Two New LNG Proposals Kick Off Permit Process

• Local Enviros Closely Watch Applications by Firms that Hope to Avoid Cabrillo Port’s Fate

BY HANS LAETZ

Less than three months after Malibu and Oxnard residents beat back a proposed liquefied natural gas terminal, applications for `two new LNG receiving stations not far from Malibu are being readied for accelerated government review beginning this summer.

And in Sacramento, anti-LNG activists are frantically lining up environmental groups to support a bill inspired by the Malibu LNG controversy that would establish a study to determine if California even needs what some call expensive, polluting floating factories.

Last week, the California State Lands Commission said it has accepted the technical data submitted by NorthernStar Natural Gas to convert an unused oil drilling platform 12.6 miles off the Oxnard coast into a facility to accept LNG from two ships at a time, convert the LNG into natural gas, and pipe it ashore.

The project, being marketed as Clearwater Port, now needs its application to be accepted by the U.S. Maritime Administration and the Coast Guard. When that is done, a 330-day clock begins ticking for federal and state officials and members of the general public to weigh in on the complex mechanical operation that is proposed.

Closer to Malibu, Woodside Natural Gas is finishing the final details on its OceanWay LNG terminal proposed for a location 22 miles south of Point Dume, about halfway to Santa Catalina Island. Its application will go to the City of Los Angeles and the two federal agencies sometime this fall, starting its own 330-day clock.

Both projects are being considered independently, and the prospect of competing LNG terminals off the coast has California Coastal Protection Network director Susan Jordan working the halls of Sacramento this week. She and other coastal advocates want to slow down the process, and see if California actually needs these industrial facilities.

“The issue of determining need is critical to approving an LNG terminal in California, [because] LNG terminals, by their very nature, pose significant public health and safety impacts,” she said.

Jordan is working to gain passage of a bill authored by state Sen. Joe Simitian, D-Palo Alto, that would set up a process to determine if environmental protections can be overridden to approve LNG projects based on their benefit outweighing their negative impacts.

Jordan said LNG is only a benefit if it is needed, and “it was on the basis of insufficient proof of need that Lt. Gov. John Garamendi indicated he could not approve the BHP Billiton LNG Terminal proposal.”

The long shadow of BHP Billiton’s Cabrillo Port failure hangs over the two new LNG terminals. Both companies say they are trying to pick up the pieces left after state agencies rejected BHP Billiton’s pleas for permits on the Malibu coast, and after Long Beach rejected an LNG plan from a subsidiary of Mitsubishi.

BHP Billiton’s Cabrillo Port project was rejected by the state coastal and lands commissions and the governor. The company was roundly criticized for lavishing millions on lobbying and hiring cronies of Gov. Arnold Schwarzenegger to campaign for a Malibu LNG terminal that had major technical and environmental shortcomings.

Officials at Woodside last week revealed new details about the project south of Point Dume, which would include a pair of submerged buoys hoisted up underneath two specially constructed LNG transfer ships.

These transfer ships, under Woodside’s new plan, would meet trans-Pacific LNG carriers more than 100 miles southwest of Malibu, and transfer entire cargoes of LNG onto the transfer ships while the two ships are lashed to each other on the high seas.

The transfer ships would then steam to Santa Monica Bay, where they would hoist up a buoy, begin regasifying the LNG using onboard equipment, and pump the resulting natural gas ashore at Los Angeles International Airport.

In a key departure from the BHP Billiton plan, the Woodside LNG terminal would be further offshore, would not include a permanently-anchored factory ship the size of an aircraft carrier, and would mostly use outside air to warm up the LNG, reducing smog emissions by up to 90 percent compared to BHP Billiton’s plan, Woodside officials said.

Woodside’s project goes before federal and Los Angeles city officials this fall. The State Lands Commission is not involved because Los Angeles owns the seafloor within three miles of the city, and issues related permits.

New details were also announced this week for the Oxnard oil-rig-turned-LNG terminal. NorthernStar now plans to anchor up to two LNG carriers at a time next to a former oil drilling platform now used only as a subsea crude oil pipeline control point.

NorthernStar plans to construct two “soft-mooring” floating docks about 600 feet away from the platform, and use giant, insulated, flexible hoses to bring the supercold LNG up to the old oil rig.

Ambient air would be used to warm up most of the gas, similar to the Woodside proposal.

Officials at both companies stress that the BHP Billiton failure is frontmost in their minds as they prepare for public hearings for their permits.

“We’re trying to squeeze every inch of our project to make a smaller environmental footprint,” said Rob Male, vice president for Woodside’s proposed project in the waters off Point Dume. “We’re building this so it’s cleaner in air emissions than any other LNG plant in the world, and we’re going to export this California technology to all of our LNG operations all around the world.”

NorthernStar’s Oxnard project manager also cited BHP Billiton’s mistakes.

“It appears BHP tried the Sacramento approach, and we’re going to be different,” said vice president Billy Owens. “We’re trying to do outreach locally, and really listen to the people who live and breathe here.”

But Owens said he’s not sure what the company will do if its outreach finds a core of people unhappy with an offshore oil rig that was supposed to be torn down at the end of its oil lifecycle being turned into an LNG terminal.

“Yes, we expect to hear those kind of remarks,” the NorthernStar spokesperson said. “We’re listening a lot but we don’t have a pat answer to those kind of questions. We have to ask those people if they are willing to live in a world with less and less energy.”

However, coastal advocates like Jordan say that’s a false choice. She said energy independence and avoiding new foreign sources of fossil fuel make LNG a questionable proposition at best.