Opponents Stay Mobilized One Year after BHP Defeat

• Strategy that Felled World’s Largest Miner Being Readied for Next Project in Queue

BY HANS LAETZ

Last week, two dozen people celebrated the one-year anniversary of the defeat of the proposed BHP Billion natural gas factory ship that—when it was first proposed five years ago—seemed a lead-pipe cinch to be anchored off the coast of Malibu in just a few years.
The activists gathered at the Oxnard Performing Arts Center, where plans for “Cabrillo Port” were scuttled after the State Lands Commission found the proposed LNG barge would have violated about two dozen sections of state and federal wildlife, air pollution, safety and ocean conservation laws.
In the year since then, the formal decision-making process for two other proposed liquefied natural gas terminals not far from Malibu has begun. Both projects would receive tankers full of icy-cold fossil fuel shipped from Qatar, Indonesia or Australia, and warm it up into the natural gas used for cooking and—increasingly—electrical generation.
A decision on the next floating LNG terminal, this one about halfway between Point Dume and Catalina Island, is expected after another lengthy battle that will probably end in two to three years, analysts said. That project, proposed by a subsidiary of the Australian firm Woodside, would be visible from Malibu’s higher elevations on clear days.
The other project, proposed for an oil-drilling platform 12 miles off Ventura by NorthernStar Natural Gas, would not be visible from Malibu. It also will get a Cabrillo-like environmental review in two to three years.
“I think opposition to both projects is way ahead of where we were at the start, because we learned of the [BHP] project when it was already almost approved,” said Susan Jordan, who led the fight against the Malibu terminal. “Of course, they have the advantage of coming in much earlier in the process than we did, and they have the ability to see how we fought BHP.”
Both companies, however, have said they also watched the BHP Billiton battle in Malibu, which culminated with celebrity-laden protests and an unprecedented Malibu-Oxnard joint effort that raised nearly $1 million to hire the Environmental Defense Center lawyers and scientists who found the evidence that Cabrillo Port was big trouble.
Woodside and NorthernStar promise not to make the same mistakes, and to meet the California air quality laws that BHP Billiton enlisted the White House to evade. The companies have also submitted proposals they say will avoid nearly all of the environmental objections to Cabrillo Port.
Environmentalists say those claims have yet to be analyzed by the federal and state government in the lengthy environmental impact report process, much less by the team of experts that found enough holes to sink Cabrillo Port.
Questions have already been raised about Woodside’s plan for high-pressure delivery pipes across South Los Angeles, which will be closer to 21 Los Angeles Unified School District campuses than allowed by federal safety rules.
The Ventura project is running into the Oxnard anti-LNG activists, who are still organized and meeting monthly. The NorthernStar LNG terminal would be stationed atop a 29-year-old oil rig in 310 feet of saltwater that coastal residents said they had thought was slated for dismantling.
The platform 12.6 miles off Ventura Harbor has some minor, repairable structural problems, the company acknowledged in its application, and suffered underwater structural damage in two construction mishaps decades ago.
In addition, there is still significant recoverable oil beneath the offshore platform, and federal energy law appears to prohibit the removal of an oil rig from production if oil can be profitably recovered.
The entire market assumptions for the profitable importation of LNG to California may have been upended, however, by the recent spike in oil prices, which has also pulled world LNG prices up. A recent LNG sales contract signed by Indonesia set prices four times greater than those in LNG studies assumed by those in Sacramento who said the state needs the gas, putting imported LNG way more expensive than domestic gas.
Three major pipeline expansions to bring natural gas to California from producing areas in the Rockies are being proposed, which could likely bring the West Coast gas at cheaper prices than from overseas, LNG opponents say.
In addition, the parent company of the Southern California Gas Company is about to inaugurate the LNG plant it rushed to completion in Baja California, where U.S. environmental review laws could not delay it. That $1 billion-plus plant, called Costa Azul, has capacity equal to one tenth of the natural gas used on the entire West Coast of Canada, Mexico and the U.S.
But the parent company, San Diego-based Sempra, can only recover its costs for building Costa Azul if LNG flows through it, critics note. The California Public Utilities Commission is currently considering Sempra’s request to shift 25 percent of the gas consumed by southern Californians to LNG imported via Costa Azul, and shield those long-term contract prices from the public for “competitive reasons.”
A coalition of environmental groups estimates that customers of Southern California Gas and San Diego Gas & Electric—monopolies that are both regulated Sempra subsidiaries—will pay $5.4 billion extra to Sempra’s unregulated LNG trading, LNG terminal and Mexican pipeline subsidiaries over the 20-year life of the secret LNG contracts.
In filings with the state, Sempra attorney William Rapp said “LNG supplies could significantly increase competition, lower prices and increase supply diversity.” But as to the alleged sweetheart deal for LNG, Sempra spokespersons refused to take calls from the Malibu Surfside News, and referred questions to the Washington LNG lobbying arm of the American Petroleum Institute, where a spokesperson said she was unable to address the issue.
Sempra said California’s government has already acknowledged that California needs additional natural gas and can get it cheaply from LNG. But opponents point out that those studies were done by three state officials who, soon after making that assessment, cashed out and went to work for LNG hopefuls.
Since Cabrillo Port was defeated, LNG terminals in Long Beach, New York state and New Jersey have been killed for varying legal reasons. Several have been approved in Texas and Louisiana, but U.S. LNG imports have dropped to record lows because of the high world price.
BHP Billiton never acknowledged its defeat in Malibu, and quietly closed its Oxnard office last summer. The executives campaigning for Cabrillo Port have left the company, and one of them agreed this week that BHP Billiton would have been smart to tow Cabrillo Port to China for use in a market that is much more willing to pay the price for LNG imports.