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Fight Brews Over LNG Plants

Environmental groups plan to contest a federal claim of authority over the siting of liquefied natural gas terminals.

March 28, 2004|William Wan | Times Staff Writer

California officials and environmental groups are gearing up to battle the federal government over who has the authority to approve the construction of liquefied natural gas terminals in the state.

The fight has been brewing for months but intensified Wednesday when the Federal Energy Regulatory Commission declared itself the sole authority over the siting and construction of LNG terminals, including a proposed facility in Long Beach.

Environmental groups, which say the fuel is too volatile to use in urban areas, plan to meet in Los Angeles on Monday to organize against FERC and proposed liquefied gas terminals across the nation.

About 25 groups, ranging from the Sierra Club to the Ocean Conservancy, will meet to form a coalition to give environmental groups a voice in the debate, said organizer Susan Jordan, director of the California Coastal Protection Network.

"It's California's future we're talking about; we need to be in the driver's seat," Jordan said.

Also pitted against FERC is the California Public Utilities Commission, which, like the federal agency, insists that it has the authority to approve or reject LNG proposals in the state.

The utilities board must vote before appealing FERC's ruling, but the state agency will almost certainly appeal, said PUC Commissioner and former President Loretta Lynch. And should it fail in the appeal, she added, commissioners will take their fight to the federal courts.

"PUC has an obligation, according to the state Constitution, to fight any federal decree that preempts state law," Lynch said.

While their opponents mobilize, FERC officials said their ruling had cleared the way for them to process the application to build an LNG terminal in Long Beach, which was submitted by Sound Energy Solutions, a subsidiary of Mitsubishi.

"LNG is a hot topic now," said Tamara Young-Allen, a spokeswoman for FERC, noting that there are about 30 proposals across the country for liquefied gas terminals, including three along the California coast. "Just blink and there may be another one coming up."

The fuel has been widely used overseas for years, but recent rising gas prices and declining domestic supplies have increased interest in LNG in the United States.

Part of the appeal is its cost. Scientists have known for decades that natural gas shrinks to a fraction of its original size when chilled at minus 260 degrees Fahrenheit and converted from vapor to liquid. Companies can thus transport large quantities of natural gas cheaply in ships. The liquid then can be turned back into a gas at a terminal.

But opponents of the highly flammable fuel worry that a malfunction or attack on a Long Beach liquefied gas plant could kill scores of people with a single explosion. A blast at an Algerian LNG plant in January killed 27.

"If you have an oil spill, you might hurt marine animals, but with LNG, there's potential for human casualties," Jordan said.

The danger that terrorists might attack such a facility is addressed in the new book by former antiterrorism chief Richard Clarke. He came under attack from the Bush administration last week for his claims that it did not act swiftly against terrorists.

In "Against All Enemies," he alleges that, months before Sept. 11, 2001, Al Qaeda operatives entered the U.S. on an LNG tanker in Boston Harbor. He also says that, on the morning of 9/11, federal officials worried that the liquefied natural gas terminal in Everett, a Boston suburb, was a possible terrorist target.

Concerns over the safety of LNG scuttled plans for two proposals this month. In Harpswell, Maine, residents voted March 9 against allowing a terminal on their coast. On March 17, Calpine withdrew plans for a terminal in Eureka, Calif., after hundreds of residents and environmentalists appeared before the City Council to denounce an LNG plant as unwise and unsafe.

FERC officials, however, dispute the danger of LNG systems.

"The safety record is pretty good," Young-Allen said. "Prior to the Algeria incident, we had not had a major incident in 44 years."

The fight in Long Beach, however, may go on for months, and FERC and the PUC have a history of bad blood.

When Mitsubishi applied with FERC for the gas plant in January, the PUC filed a 19-page protest, saying Mitsubishi also must apply with the state.

Mitsubishi countered with a 53-page response, arguing that FERC's authority supersedes the state's. Last Tuesday, the PUC filed a 48-page rebuttal, asserting that it -- not the federal agency -- had jurisdiction. The next morning, FERC ruled against the PUC.

While the state and federal agencies wrangled over jurisdiction, Long Beach officials jumped into the argument Friday, claiming that local -- not state nor federal -- powers have the final say.

"FERC approval is meaningless without a lease from Long Beach," said Harbor Commission President John Hancock.

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