White House Played Key Role in Reducing Smog Requirements for Cabrillo Port LNG Proposal

Direct pressure from the White House caused Environmental Protection Agency scientists to reverse themselves last summer on an important smog regulation, removing a key obstacle to potential development of a smog-producing, floating liquefied natural gas terminal off the Malibu coast.

E-mails and letters obtained under a Freedom of Information Act request show how BHP Billiton, an Australian energy conglomerate, was able to exercise political clout at the White House to get an important exemption from the federal Clean Air Act for its Cabrillo Port plans, coastal advocates said.

BHPB wants to operate a floating LNG storage depot and regasification boilers onboard an aircraft carrier-sized ship it seeks to anchor permanently within sight of some of California’s last undeveloped coastline. Coastal advocates partly funded by the City of Malibu and a local fundraising drive obtained the documents last week from EPA.

“We do not believe that a company should be able to buy its way out of environmental regulations designed to protect the public’s health and safety,” said Susan Jordan, director of the California Coastal Protection Network. She said BHPB and the Australian government have spent “more money than Exxon” lobbying in Washington and Sacramento for Cabrillo Port.

Company spokesman Patrick Cassidy in Houston noted “it is certainly within a company’s right” to lobby on its own behalf. “We, as an applicant in this process, have as much right to give our views as anyone else,” he said.

BHP Billiton has had a hard time convincing environmental groups that importing LNG through Malibu and Oxnard is as environmentally-friendly as the company maintains. The company notes that natural gas can be used instead of coal or oil to generate electricity, and will emit far less pollution in the generation process than other electricity sources. Industry groups in California have campaigned on BHPB’s behalf, saying the state needs to diversify and increase its energy options.

The EPA reversal last summer came after visits to the White House by the Australian prime minister and energy minister, who told Australian newspapers that Cabrillo Port was one of the major issues they discussed. President Bush has cited the Australians for their support of such administration initiatives as the war in Iraq, and critics note that the Cabrillo Port project is worth $50 billion in natural gas exports down under.

The documents include letters from Bob Middleton, director of the White House Task Force on Energy Streamlining, who sought expedited handling of BHPB requests. Although EPA at first resisted watering down smog regulations, the agency eventually found what critics call a loophole in Ventura County smog regulations by allowing BHPB to emit 270 tons of smog-producing chemical waste into the air near Malibu without offsetting the pollution by buying and retiring similar pollution discharges in the same air basin.

Enforcing such a requirement, as the EPA had insisted upon throughout 2004 and 2005, would likely have prevented the project from being built. EPA resistance to the Cabrillo Port plans include a 14-page memorandum that was sent to the White House in July 2004 defending the agency’s determination that offsets were mandatory before Cabrillo Port could get its smog permits.

One of the documents released this week was an e-mail from a BHPB official, Steve Meheen, to the White House, complaining about the first EPA decision. In that letter, Meheen thanked Middleton for “taking my call and your interest in this matter.” The letter went on to suggest that EPA consider Cabrillo Port to be exempt from offset requirements by essentially changing the boundary on air basin maps.

In mid-2005, after the White House pressed for an answer from EPA, the agency reversed itself and declared that the project was not a part of the Ventura County mainland, but a part of the more-distant Channel Islands, where smog rules are looser. That action was challenged as illegal by Malibu coastal activists, after a Malibu newspaper reported about the change in 2005.

The regional EPA air office chief in San Francisco, Amy Zimpfer, kept White House officials posted on the change in regulatory stance. The highest-ranking EPA air administrator in Washington then wrote a note of thanks to Zimpfer after she announced the change in an e-mail: “Thanks, Amy, to you personally and your team for making this happen,” wrote Air and Radiation Office Chief Jeffrey Holmstead on July 1, 2005. “I believe this is a good result for everyone.

”Holmstead, a former energy company lawyer and lobbyist, is one of several former utility company executives who had vigorously fought smog regulations during Bill Clinton’s presidency, and who were appointed to key regulatory positions by President George W. Bush. Six democratic senators have asked for a probe into his qualifications and actions as the nation’s chief clean air enforcer, the Denver Post has reported.

EPA officials at the San Francisco regional office were not in early this week. Although they have already changed their minds once, Zimpfer said in July that a final decision on the Cabrillo Port air pollution permit will come after the agency wades through public comments on the scientific and legal issues. More than 1,200 people sent comments to the agency during the public hearing process last month, and although those comments have not yet been publicly released, the vast majority of people speaking out at two Oxnard hearings this summer raised scientific objections to the EPA’s smog decision.

Particularly galling to coastal advocates is that BHP Billiton officials were able to gain access to private meetings with federal officials while local advocacy groups representing the City of Malibu, and the public, were frozen out of the process. In addition, BHP Billiton wrote to thank government officials for changing their minds before any public announcements about the changes were made.

In one of the just-released documents, BHP Billiton President Renee Klimczak wrote a thank you note to EPA officials for ending the offset requirements on June 7, 2005, a full three weeks before EPA publicly announced that decision.

“The Bush Administration is notorious for greasing the skids for oil and LNG projects,” Jordan said. “What we need now is for the Schwarzenegger Administration to step up to the plate and put a stop to this, a project that we believe is clearly violating the Clean Air Act.”

BY HANS LAETZ

Another LNG Plan Slated for Local Waters

A second Australian energy company has filed an application to build a floating offshore liquefied natural gas offloading station within sight of Malibu. But the proposal from Woodside Petroleum avoids some of the aesthetic and pollution impacts that have many Malibu residents up in arms about the BHP Billiton LNG proposal called Cabrillo Port.

But despite what some coastal advocates call a better LNG plan, the proposed state law that would pit LNG terminals against each other in a comparative licensing process is suddenly in trouble in Sacramento.

Woodside Natural Gas filed an application Friday to use federal and state tidelands for its OceanWay LNG terminal, which would include a pair of undersea buoys 22 miles south of Point Dume. Unlike BHPB’s controversial Cabrillo Port planned for 13.8 miles off Leo Carrillo Beach, there would be no large, permanent floating storage and regasification ship stationed at OceanWay.

Rather, Woodside would convert LNG into natural gas on board its fleet of transport ships. In addition to eliminating the aircraft carrier-sized permanent factory ship planned by BHP Billiton, OceanWay would avoid emitting large amounts of smog-producing chemical waste into the skies by using an ambient air heat transfer system.

“We listened to the concerns all along the California coast, and there seemed to be major concerns about the visual impact of a permanent unloading facility, and about air emissions,” said Woodside spokesman Michael Hinrichs.

An animation released by Woodside shows the submerged buoys sitting at rest below 100 feet of ocean water, with small snagging buoys floating on the surface. After picking up the floating buoy, the transport ship would hoist the submerged buoy up into the ship’s bottom, and natural gas hoses would be plugged into the ship.

At that point, the transport ship would use outside air to heat the liquefied gas up from -260 degrees Fahrenheit to room temperature.

“We anticipate using the surrounding air to warm up the LNG almost all the time, except when during extremely cold weather,” Hinrichs said. “In those rare cases, we would need to heat the incoming air using natural gas.” Hinrichs said that would happen a maximum of 10 percent of the time, “but in all probability much less than that. We plan on using plain air nearly all the time.

”Twin natural gas pipelines would bring the fuel ashore near Los Angeles International Airport.

BHP Billiton’s project, proposed for 13.8 miles off Malibu, has been dogged by objections to the 270 tons or more of smog-causing sulfur and nitrogen oxides, and petrochemical residue, that would be sent up Cabrillo Port’s smokestacks each year as a result of its oven-based regasification technology.

A BHPB spokesman in Texas said he has not seen Woodside’s application and cannot comment on its relative pollution potential compared to Cabrillo Port. But Patrick Cassidy said no one should call Woodside’s project nonpolluting, “as the process likely requires pumps, which require electricity, which require natural gas, which creates emissions.

”Cabrillo Port will also generate electricity for its pumps, if approved.

BHPB has also refused to comment on an application by a third company to regasify LNG at an old offshore oil platform in Ventura County, a request that also would use the cleaner ambient air system.

But Malibu City Councilman Andy Stern said he does not trust Cabrillo Port’s owners, because they had originally said their boiler regasification system was the cleanest-possible technology in the world.

“I think Billiton should call those other companies, get the facts, and then learn how to process natural gas cleanly,” Stern said.

Stern voiced frustration that the various LNG projects do not require a competitive judgment, where the cleanest system would win permits to use state and federal tidelands. A proposed state law to require a needs assessment and competitive licensing faces a tough battle in the legislature, and environmentalists say it may be killed.

“On top of that, we don’t know if the governor will sign this bill, even though he is placing himself as an environmental defender this election,” said Susan Jordan of the California Coastal Protection Network. “He has already shown himself to be sympathetic to LNG in general and BHP Billiton in particular.

”Under the federal Deepwater Ports Act, the Coast Guard and Commerce Department have 21 days to examine the Woodside application, and send it back to answer any questions. Once the company’s application has been modified, federal and state agencies have about a year to conduct environmental and safety research before making a decision on the permit.

In OceanWay’s case, the local agency that will have to sign off on the Woodside project will be the City of Los Angeles, as the pipeline will come ashore within its city limits.

BY HANS LAETZ

City Close to Making Deal on Key Business Site

Malibu city officials indicate that they are poised to seal a deal with a real estate development company to take over the leasing arrangements of the old lumber yard site.

The city, during the summer, conducted a solicitation and selection process to determine possible candidates for occupying the site that became available when Malibu Lumber vacated the premises.

By the end of June, the city council had hired a law firm, Brown, Winfield and Canzoneri, that specializes in commercial leasing by public entities, to help select a bid.

Of the nine proposals, bidders were narrowed down and then several finalists were chosen.
The council’s ad hoc committee, consisting of Councilmembers Sharon Barovsky and Pamela Conley Ulich, sat in on interviews of the finalists. It is believed the full council tentatively tapped one of the top finalists at its closed door meeting last week.“

I don’t have any comment to make other than we are in the midst of negotiations,” said City Attorney Christi Hogin, who declined to comment on whether a top contender had been chosen.

Barovsky, who also declined to name the top choice, did elaborate. “We have not selected a project yet. We have narrowed it down to one project, but we are doing our due diligence,” she said.

The council member said the city was looking for a project that could serve the needs of the community, set aside a certain percentage of space for local retailers and meet the requirements for debt service.

There were two remaining finalists; Weintraub Financial Services, Inc. and Watt Realty Advisors, which is a Santa Monica-based realty firm, according to sources familiar with the selection process.

When contacted, some of the finalists indicated they were not the top pick. Others would not speak for the record. One had dropped out earlier.

“We were told we did not make it,” said Tony Dorn, one of the local firms submitting a bid through Beitler Commercial Leasing, an agency that represents commercial properties in Malibu and the Westside.

Another local firm, J.S. Rosenfield & Co.—best known for their remodeling of the Brentwood Country Mart and the newest owner of the Trancas shopping center—dropped out of the bidding process. One of the principal partners, Dan Bercu, said, “We dropped out a long time ago. The city wanted way too much paperwork and renderings. We were not willing to spend time specing out before closing.

”Michael Koss, of Koss Financial, said he did not believe he was the top choice. “I was on the short list, but to the best of my knowledge, I’m not the person. I don’t know who has been selected,” he said.

A proposal came from Martin Landis, the CEO of Landis Management, a real estate advisor who oversees acquisitions, asset management and disposition of real estate projects.

Others who entered the fray include local Realtor Kristen Corri, who represents World Vest Land & Development, Patrick Saboorian of Saboorian & Associates, Robert K. Futterman and Associates, a New York-based real estate agency that primarily serves the New York City market, but has also extended its services into the LA-area, including a well-known commercial/retail space at Hollywood and Highland.

The municipality is seeking proposals for a master lease for a 39-year maximum term with a 15-year option on approximately 2.2 acres of commercial zoned property. The main building first floor is about 17,000 square feet with a mezzanine of approximately 5,000 square feet with accessory buildings comprising 5,000 square feet.

Some of the other basic proposal requirements besides the long term lease, according to the city, are triple net lease, with the minimum anticipated lease amount of $850,000.

While most locals had hoped the site might be filled by another lumber or hardware store, most real estate experts indicated the debt service required of any renter precluded any one retailer, but would appeal to a real estate development firm that might want to rehab the buildings and bring in several tenants, in effect, creating a small shopping center.

The recent remarks made by Barovsky seem to indicate that is the direction city officials are now headed toward. Barovsky said she is holding out hope for a project that she would be proud of long after she leaves the council and one she could continue to benefit from as a consumer.

The city acquired the vacant lumber yard property when it purchased the building, two other commercial properties and the vacant land known as the Chili Cook-Off site. Municipal officials expect to use the rent obtained from the commercial properties including the lumber yard to pay off the debt incurred to acquire the land and buildings.

BY BILL KOENEKER

Gibson Advance Plea Deal Avoids Courtroom Media Frenzy

Mel Gibson concluded his latest bout with notoriety last Thursday, pleading no contest to a charge of drunken driving under a deal in which he’ll serve three years probation, pay fines of more than $1600 and participate in alcohol rehabilitation programs.

Gibson was stopped around 2:30 a.m. on July 28, while driving his 2006 Lexus LS on Pacific Coast Highway allegedly at a speed of over 87 mph—almost double the posted limit.

Allegations of what Gibson himself described as “belligerent behavior” toward the arresting officer and the making of “despicable” anti-Semitic remarks made headlines around the world leading to a classic celebrity scrum.

Compounding matters, unreleased information about what took place during the arrest was leaked to a celebrity-oriented website. This is now the subject of a separate official sheriff’s department investigation into possible violations of law.

Gibson’s lawyer, Blair Berk, arranged to move his court appearance up by more than a month, allowing Gibson to avoid another round of media frenzy. The actor-director was not required to appear in court in the misdemeanor case. This is the judge’s option.

The abrupt advancement of the case was announced to the news media by the district attorney’s office moments after prosecutor Gina Satriano was informed the deal she had worked on with Berk was approved by Malibu Superior Court Judge Lawrence Mira.

But representatives of the media who showed up at the courthouse found little in the way of sound bites and camera footage.

Court documents indicate that Gibson had signed the plea agreement and waived his right to a jury trial earlier last week but the paperwork was not filed until Thursday’s proceeding.

As part of the plea deal, the 50-year-old Gibson pleaded no contest to the misdemeanor charge of driving while having a blood-alcohol level of .08 percent or higher. A second misdemeanor count, driving under the influence of alcohol, and the infraction of driving with an open container of alcohol were dismissed.

A plea of no-contest, or nolo contendere, is not a formal admission of guilt but is equivalent to a guilty plea for sentencing purposes.

Prosecutor Gina Satriano told the Malibu Surfside News in a subsequent interview that “the disposition of the case was appropriate for the circumstances of a standard first-time DUI.”

Stressing she is “not one who says more than the public record,” Satriano indicated that the short notice to the media was not a case of “trying to hide the ball.”

She said Berk initiated the effort to advance the case from the start, but that the final determination on whether that would happen was up to the judge. She said that as soon as the local court clerk contacted all the parties, the DA’s office put out the word.

Satriano told The News that in addition to the three year’s probation, Gibson was ordered to participate in a year of Alcoholics Anonymous meetings on a schedule of five times a week for 4 1/2 months and three meetings a week for the next 7 1/2 months. Gibson was also ordered to complete a three-month alcohol education and counseling program for first offenders.

The veteran prosecutor, who has handled a number of high-profile, substance-abuse related cases, said Gibson’s own public admissions about his struggles with alcohol “could not be ignored” and were a factor in establishing the self-help aspects of the court’s orders, which are more stringent than usually applied to most first offenses.

Gibson’s driver license was also restricted for 90 days, according to the prosecutor.

Through his counsel, Gibson has volunteered to make a public-service announcement about the hazards of drinking and driving, but Mira did not make that a condition of his sentencing.

Satriano indicated that Gibson has already voluntarily begun a rehabilitation program.

He was ordered to appear in court Jan. 17 for a progress report.

BY ANNE SOBLE

Ferrari Driver Charges Split into Two Trials

Stefan Eriksson, a former race car driver who allegedly crashed a million-dollar-plus Enzo Ferrari on Pacific Coast Highway last February will receive two separate trials on charges he faces in the aftermath of the spectacular accident.

Superior Court Judge Craig Veals denied efforts to dismiss all charges against Eriksson last Friday but granted a motion to suppress, separating one of seven felony charges—gun possession by a convicted felon—and earmarking it for its own trial on the Constitutional issues involved. Eriksson, a Swedish national was convicted of counterfeiting in that country in the early 1990s.

After the hearings, Veals set a status conference for Wednesday, Sept. 13. He will assess the readiness of the defense team and try again to set trial dates. Meanwhile Eriksson, 44, remains in men’s central jail without bail, his plight compounded by a hold placed by the federal immigration agency.

The bulk of Eriksson’s legal troubles revolve around three felony counts each of embezzlement and grand theft filed under a California statute that allows the arrest and trial of individuals for crimes outside the state. Deputy District Attorney Tamara Hall is the prosecutor.

The charges are based on alleged violations of lease agreements on three exotic sports cars—the totaled Enzo, a second Enzo and a Mercedes MacLaren SLR—between Eriksson and two United Kingdom banking institutions.

The former executive with Gizmondo, a trouble-riddled European video game company, is charged with illegally bringing the three vehicles valued at close to $4 million into the United States without lessor permission.

His attorneys maintain that this is a “business” dispute, not a criminal endeavor, noting that no charges have been filed in the UK (other than breach of contract paperwork) and there has not been any effort to extradite Eriksson or issuance of an arrest warrant.

In addition, Eriksson faces two crash-related misdemeanor counts of driving under the influence and driving with a blood alcohol level of .08 percent or higher.

Eriksson’s defense team includes high-profile attorneys Jim Parkman, William White and Martin Adams of the Alabama office of the Cochran firm, fresh from a major defense victory on behalf of former HealthSouth CEO Richard Scrushy on three-dozen fraud and money-laundering charges.

The trio are eager to achieve the same success with their first California litigation.

In one of their first face-to-face interviews since taking the case, members of the national firm founded by the late Johnnie Cochran, met with the Malibu Surfside News after the hearing.

The team’s lead attorney, Jim Parkman, said the trio, who were brought on board after several changes of counsel, “are having a horrible time trying to meet with Eriksson.”

He said that Eriksson “is chained to the table” when they meet. “He can’t even move his hands. It is sad to talk to him.” He said Eriksson does not appear to be “doing well” after five months of incarceration.

Parkman said other attorneys see Eriksson in the halls and ask what crime he’s “in for.” When he says “‘auto theft,’ they seem puzzled and say their murder suspect clients aren’t kept as restrained,” adding that civil rights and due process issues will be raised.

Although Judge Veals denied the motions to dismiss all charges, Parkman says he agrees that “the trial will ultimately be based on facts, rather than theory.”

The veteran defense lawyer, whose booming Alabama drawl becomes increasingly animated as he discusses his client, says there are “so many rumors circulating about Eriksson in the world press. He’s been made bigger than life. So much of it is wrong. We will straighten things out.”

Parkman said the case will be a challenge because of its international elements. “We know we’re the underdog. It will take some good lawyering to stay on track.”

In addition to the legal merits of the case, Parkman said, “I like the guy. I just don’t have an answer when he asks why he is in chains.”

BY ANNE SOBLE