafe to work on while the ship bobs on the high seas off Malibu, and it would cost $20 million to make the ship longer to accommodate laying the scrubbers on their sides.

These findings are contained in hundreds of pages of memos and e-mails exchanged by BHPB and Environmental Protection Agency regulators obtained by the Malibu Surfside News last week.

The public records show what environmental activists say is a heavy-handed attempt by the Australian company to rush through Cabrillo Port’s air discharge permits to meet the company’s self-imposed deadline of starting LNG imports to the project on July 1, 2010.

In one memo, EPA officials said they were confused by three different smog estimates provided over the past year by BHP Billiton.

In response, the company issued a revised prediction totaling 521 tons per year of sulfur oxides, nitrous oxides, petrochemicals and particulate matter that would be released into the local skies by Cabrillo Port and the fleet of tugboats and LNG carriers that would attend it.

Those chemicals are ingredients for smog. Weather patterns in the Malibu area show the discharges blowing towards the Malibu-Santa Monica area most of the time.

The published estimate for the terminal itself had been 261 tons, but the company now says the terminal would emit 298 tons per year. Company spokesman Patrick Cassidy says the total grew by 14 percent because the EPA asked BHPB to include the emissions caused by pumping the LNG from the carriers onto the terminal.

An Oct. 16 letter from BHPB attorney Thomas R. Wood says there would be 182 tons per year of smog from tugboats and LNG carriers, an estimate that had not been publicly disclosed until now. Much of that discharge will be further offshore than the terminal, as the LNG carriers steam into U.S. waters and switch from using dirty bunker fuel to cleaner-burning natural gas, Cassidy said.

The overall amount of pollution was computed by adding the separate categories of emissions for terminal, tugboat and ship operations found within four different sections of the Oct. 16 letter.



Cassidy disputed that methodology as a “non-standard practice.”

“Lumping the air emissions together can lead to flawed or misleading analysis because of the unique characteristics and effects of individual emissions,” he said in an e-mail from his Houston office.

“This analysis fails to provide a true picture of the air quality impacts of our project as it does not take into account the significant mitigation and emission reduction programs that BHP Billiton has committed to, which will enhance air quality in the region before the facility is even operating.”

But EPA officials said The News’ method of totaling the emissions data “sounds fair.”

“If you add up all the tables, the totals would give you all the emissions from the project,” said Gerardo Rios, an EPA air permit manager in San Francisco.

Rios noted that the current air permit is only for the 289 tons of fixed-source emissions from the terminal itself, not the 182 tons of smog from ships.

At public hearings last summer, some Malibu residents demanded to know exactly how much smog would be generated by the LNG terminal and its fleet of ships. Following those hearings, EPA officials and other regulators asked BHP Billiton to supply that data.

Other new documents detail a meeting in Washington, also on Oct. 16, where BHP Billiton President Renee Klimczak told the EPA she had learned that the Ventura County smog board was planning to vote to clarify that its onshore smog regulations do indeed apply to Cabrillo Port. “BHPB stated that it does not consider the board’s opinion to be legally relevant,” wrote EPA air scientist Joseph Lapka, “and asked for EPA’s views on the matter.”

Lapka wrote that EPA told BHPB it has no views or decision, yet, on the contentious issue.

Last week, Ventura smog officials voted 9-0 that their own rules had been misinterpreted by EPA and the company, when they said the LNG terminal would not have to meet strict onshore smog rules. EPA says it will announce a new decision on the onshore smog rules early next year, and if it goes against the company, Ventura officials say it might be impossible for the project to be built.

Lapka also wrote that the company rejects possible California Coastal Commission jurisdiction over the smog rule issue. Coastal Commission staffers have been told by EPA that Cabrillo Port does not pass the strictest smog standards, and the Coastal Commission may withhold a coastal permit for the ship based on that.

In Malibu, city councilman Andy Stern said he wasn’t surprised that EPA is getting heavy pressure from the company. “They clearly would like to be exempt from the pollution standards that apply to other firms,” he said.

The EPA documents include records of meetings between BHPB officials and regulators, some of them as recent as four weeks ago, in which the company asked the bureaucrats to process Cabrillo Port’s air discharge permits as quickly as possible. The company told EPA that it wanted to get the smog permits at the same time that the Coast Guard and Commerce Department issue the overall project license, which the company says it wants before the end of the year.

But EPA’s Lapka said he told the company it must provide data that the company says would take five months to gather. In a memo last month, Lapka held firm and said the air discharge permit could not be issued until those questions are answered.

Among the latest unanswered questions from EPA is a request for the company to explain just exactly how much natural gas will leak from the ship.

“The Environmental Impact Report didn’t address such leaks at all, and that can be a significant problem at other similar facilities,” said Karen Krauss, an attorney at the Environmental Defense Center. “It looks like the EPA is following up on our comments that this needed to be addressed.”

Cassidy, in an e-mail from his Houston office, said state of the art engineering will ensure such leaks will be kept to an “immeasurably small” amount.

Many of the EPA questions are similar to those filed by EDC during the public comment period last summer. The EDC challenge is partly funded by contributions from the City of Malibu and local residents.

In another exchange, EPA asked the company why it had rejected a catalytic air-pollution reduction system for Cabrillo Port. According to EPA, the company’s answer was that the scrubber was not safe on a floating ship, as it would be potentially explosive, and that the machinery would tower high over the ship, endangering employees who would have to work on the machinery as the floating LNG terminal heaves with the sea.

EPA officials, however, said BHPB could lay the scrubber on its side on the floating ship by making the vessel longer. EPA told the company that its $20 million price tag for extending the ship is not an acceptable reason for rejecting the scrubber, which EPA says is mandatory because other LNG terminals use the same technology to remove air pollution from the exhaust.

BHPB has also backed away from a promise to use LNG as a pollution-reducing fuel for its tugboats and supply vessels, a major part of the company’s campaign to win community support in 2004.

The company’s president wrote this fall that “community concerns have repeatedly questioned the safety of natural gas-powered support vessels operating in and around Port Hueneme. Although we know from existing technology that natural gas-powered vessels would pose no particular safety risk to the port, we respect the safety-related concerns being raised.”

Klimczak said a new type of clean diesel engine will be used on the tugs, which she promised would be about as non-polluting as the promised LNG engines.

Among other documents in the file was BHP Billiton’s timeline, which shows the company plans to start construction on its floating LNG storage and regasification factory ship in another nation—no shipyard in the U.S. can handle the massive ship—on Jan. 1, 2009.