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The State

Firm Cancels LNG Facility

Community opposition causes Calpine to withdraw its plans for a natural gas terminal on Humboldt Bay.

March 18, 2004|Emily Gurnon and Deborah Schoch | Special to The Times

EUREKA, Calif. — Independent power producer Calpine Corp. on Wednesday abruptly withdrew plans to build a liquefied natural gas terminal on Humboldt Bay, astonishing and delighting hundreds of residents who had rallied to defeat the project.

Calpine's announcement came the afternoon after a raucous meeting at which 900 people packed the auditorium of this small coastal city, the vast majority denouncing the idea of importing the flammable gas through their community.

"It is the policy of Calpine not to build projects in areas where there is insufficient community support," company project development director Ken Abreu wrote in a letter hand-delivered to city officials Wednesday. "Based on feedback received from the local community and public officials, we feel this decision is best for all parties."

The cancellation, just days after the town of Harpswell, Maine, rejected a similar plan, raises questions about the future of LNG imports into the United States.

Energy companies nationwide are turning to LNG as a ready source of natural gas, especially in the face of price increases and a dwindling domestic supply. But public opposition has stalled or defeated projects in Mobile, Ala., Vallejo, Calif., and other communities where residents feared that the highly flammable gas could pose a risk to residents.

Opposition is surfacing to a similar project planned for Long Beach and two facilities proposed off the Ventura County coast.

The Calpine proposal for an LNG terminal on Humboldt Bay met with a storm of protest in and around this North Coast community of 26,000 people, many of them daunted by the sheer size of the project.

Calpine would have built two 13-story storage tanks at the terminal, where mammoth 900-foot-long tankers would have unloaded the liquid gas. The area's tallest building, the Humboldt County Courthouse, stands only five stories high.

Crowds jammed the municipal auditorium Tuesday night, where the City Council was poised to decide whether to authorize the first step toward building the plant: an "exclusive right to negotiate" with San Jose-based Calpine.

After hearing more than 75 speakers, the council voted to continue its meeting tonight, but the Calpine cancellation ended the debate.

"It was a pretty clear message that there was a strong opposition to this project, and it's not just radical environmentalists, it's a pretty broad cross-section of the community," said Eureka Mayor Peter La Vallee.

Cynthia Elkins of the Garberville-based Environmental Protection Information Center said she was ecstatic.

"It's great for us to have a resounding victory and be assured that this terrible project is not going to become a part of our future," she said.

Calpine officials touted the project as a boon for the local economy, which has lost many timber and fishing jobs.

A minority at Tuesday's meeting urged the City Council to approve the exclusive right to negotiate, thereby keeping the project alive.

"What kind of future can I expect for myself and my kids?" asked Joe McKenzie, a construction worker and lifelong resident of Eureka. "I wonder if there will be any local jobs here for them when they're grown."

Natural gas cooled to its liquid form is highly compressed, making it cheaper and easier to transport from distant producing countries.

Four LNG facilities currently exist in the United States, with 30 more planned.

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Special correspondent Gurnon reported from Eureka; Times staff writer Schoch reported from Los Angeles.

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