BHP Rejects Conclusion that Cabrillo Port Is Dead

• Governor Says He Will Rule on Controversial LNG Facility That Was Denied Key Permits

BY HANS LAETZ

The week after BHP Billiton lost its request to build its Cabrillo Port liquefied natural gas terminal off Malibu, the company still says it does not know what it will do. But a company spokesperson rejects any conclusion that the project is dead.

The State Lands Commission’s last week vote left the ship without a place to anchor, with no pipeline route ashore, and without the required approval for the environmental package that took four years to put together, noted activist Susan Jordan.

That vote was followed last Thursday by the California Coastal Commission, which voted 12-0 that the factory ship should be denied permission to violate California and federal green laws in more than 20 ways.

The twin decisions set the Australian company adrift in a sea of confusion over the offshore LNG facility’s future.

“Is this dead? I think it is mortally wounded,” said Jordan, executive director of the California Coastal Protection Network.

After the initial rejection Monday, BHP Billiton went into the California Coastal Commission meeting Thursday and placed a high stakes bet: company officials sat silently and refused to present their case that the proposed $1 billion LNG ship would be good for California.

Billiton had gone into the meeting in Santa Barbara desperately trying to win a delay. CCC Executive Director Peter Douglas said federal law does not allow anyone to delay the hearing for any reason, and the only way BHP Billiton could have stopped proceedings was to withdraw, scrapping four years and tens of millions of dollars in work.

“We realize this puts the commission in an embarrassing position, but that is the path they chose,” Douglas said.

BHP LNG International President Renee Klimczak sat in the audience for most of the eight-hour session, and refused repeated offers from the commission to testify or rebut what was said by the 40 persons who spoke against the project. Not one person testified in its favor.

The company’s silence did not go over well with several commission members, and the bet was lost. “It’s annoying that we put our staff through this and then the applicant chose not to respond at the hearing,” said Mary Shallenberger before she voted against it.

Another commissioner said the company’s silence “points to a certain tendency on behalf of BHP to provide less information rather than more.” Ben Hueso said, “If BHP wants to do business in the United States, they need to learn to provide more information and act responsibly. We feel very protective of our coastline.”

A convoluted and confusing federal law requires BHP to win both a federal and a state permit for the project. The Coastal Commission vote scuttles the federal permit, but Billiton can appeal that decision to Washington, where the U.S. Secretary of Commerce can overturn it.

The state permit, meanwhile, must be acted upon even though the Lands Commission earlier last week rejected its environmental studies and lease application. That means Gov. Arnold Schwarzenegger must make a public decision about Cabrillo Port by May 21, even though the company does not have its mandatory environmental study, or permission to park the ship and lay pipes.

Lawyers outside the process said state agencies have wide power to reject environmental impact reports and lease applications for any reason. The unlikelihood of a lawsuit overturning the State Lands Commission vote makes the project effectively dead in the eyes of some observers.

Billiton company spokesperson Patrick Cassidy said to a reporter who posed that conclusion last week, “We still are digesting the comments made Monday and today, and it’s way too early for us to speculate on what steps we can take.” He appeared to be reading a statement written before the vote was taken.

Cassidy and other company officials would not say if a lawsuit would be filed, or speculate on the possible grounds on which a suit might be based.

The governor was in Washington last week, and, in a news conference there, backed away from his earlier support of LNG as a greenhouse gas reducing bridge fuel.

“The governor needs to step in here with a clear message,” CCPN’s Jordan said, “and veto Cabrillo Port now.”

At the Santa Barbara meeting, the City of Malibu was represented by Councilmembers Pamela Conley Ulich and Andy Stern. Conley Ulich blasted BHP Billiton officials for trying to delay the matter and asked, “Where are they speaking…behind closed doors?” She said, “I’d like to hear from them here at this meeting, in public, and [have them] explain to us just what exactly it is they intend to do now.”

Stern concentrated on the lack of solid evidence that more natural gas is needed in California, or that prices would drop if Cabrillo Port were to be built.

Malibu actor Pierce Brosnan sat through four hours of testimony before he spoke. The actor used his two minutes to again call on Schwarzenegger to reject Cabrillo Port in the spirit of his environmentalist credentials. “I know our governor has worked hard to reduce global greenhouse gases, and to sign AB 32,” Brosnan said.

“I would like to note that the Terminator may be doing his job globally, but Agent 007 is doing it locally,” quipped Commissioner Khatchik Achadjian.

Remy O’Neill, representing the Malibu Township Council, said the U.S. is behind developing countries on some environmental issues and cannot afford to add greenhouse gas to the globe. “We are even behind China in our vehicle emissions standards. For people at these hearings, air pollution mitigation doesn’t mean let’s make a deal. It means don’t add more pollution.”

Ironically, CCC executive director Peter Douglas revealed early in the meeting that he and BHP officials may have been close to solving a major smog problem that helped derail Cabrillo Port at the Lands Commission: the tremendous amount of greenhouse gas that the project would generate in the extraction, liquefaction, transport and reheating of natural gas.

One scientific expert at last Thursday’s hearing estimated the project would emit an amount equal to 40 percent of the greenhouse gas now being emitted by the people and businesses of New York City.

But Douglas said BHP Billiton and the state had been near agreement on converting the entire trans-Pacific LNG fleet to complete natural gas operations.

“We did talk to BHP about running their tankers on natural gas [exclusively], and I thought they had agreed to do that,” Douglas said. “But given the turn of events in the last couple of days, we never got back to that issue.”