Publisher’s Notebook:

Getting It Right—SB 412 and LNG Terminals

BY ANNE SOBLE

The strategy didn’t work last year. California Senate Bill 426 was allowed to die a merciless death, which may say a lot about the kind of backroom dealing that goes on in Sacramento. Some of the more visible anti-Cabrillo Port critics weren’t ready to jump on the legislative bandwagon against liquefied natural gas. But that doesn’t mean that Senator Joe Simitian’s current effort that predates the California State Lands and California Coastal commissions’ actions on CP will get more respect this time around. On March 23, Simitian introduced a “spot bill” in the form of SB 412, which announced the intention of the Legislature to enact a law addressing the siting and construction of LNG facilities off California’s cost. As is the case with spot bills, specific provisions were added as the bill worked its way through the legislative process. But the clear message of the two agencies on Cabrillo Port may make a difference in the wording of the new bill, barring backroom manipulation and the political expediency that is contingent on what the governor is going to do by the conclusion of the 45-day deadline for his “decision” on CP. The first round of provisions, read amendments, were added last Thursday, April 16. It sends a clear signal that, if SB 412 becomes law as it is, the LNG industry is going to have to step up its already extensive lobbying efforts tenfold.

The linchpin of the proposal is that the State Energy Resources Conservation and Development Commission be mandated to “make a liquefied national gas needs assessment study that assesses demand and supply for natural gas and alternatives to natural gas to meet energy demands, and to determine the need for the state’s projected natural gas demand” that would be started no later than Jan. 1, 2008, and finished no later than Nov. 1, 2008. The study would be financed by fees from permit applications for LNG terminals. The bill would prohibit the commission from issuing a certificate to an applicant that does not update information to a matrix system at least once a month. The bill would require the governor to disapprove any application unless it meets all the requirements established by SB 412 (to be known as the LNG Terminal Evaluation Act). More public agencies would be drawn into the decision-making process, including the California Public Utilities Commission, the Coastal Commission, State Air Resources Board, State Water Resources Control Board and the Department of Fish and Game. Federal agencies with evaluative roles include the Office of Homeland Security, Federal Energy Regulatory Commission, the Department of Defense (and all of the Armed Services), as well as the U.S. Coast Guard. This sounds formidable because the process is supposed to be formidable. Whether Simitian’s colleagues are courageous enough to follow his lead is yet to be determined. Whether SB 412 will undergo major revision is the other key variable in the equation.