Cabrillo Port Dealt Major Blow by State Lands Commission

• It’s Watch and Wait After Panel Votes Two to One to Deny Subsea Pipelines for LNG Project

BY HANS LAETZ

With a highly-publicized defeat for Cabrillo Port still echoing along the California coast, BHP Billiton officials have not ruled out a lawsuit as they head into a second state hearing this week in Santa Barbara.

A company official said Tuesday they were still analyzing why the California State Lands Commission voted 2-1 against accepting the project’s environmental impact report and request to lease state tidelands to bring natural gas into California from overseas.

But California courts grant state agencies broad power to reject environmental impact reports, and environmental attorneys question how the company would overcome the finding by the commission that the liquefied natural gas terminal would violate federal and state environmental standards in 20 areas.

Any lawsuit filed by BHP Billiton would be a voyage into uncharted legal waters, lawyers said, as no offshore port applicant in U.S. history has ever been rejected by a local state and then filed suit.

Monday night’s vote appeared to be a significant victory for coastal advocates and environmentalists from Oxnard and Port Hueneme, the cities nearest the proposed LNG terminal. Oxnard police said 3000 protesters politely swarmed the Oxnard Performing Arts Center Monday afternoon, with about 800 at any given time squeezed inside the hearing room.

“This shows that the commission cares about far beyond the stars in Malibu, and that they were thinking globally,” said Malibu activist Keely Shaye-Brosnan.

“Let them sue,” said California Coastal Protection Network director Susan Jordan. “We knew all along, since 2004, that this project could not meet the Clean Air Act. The company knew that too, and they should have adjusted.”

Commission chair John Garamendi, the state’s lieutenant governor, and John Chiang, the state controller, provided the two-vote majority, with a representative for Gov. Arnold Schwarzenegger’s appointee casting the lone affirmative ballot.

Anne Sheehan, the deputy director of finance, representing DOF Director Michael Genest, said Cabrillo Port would bring California a necessary “bridge fuel” as it weans itself from coal and oil-fired energy sources. But the other two panelists, both Democrats, pointed out that the project will not come on line until 2012 at the earliest.

“This project does not fulfill an immediate need,” Garamendi said at the end of a grueling 12-hour public hearing that allowed more than 130 people to testify.

Garamendi said the project’s environmental studies proposed 18 alternatives, “and rejected every one of those 18 alternatives out of hand without considering them.”

It was the project’s air pollution impact that troubled Garamendi and Chiang the most. “This isn’t going to clean the air in the immediate area of the project,” Chiang said.

“I also have serious reservations about locating an LNG plant along our beautiful California coast,” he said. “There are also clear threats to marine life and human safety.”

The vote was greeted by polite whoops and hollers from the crowd of 800 people in the Oxnard Performing Arts Center, a crowd that had been warned several times by Garamendi not to applaud or make comments—at the threat of expulsion.

The hearing was punctuated by a large late-afternoon rally outside the Oxnard Performing Arts Center, where Oxnard Police estimated 2000 persons listened to speeches outside the hall. Parking spaces within blocks of the Arts Center were taken, prompting some would-be participants to circle the area in their cars, honking horns.

At the end of the rally, a large number of participants tried to enter the hall, but most of the seats were already taken, and Garamendi sternly ordered the aisles cleared.

At one point in the evening, opponents of the project were asked to stand up and raise their hands: nearly every person in the 800-seat auditorium quietly rose to their feet.

Garamendi then asked them to sit down, and for project backers to stand up. Seven people were counted.

Most of the testimony plowed familiar ground. Christine Rodgerson, president of the Malibu Association of Realtors, told the commissioners, “I am concerned that this project has a negative impact on property values.” She said, “One of the main reasons why people move to Malibu is for the clean air.”

John Mazza, representing the Malibu Township Council, said the BHP Billiton project “has gathered the most interest since a company tried to put a nuclear power plant in an earthquake zone in Malibu—and that was 37 years ago.”

The hearing lasted 12 hours, and a rough tally showed 16 speakers favoring the terminal, and 111 opposed.

Project supporters said the project would bring a badly needed, clean burning fuel that can replace coal-fired electricity in the state’s grid. “We need to find some other source for this energy, and if not from this project, where?” asked Will Reed, spokesman for the Hispanic Chamber of Commerce.

“I don’t think this is about environmental issues, and I don’t think this is about fish,” said Donna Worley, a Burbank resident. “I think this is about of rich people down in Malibu who don’t want to see this thing in their ocean views, and these people have spent a lot of money to scare you to death.”

But the bad news started early for Cabrillo Port. Garamendi started the hearing with a series of blistering questions to the State Lands Commission staff and Billiton’s attorney-lobbyist Craig Meyer.

In a rapid-fire set of terse questions, Garamendi asked if the project’s impact report included greenhouse gas emissions for the entire trans-Pacific supply chain, estimated by one scientist at 66 times greater than the amount of emissions at the unloading terminal alone.

“Those emissions are not within this project, because if the gas were not to come here, it would be going to somewhere else,” the company’s attorney said.

A skeptical Garamendi interrupted: “Then we are not to be concerned about the greenhouse gas issue?”

Garamendi and Chiang also peppered Lands Commission staff with questions about the report’s reliance on four-year-old data on the state’s natural gas needs, and said the foundation for the needs assessment is faulty.

Commissioners also said they were unhappy with BHP Billiton’s effort to mitigate the emissions of nitrogen pollution by rebuilding the engines of a pair of tugboats plying the waters between San Pedro and San Francisco.

Garamendi noted that the contract for the tugboats lasts 15 years, and the project will be releasing hundreds of tons of smog upwind of Malibu and Ventura County for 40 years or more.

Garamendi also criticized the company for saying in its application it had plans to sell the natural gas in California, when the company’s spokesman said it would be shipped through California to “points beyond.”

“Is that in the EIR?” Garamendi asked. “It’s not, but it seems to be an important point. How much gas is to be imported through Mexico? The EIR does not say that either.”

BHPB LNG International President Renee Klimczak ended the marathon public hearing with a reminder of the company’s main contention that “without natural gas you will not be able to replace coal for electric generation, and natural gas is a very efficient fuel for vehicles.”

The commission’s executive director, Paul Thayer, told the commission there are negative impacts that cannot be mitigated in any way. “For example, the chance for a catastrophic event is fairly remote, but that is kind of like rabies—chances are low of getting that, but once you do, it is fairly drastic.”

Although Monday’s hearing may end up fatally derailing Cabrillo Port, state and federal laws require the application process for the $1 billion plant to continue to proceed on a parallel track. That means the California Coastal Commission will still hold its daylong hearing on Cabrillo Port Thursday in Santa Barbara.

And the governor still has about seven weeks left to make a decision as well. “I do believe that liquefied natural gas should be a part of California’s energy portfolio,” Schwarzenegger said in his statement after Monday’s vote.

“Natural gas is the cleanest-burning fossil fuel and an LNG facility to serve our state would make California less vulnerable to variations in supply and price. Despite the action taken today by the State Lands Commission, my office, pursuant to federal law, is using the allotted 45-day review period to make sure that the project meets strict standards of public and environmental safety,” the governor said.

The Coastal Commission hearing starts at 10 a.m. at Fess Parker’s Doubletree Resort, 633 E. Cabrillo St., Santa Barbara. It will be webcast live by the commission at: http://www.coastal. ca.gov/mtgcurr. html.