Coastal panel rejects natural gas terminal

The California Coastal Commission unanimously decided that the project failed to meet rigorous coastal protection standards.

The commissioners concluded that the processing plant -- proposed to be moored about 20 miles off Malibu -- would damage marine mammals, ocean views and birds near Channel Islands National Park, and contribute to smog and global warming.

Further, the commissioners, echoing concerns of coastal residents, sharply criticized the company proposing the project, Australia energy and mining giant BHP Billiton.

"If we don't feel that BHP has its heart in this, and you look at it as merely profit, it's not in our coast's best interest to have the project," said Commissioner Ben Hueso, a San Diego councilman.

But the decision is expected to be challenged. BHP Billiton officials said they would consider their next move over the next few days. The company has 30 days to appeal to U.S. Commerce Secretary Carlos Gutierrez.

The day before the hearing, BHP Billiton tried to prevent the commission from reviewing the project and also urged the federal Maritime Administration to halt an ongoing federal review of the project.

"California needs natural gas to meet its future energy and environmental needs. Natural gas is the cleanest fossil fuel," Renee Klimczak, president of BHP Billiton LNG International Inc., told the commission.

Despite the company's request, the commission proceeded with the hearing because the company's federal application to build the plant remains valid.

Further, a decision on the project cannot be delayed because a key hearing last week before the U.S. Coast Guard triggered a clock under which Gov. Arnold Schwarzenegger must render a decision on the terminal by May 21.

About 500 people attended the all-day hearing Thursday in Santa Barbara. It was the third hearing on the project in the last eight days.

The company seeks to build an $800-million offshore plant that would process about 800 million cubic feet of liquefied natural gas daily. Tankers would bring the super-chilled fuel from Australia and possibly Asia. The fuel would then be processed on the floating factory before being shipped to Oxnard.