Proposed Offshore LNG Terminal Earmarked
for Downsizing
• Project that Seeks to Anchor 22
Miles Off Point Dume to Eliminate One Processing Vessel
The multinational oil company behind a
proposed floating liquefied natural gas terminal 22 miles off
Point Dume has asked officials to allow a half-year delay so it
can downsize its plans.
A spokesperson for Woodside Natural Gas
says the firm will eliminate one of the two processing ships it
had originally proposed to permanently station in Santa Monica
Bay, and scale back the pipelines it will ask to lay across the
floor of Santa Monica Bay and into Los Angeles.
Laura Doll said her company is downsizing
its plans to import LNG off Malibu “because we want to
make it smarter and better and have the smallest environmental
footprint possible.” She said the elimination of one of
the two LNG terminal ships will not cut capacity by 50 percent,
but said the new capacity rating for the remaining ship has yet
to be determined.
Doll said the downsizing is not a reaction
to world economic catastrophes, or the recent price and supply
trends that have made LNG cost nearly triple the price of
domestic natural gas.
Westside Los Angeles City
Councilmember Bill Rosendahl, who has been skeptical of
the plan, said he was amused that it was in essence being
halved. “These are completely different times, and it is
very likely that this company will go through the paces and
then not build anything.”
The request means at least seven
months of further delay for the proposed Woodside LNG terminal
in Santa Monica Bay, being marketed as
“OceanWay.” If approved, Woodside would
base a new LNG processing ship off the coast in 2012, or later,
to process incoming cargoes from Australia and Asia,
and push natural gas into the California energy grid through
new undersea pipelines that would come ashore at the Los
Angeles Airport.
OceanWay took the spotlight after a
somewhat similar LNG terminal closer to Malibu, called
Cabrillo Port, was shot down by state regulators after major
opposition from Malibu and Oxnard residents in 2007.
Because the Woodside pipes would come
ashore on L.A. beaches, L.A. city officials get to handle the
multi-year application process, and the city council and mayor
will eventually team with the new Barack Obama administration
to decide its fate.
The application is being evaluated on a
fast-track timetable set by federal law, but has been
sidetracked for 13 months now as Woodside drafted required
plans to measure and minimize the huge amounts of carbon
pollution, in the form of new greenhouse gas emissions that the
project would create across the globe.
Although LNG is touted as a clean fuel,
substantial energy is needed to compress natural gas and move
it across the Pacific, and some studies show importing LNG is
not such a source of clean energy when the worldwide
“life-cycle” impacts are factored in.
A major opponent of West Coast LNG projects
noted that Woodside is dramatically cutting the size of its
import terminal one week after Solar L.A. was
unveiled, an ambitious plan to generate one tenth of Los
Angeles’s electricity with the sun.
“If this LNG project didn’t
make sense in the first place, it makes even less sense
now,” said Rory Cox at Pacific Environment in San
Francisco.
Cox is spearheading regional campaigns
against the five LNG terminals actively being promoted in
California and Oregon, including OceanWay and the
NorthernStar LNG terminal proposed for an oil rig just off
the Ventura coast, 35 miles northwest of Malibu.
Rob Male, Woodside Natural Gas vice
president of development, said that the changes will
“maintain the overall quality and positive environmental
attributes that are at the core of the OceanWay
design.”
The smaller size also means high-pressure
gas transmission lines will not have to be laid across South
Los Angeles, Inglewood and Westchester, a
controversial plan that would have put 42-inch diameter gas
pipes close to 19 public schools, and numerous
high-density housing units.
The Woodside downsizing comes the same week
that another company proposing a West Coast LNG import terminal
announced it would junk its already approved import
proposal, and at a time of international finance crises. But
Woodside spokesperson Doll said the company is looking at
longterm trends.
“Australia has a lot of natural gas,
and every study indicates that California is going to need
it,” she said, assuring that Woodside will build the
project, estimated to cost between $600 million and $1 billion.
But a Canadian LNG firm last week made an
opposite bet, and replaced plans to build an LNG import
terminal north of Seattle with plans to export LNG from the
same site.
“Rising natural gas demand in Asia
and recent increases in supply in North America ... have led to
significantly higher natural gas prices in Asia than North
America,” said a spokesperson for the Canadian
company, Kitimat LNG.
This reversal reflects dramatic changes in
the fundamental economic rules of the world energy business in
the six years since BHP Billiton announced plans to anchor its
import terminal off Malibu. The discovery of major new supplies
of natural gas in the United States, and the huge growth in
demand for natural gas in Asia, may have turned the Pacific LNG
market upside down.
LNG imports into North America have plunged
50 percent below their already minimal level this year, as LNG
cargoes have been diverted for much more money to Japan and
China. Three brand new, billion-dollar LNG terminals in the
U.S. and Mexico now sit virtually unused, and the
cost-efficiency of new, billion-dollar-plus LNG transport
chains to the West Coast has been questioned by some analysts
as the world grapples with an economic crisis.
City councils in Santa Monica and Malibu
have already voiced nonbinding opposition to the OceanWay
project, which would be visible many days from the local coast.
But OceanWay is supported by some residents of the LAX area,
partly because its pipes might serve as a physical barrier to
northward expansion of the airport towards their homes.
