Long Beach LNG Bid Voted Down—Cabrillo Port Critics Buoyed

• But Others Wonder Whether This May Lead to Added Pressure on Behalf of Local Project

BY HANS LAETZ

A proposed liquefied natural gas terminal in the middle of Long Beach Harbor was killed by port officials Monday night, a widely anticipated action that might increase pressure on Gov. Arnold Schwarzenegger to approve the Malibu LNG terminal proposed by BHP Billiton.

The Long Beach action came the same day that the California Coastal Commission set the date and place for what may be the final government hearing for the proposed Cabrillo Port floating regasification terminal: April 12 in Santa Barbara.

Long Beach’s port commissioners said the project’s benefits to local residents, including $500 million in rent payments to the city over 40 years, were not worth the risk of pollution and possible catastrophic accident, with 140,000 residents living within three miles of the plant. The Long Beach LNG plant was one of five currently proposed for California, but was unusual in that local government had apparent veto power as landlord.

The decision came after Long Beach city attorney Robert Shannon said the LNG project’s environmental analysis “fails to provide necessary information to the public, most critically in the area of public safety and security, as legally required” by state environmental laws. Like the Cabrillo Port project, the Long Beach security analysis and terrorism threat assessments are secret and beyond public review, and Shannon said projects cannot be approved under state law without public disclosure.

The president of Sound Energy Solutions, the Mitsubishi subsidiary that spent millions of dollars proposing the Long Beach LNG project, said, “We are surprised by the action taken by the Harbor Commission and the Port of Long Beach. We just resumed negotiations last week with the city at the direction of the city manager,” said Thomas Giles.

“We are currently reviewing all of our options,” he added.

An industry lobbyist in Washington said SES “might sue Long Beach to try to reopen negotiations, or might put more money on the table. But it would be
premature to say that the apparent end of the Long Beach terminal puts more pressure on the state to approve any one of the other competing terminal proposals,” said Center for LNG spokesperson William Cooper.

In Sacramento, a spokesman for an industry group that has been campaigning for LNG terminals said he could not comment on any particular project. “But the need for LNG terminals in California is most important to increasing the natural gas supply in the state and lower energy costs,” said Gino diCaro of the California Manufacturers and Technology Association.

BHP Billiton spokesman Patrick Cassidy said, “We don’t have any comment on the Long Beach project at this time. LNG is a clean, economical and stable fuel that can advance California’s energy and environmental goals.”

Anti-LNG activists cheered the decision, and said they do not think it increases pressure on the governor to approve Malibu’s project. “If our state takes a hard look at our energy future, it will determine we don’t need LNG anywhere, and that includes Cabrillo Port, and Baja California,” said Rory Cox, an activist with Pacific Environment.

Susan Jordan, director of California Coastal Protection Network, said that Cabrillo Port, the only other project currently in advanced environmental review, could be killed at several points this year. “Then we will have a clean slate and can compare all the various proposals,” she said.

Neither California nor the federal government has competitive licensing, where various proposals would be compared against each other with the best ones winning. A proposal to do so in California died in the Legislature last year.

As for the Malibu LNG terminal hearings, Coastal Commission officials said that a location for the daylong April 12 session, which will probably attract extensive public testimony, was finally found in Santa Barbara.

The site had been moved up and down the central California coast several times when no facility could be located nearby, and some angry Malibu and Oxnard residents were upset at the prospect of traveling 170 miles up the coast to one of the proposed sites in San Luis Obispo.

On Monday morning the commission had almost moved the meeting to the Port of Los Angeles, but at the last minute was offered space in Santa Barbara, 55 miles from Malibu’s northern end, where the aircraft-carrier-sized ship would be located. “There was an incredible amount of effort to accommodate the concerns of the public in Malibu and Oxnard,” said commission spokesperson Sarah Christie in Sacramento.

In Santa Barbara, attorneys for the CCC and BHP Billiton are expected to square off over the commission’s jurisdiction over the project’s smog permits. The state claims it has the power to reject or approve the project license and smog permits issued by the Environmental Protection Agency, while BHP Billiton president Renee Klimczak contends that Coastal has limited jurisdiction.

Christie said public testimony would be accepted at the meeting, and the commission is expecting a huge crowd.

The April meeting could be preempted by a session of the California State Lands Commission sometime in March, likely to be held in Southern California. That little-known agency has licensing authority, in conjunction with two federal agencies, on the LNG project.

To top that off, EPA has indicated it might also reopen hearings on the project’s controversial air pollution permit as well.

The April 12 Coastal meeting will be at Fess Parker’s Doubletree Resort, 633 E. Cabrillo St., Santa Barbara.