File Closed on Cabrillo Port: Governor Sounds Death Knell

• Veto Sends Strong Environmental Message to Future Energy Projects in the State

BY HANS LAETZ

Local ocean advocates said they have started planning “a really big party” after Gov. Arnold Schwarzenegger nailed the coffin shut on a proposed $1 billion liquefied natural gas terminal off the Malibu coast Friday.

The governor’s veto ends a contentious four-year battle over what would have been the largest floating industrial facility along the California coast, a controversy that brought Malibu celebrities, including Pierce Brosnan, out to campaign against the project proposed by Australian mining giant BHP Billiton.

Early this week, the Environmental Protection Agency said it was halting its effort to determine if BHP’s Cabrillo Port LNG terminal could get an exemption from federal and state smog rules. “Our recommendation has become moot,” an EPA official concluded, as EPA closed the file on Cabrillo Port.

And, perhaps not coincidentally, a competing firm that wants to unload LNG near Oxnard promised last week to “voluntarily” meet the same Ventura County smog laws that BHP said were impossible. That announcement from Northern Star was quietly floated three days before the governor had to make his decision on BHP’s Cabrillo Port.

And reaction to that veto from Malibu to Sacramento to Texas went along predictable lines, with coastal advocates left jubilant.

“Three years ago, this looked like a done deal, and that ship was a sure thing to be anchored off the coast of Malibu,” said Malibu City Councilmember Andy Stern who was out front in opposition to the project.

Shirley Godwin, an Oxnard organizer who worked for four years against the project, said, “The legal team and technical experts from the California Coastal Protection Network and the Environmental Defense Center did outstanding work.

“Our elected officials spoke out, investigative reporters provided us with important information,” Godwin said. “Numerous organizations from throughout the west coast gave their support. The residents studied the issues and wrote letters, walked neighborhoods, made phone calls, and attended many, many meetings.”

In Australia, a disappointed Resources Minister Ian Macfarlane said that “not being successful simply means we have more gas to sell in other markets, probably at a higher price.”

He told the Australian Broadcasting Company, “This decision means Australian LNG exporters are able to pursue markets in Asia and India and in the Asia Pacific rim,” he said.

“We’re thrilled, we’re ecstatic,” said Susan Jordan, director of the California Coastal Protection Network.

“We respect, but are disappointed by the governor’s decision to disapprove Cabrillo Port,” said Patrick Cassidy, BHP’s communications director, from his Houston office. He said it was too early to say what would happen to the handful of employees at the company’s Oxnard office.

The proposed facility, a floating aircraft-carrier-sized ship that was to be anchored 13.8 miles off Leo Carrillo State Beach, was effectively stalled in April by two independent state agencies. The governor’s action Friday formally ended the application process and eliminated any and all possibility of court review, no matter how unlikely it is that a judicial challenge could have succeeded, opponents said.

Schwarzenegger had voiced early support for the Cabrillo Port plan, and Stern said his decision was dramatic. “He obviously listened and respected the opinions of the people along the coast,” Stern said.

“BHP always marketed this as an Oxnard project, and didn’t ever mention that it was closer to Malibu,” said CCPN’s Jordan. “I want to single out the efforts of Pierce and Keely Brosnan for really bringing this to the fore.”

The actor and his wife, an environmental journalist, helped organize a “paddle-out” at the Malibu Pier last fall that attracted hundreds of Malibu residents and worldwide news attention to the LNG battle.

In his veto message, the governor voiced support for the concept of LNG imports into the state. “But any LNG import facility must meet the strict environmental standards California demands to continue to improve our air quality, protect our coast, and preserve our marine environment,” he wrote.

“The Cabrillo Port LNG project, as designed, fails to meet that test,” Schwarzenegger concluded.

Last April, the California State Lands Commission held that Cabrillo Port would add more than 250 metric tons of greenhouse gas per year to the world’s atmosphere, if the state counted the worldwide emissions caused by compressing natural gas off the Australia coast and shipping it across the Pacific.

“There has been a great change in the Administration’s attitude towards LNG,” said Jordan. “For the first time, we hear him talking about worldwide greenhouse gas emissions caused by LNG imports.”

Jordan said her group does not necessarily oppose LNG imports, but has not been shown any need for a foreign fuel that some industry analysts say is both more expensive and more polluting than domestic natural gas supplies.

Santa Barbara environmental attorney Linda Krop said, “Both the commissions and the governor realized that LNG is not a clean fuel and is not a bridge fuel to help us until we come up with clean technologies.”

Cassidy said it was too early to say if BHP would come back with a redesigned LNG terminal for the lucrative California natural gas market. The company might have made $50 billion over the next 40 years if it had won the race to be the first LNG terminal in California waters, Australian government officials had said.

More than 40 LNG import terminals are being proposed around the nation, but given their great expense, federal officials doubt that more than a few will be built. BHP’s project was the only California LNG terminal to complete the regulatory process, although the Sempra Corporation is about 75 percent complete building an LNG terminal for the California market in Ensenada, Baja California.

BHP is partner with Woodside, another natural gas company, in several Australian gas fields, and Woodside is about to file its application to construct two LNG unloading buoys at a site midway between Malibu and Catalina Island. Cassidy said BHP and Woodside are also jointly involved in many projects around the globe, but it is too early to say if some sort of joint BHP-Woodside LNG terminal here is in the works.

Industry analysts note that BHP’s gas fields off Australia are far offshore, and that Woodside might have to level an endangered coral reef to build its Australian LNG gasification shipment harbor.

Two other firms are also planning to ask permission to unload LNG offshore, one at an oil-drilling platform in the ocean near Oxnard, and the other near some existing offshore oil rigs off Huntington Beach.

In Sacramento, a spokesman for the California Manufacturers and Technology Association said he was pleased the governor came down in favor of LNG imports in general.

“We appreciate that the governor agrees that we need LNG as a part of our energy portfolio,” said Gino DiCaro, the group’s spokesperson. “While we are disappointed he did not approve this project, we are confident that LNG is a safe and clean alternative.”