Clock Stops on NorthernStar Plan to Convert Aging Oil Rig Northwest of Malibu into LNG Facility

• U.S. Coast Guard Raises Hundreds of Safety and Environmental Issues that Must Be Addressed

BY HANS LAETZ

A proposal for a liquefied natural gas terminal on a converted offshore oil rig off Ventura County has prompted nearly 400 questions from the U.S. Coast Guard, a “data gap” that could delay the project for months or years.

The Malibu Surfside News has learned that Coast Guard officials have questions about the proposed NorthernStar LNG terminal that go to the very heart of the proposal’s safety and operations plans, as well as whether it is even needed in the first place.

The Coast Guard has sent the company a list of 396 questions it needs answered before it can process the environmental study, and then decide on a license request, for the project called Clearwater Port. Similar questions cost BHP Billiton a three-year delay on its Cabrillo Port request, and that company’s inability to fully address its data gap list of just 120 questions was one of the reasons its proposed LNG terminal off Malibu was shot down last April.

In a letter obtained by The News, hundreds of questions were raised by the Coast Guard about safety aspects of the NorthernStar proposed project, ranging from how the LNG terminal would handle earthquakes, subsea landslides and high waves, to how the LNG ships would avoid killing whales.

The company had said it expected some questions to arise, and its officials said they expected the fast-track federal licensing “clock” to be stopped at some point. But the breadth and scope of the list of unanswered questions seemed quite broad even to LNG opponents, such as Susan Jordan of the California Coastal Protection Network.

“I’m stunned,” Jordan said when told of the list. She and other coastal activists have yet to see the letter’s details.

Kira Redmond, spokesperson for the Santa Barbara Channelkeeper, said the “long-term and potentially devastating impacts” of the proposal makes her group “gratified the Coast Guard has taken our concerns and others seriously, and stopped the clock to gather additional information.”

The SBC, an environmental group that champions environmental issues in the Channel Islands area, announced that it has hired the Environmental Defense Center, which played a major part in the defeat of Cabrillo Port, to employ scientists and environmental lawyers to oppose the project.

NorthernStar proposes to take out oil wells on the offshore rig and use the platform to warm up LNG that would be unloaded at two new floating docks it would build in 320 feet of water about 10 miles off Ventura. The oil rig’s wells would be taken out of production, abandoning about 2 million barrels of recoverable oil in the ground beneath it—one of the issues the Coast Guard wants NorthernStar to address.

As reported in The News three weeks ago, federal law prohibits taking an offshore oil platform out of production if petroleum can still profitably be recovered. With oil prices ratcheting up above $90 a barrel, the small oil company that currently owns the rig has resumed drilling for oil on the platform, known as Platform Grace, that NorthernStar wants to turn into an LNG regasification site.

The federal letter is a laundry list of concerns, most of them about the safety of the plan. The list notes that NorthernStar’s data about freighter traffic in the local area, one of the busiest sea lanes in the world, is more than five years old and out of date. It also notes that NorthernStar mistakenly said ships in the nearby coastal lanes are under Coast Guard traffic control, when they are not.

Some of the Coast Guard questions go to the very concept of locating an LNG terminal at a place where ships could drag their anchors across existing seafloor pipelines that carry crude oil from several platforms to refineries onshore. And it says the anchoring systems for floating docks in the high seas, with cables bolted to the ocean floor amidst crude oil and natural gas pipelines, need further explanations.

The federal letter asks why NorthernStar has not addressed two active earthquake faults reported in a 2007 geologic study, even though the federal government asked NorthernStar about them last February.

The Coast Guard letter notes that “the application lacks a list or map describing land uses along the proposed and alternative project locations, and information about sensitive land uses and their locations, particularly churches, schools, hospitals, day-care centers, etc.” Because the project proposes high-pressure gas pipelines through Oxnard neighborhoods, the government wants to know precisely how many structures would be in the hazard zone.

NorthernStar’s project manager, Billy Owens, said the questions “do not go to the soundness, but to the necessary detail to ensure that one understands the environmental protections that we will build into the plant.”

Owens said many of the posed questions are answered in other parts of the 3141-page application filed by the company last summer. Others, however, he said might take months of additional research, testing and study to answer.

Item 400, for example, asks the company to “demonstrate the need for natural gas (particularly LNG) as an energy source, providing information on the supply of, and demand for natural gas in California.” The Coast Guard asks NorthernStar to show why the new Costa Azul import terminal near Tijuana, with a capacity equal to one-tenth of the total demand on the west coast of North America, can’t handle import needs.

“That will probably be the biggest piece of work we have to do,” Owens said. “That is a critical task item that everyone is yelling about.”

Opponents of the project say the severe environmental impacts of the proposed oil rig conversion outweigh the benefits for what could become an expensive, underused competitor to the Baja LNG terminal, owned by the San Diego natural gas trading firm Sempra, parent company of the Southern California Gas Company.

The Coast Guard also wants to know how NorthernStar computed potential fog banks that might be generated by the operation of the ambient air vaporizers, which will act like huge refrigerator coils in moist marine air.

“We are hardly going to see any fog out there from this project,” Owens said. In perfectly still air, he said water vapor would cascade off the platform and form a circle of fog 6-8 feet above the water and 65-70 feet in diameter.

“We’re not going to enshroud the platform and the carriers in fog,” he vowed.

Among other questions, the Coast Guard wants to know:
• what the converted oil rig will look like to persons on nearby boats and on the shore,
• how tall the facility will be,
• how much smog will be generated, and how that was calculated.
• why this oil rig was picked, and why the project wouldn’t be better in another location,
• whether the high-pressure gas pipelines can withstand underwater landslides and river-flood rocks sweeping down from the nearby mouth of the Santa Clara River,
• what the effect of supercold water on plankton and other creatures will be, a subject brought up but not addressed in earlier letters,
• what the emergency response plan for pipeline leaks on shore will be,
• why no substantive risk assessment discussion for the onshore pipeline was provided,
• why there is no discussion of potential safety hazards for introducing the imported gas directly into the existing natural gas system,
• why the application does not address the impact on tourism, and
• what the historical wave heights at the site are.

Owens said it could be two-to-three weeks before the company “gets a handle on just how deep they want us to go on all this.”

The NorthernStar proposal, 35 miles northwest of Malibu, is one of two LNG terminals proposed for the local area. A second, proposed by Woodside Natural Gas for 21.8 miles offshore Point Dume, is proceeding through the regulatory process several weeks behind the NorthernStar plan.