Two State Commission Staffs Split on Cabrillo Port

• Coastal Commission Report Is a Resounding No—But State Lands Commission Endorses It

BY HANS LAETZ

The staffs of two separate state commissions issued contradictory recommendations on the application by BHP Billiton to build a liquefied natural gas terminal near Malibu. And although the reports are advisory, coastal advocate lawyers said that taken as a whole they appear to be bad news for the offshore terminal.

The California Coastal Commission staff recommended that Cabrillo Port be rejected by that agency, because it would increase smog beyond allowable limits, intrude on a highly scenic area in an unacceptable way, and kill too many fish and whales.

But the staff report from the State Lands Commission, also released Friday, recommends that the agency approve the license for the company to pay the state $155,000 rent per year to connect its offshore terminal across a state-owned beach near Oxnard and into the state’s energy grid.

The State Lands Commission staff also recommends that BHP Billiton obtain a $1.3 billion liability insurance policy in case the plant, 13.8 miles off the Malibu coast, would cause that much damage.

“Our staff has evaluated both the Environmental Impact Report and the project itself,” said Lands Commission executive officer Paul Thayer. “And we have concluded that the project can be built under the public trust doctrine, to benefit the people of California.”

Thayer said the endorsement comes in weighing the public interest in building the energy terminal over the 20 negative environmental issues that cannot be mitigated if Cabrillo Port is built.

Thayer said the Lands Commission is not charged with enforcing anti-smog or coastal protection laws, and therefore did not consider the same set of facts and laws that the Coastal Commission and smog authorities are grappling with.

Although the Lands Commission staff echoed its recommendations from the voluminous Impact Report, which it wrote over the last three years, the Coastal Commission’s staff ripped into the Cabrillo Port concept.

CCC staff recommends the coastal panel reject the LNG ships as incompatible with the state’s coastal protection plan because they would cause smog and mar the “highly scenic qualities of this coastal area (that) are among the most valued in the state and constitute a major attraction for visitors to the beaches and surrounding areas.”

In its 186-page report, Coastal staff accuse BHP Billiton of proposing a project that could, if the company desired, avoid illegally polluting the air. “The Commission believes that the public welfare benefits of the Cabrillo Port project are outweighed by the failure of the project to meet Clean Air Act requirements,” the staff said.

The report said the Commission’s objection to Cabrillo Port would not adversely affect the public welfare because a better, cleaner plant could be built elsewhere. “The Commission further believes that this, or another LNG terminal should be able to both supply California with natural gas and meet relevant Clean Air Act requirements.”

The Coastal Commission staff said BHP Billiton would not use the required best-available anti-smog technology, would not properly offset hundreds of tons of new air pollution, and would emit so much greenhouse gas that the one project alone would increase sea levels on the California coast.

The CCC report said the total impact of compressing natural gas in Australia, shipping LNG cargoes across the Pacific, and then burning gas to heat up the fluid at Cabrillo Port would add 26.4 million tons per year of greenhouse gas to the globe’s atmosphere.

Coastal staff said Cabrillo Port’s impact on the surrounding environment would be incompatible with state coastal law in 14 major areas. The CCC report said BHP Billiton is mitigating some of the 14 negative impacts, but cannot possibly comply with state coastal laws related to air quality, oil spill prevention and response, earthquake and tsunami hazards, and the visual impact on the spectacular coastal views between Malibu and Oxnard.

Among other findings, the Coastal Commission staff report said Cabrillo Port would:
• emit air pollutants in excess of federal and local thresholds established to protect public health and welfare;
• produce greenhouse gases at levels that would result in adverse effects to coastal resources in the form of sea level rise, ocean warming, increased erosion, habitat displacement, and others;
• create underwater noise at levels that would affect marine mammals;
• put large marine mammals at risk due to entanglement and strikes from vessels and equipment;
• alter three billion gallons of seawater per year, which would kill fish eggs, larvae, and other organisms;
• increase lighting at levels that can reasonably be expected to affect seabirds;
• place pipelines and permanent anchors on the seafloor that would disturb ocean-floor habitat;
• discharge liquid wastes that could adversely affect water quality;
• impose health and safety risks associated with storing and transporting natural gas;
• harm sensitive species with construction activities in or near their habitat;
• close commercial fishing grounds, entangle fishing gear and interfere with commercial fishing activities in port;
• accidentally spill or release natural gas, fuel, other petroleum products, and other hazardous substances;
• present safety issues because it would be located in areas subject to seismic hazards, including ground shaking, fault rupture, liquefaction, failure of subsea slopes, and tsunamis; and
• negatively impact views because of its location and nighttime lighting along several miles of the California coast.

The State Lands Commission report also addresses the same failings, but said they are not so significant as to preclude leasing the land to BHP Billiton for at least 40 years.

“But remember, we have no authority under the Coastal Act to enforce the coastal protection laws, or under the Clean Air Act to enforce the smog laws,” said Thayer. “Our recommendation should in no way be taken to be at odds with the Coastal Commission staff – each of us is looking at this project through a different set of requirements.”

Thayer said the state is prohibited by a U.S. Supreme Court decision from charging BHP Billiton a share of what the company will earn from the project – estimated in some Australian newspapers to be $50 billion over the life of the project.

“We can only charge a fair market value for the land itself, and our team of assayers and consultants believe that to be $155,000 for the first year,” he said.

Coastal advocates were ecstatic about the Coastal Commission findings, but irate about the State Lands Commission. Susan Jordan, executive director of the California Coastal Protection Network, called the Lands Commission report a “deeply flawed and incomplete report that distorts the true impacts of the proposed BHP Billiton LNG terminal complex.”

Jordan said the lands commission staff “ignore many of the serious health and safety concerns about this massive terminal and storage facility that would be constructed just off the Southern California coast.”

She said it was “shocking that the [SLC] staff would omit the critical findings of the commission’s own Final Environmental Impact Report, released less than a month ago.” Repeated requests for comment or response to the issues raised in the reports went unanswered by BHP Billiton offices in Ventura, Oxnard and Houston. The company, however, sent out a press release Monday saying that the Ventura Chamber of Commerce again endorsed the project’s approval.

Under a bizarre and confusing set of federal and state laws, the first of several hearings this month took place Wednesday in Oxnard, when federal officials took evidence about the proposed federal license for the plant. The federal decision will be released within 90 days in Washington.

(Although that hearing occurred while this newspaper was being printed, an updated account of it will be posted Thursday at www.malibusurfsidenews.com)

Next Monday, the State Lands Commission will take testimony and vote on the project’s state license application, also in Oxnard. If this three-member panel votes “no,” the project is dead, and its rejection is final.

But if State Lands approves it, then Cabrillo Port goes before the Coastal Commission three days later, on April 12 in Santa Barbara. Coastal will review the staff report issued last week, take testimony and then decide whether the BHP Billiton application complies with the California Coastal Management Plan.

If Coastal follows its staff recommendation, and rejects the project, that means the federal Maritime Administration cannot issue a permit for the $800 million project. But there’s a catch: under federal law, the U.S. Commerce Secretary can overrule the California Coastal Commission by finding it a matter of national interest.

In addition, Gov. Arnold Schwarzenegger can veto the project, but he has no power to override a negative decision from the SLC or CCC.

On top of everything else, the Environmental Protection Agency still has to decide on a controversial exemption that BHP Billiton seeks from the U.S. Clean Air Act. Company officials, EPA staff and the White House are the subjects of Congressional probes into possible subversion of the nation’s clean air laws due to pressure from the White House to approve Cabrillo Port.