CA: Governor cautions fed - Letter supports state's right to limit LNG terminals.

Gov. Arnold Schwarzenegger on Tuesday threw his weight behind Long Beach and other coastal communities in a critical fight between California and the federal government. At stake is the state's authority to approve liquefied natural gas terminals and other coastal energy developments.

In direct opposition to the Bush Administration, Schwarzenegger formally declared his support for states' rights when it comes to LNG terminals. In a letter to members of the Energy Committee, the governor stated his opposition to pending legislation that would grant the Federal Energy Regulatory Commission final approval of LNG sites.

Officials in Long Beach, where an LNG terminal is being proposed for the port, have been lobbying against the legislation. Schwarzenegger's support will help.

As the governor stated in his letter, the legislation would dramatically weaken the ability of California and other coastal states to regulate development and protect their shores from environmental impacts. States and local governments are better equipped to handle safety and environmental concerns regarding their coastlines, Schwarzenegger wrote.

We couldn't agree more. With Schwarzenegger on their side, Long Beach city officials must continue to fight aggressively against the proposed federal legislation.

http://www.latimes.com/news/local/state/la-me-lng18may18,1,7368873.story?coll=la-news-state

Gov. Arnold Schwarzenegger has declared his opposition to proposed federal legislation that would usurp state control over the location of liquefied natural gas terminals and that could weaken California's ability to block new oil and gas drilling off its coast.

"I strongly oppose any new oil and gas leasing off California's coastline and any efforts to weaken the right of California, or other states, to protect their coastlines from the adverse impacts of offshore oil and gas drilling," Schwarzenegger wrote in a seven-page letter to Energy Committee Chairman Sen. Pete V. Domenici (R-New Mexico) and Sen. Jeff Bingaman (D-New Mexico), the top Democrat on the committee.

In his letter, Schwarzenegger also reiterated his opposition to giving federal regulators, rather than states, the final say over the location of LNG terminals. Three such terminals are now proposed in California, one in Long Beach and two a few miles off the coast of Oxnard.

The governor wrote that he sees imported natural gas as important to the state's future energy needs. But, as he has indicated before, Schwarzenegger said he believes the safety and environmental concerns about the terminals, where the highly flammable gas would be unloaded, warrant state review of their location as well as state permits for how they operate, whether on shore or in state waters.

The governor's May 13 letter comes as Senate leaders weigh proposals for a sweeping energy bill that could undermine the two-decade-old congressional moratorium on new offshore oil and gas drilling off the Pacific and Atlantic coasts.

(snip)

This article has some good background information.

http://www.venturacountystar.com/vcs/county_news/article/0,1375,VCS_226_3760094,00.html

Energy bill's effects on LNG terminals unclear
Some experts say states could lose say over sites

Ventura County Star
By Michael Collins, collinsm@shns.com
May 7, 2005

WASHINGTON -- On this point, most everyone agrees:

The comprehensive energy bill that passed the House late last month would make federal regulators the final authority on the siting and permitting of liquefied natural gas terminals built on land.

But that's where the agreement ends. Supporters and opponents have analyzed the legislation and come to starkly different conclusions about the impact it would have on offshore LNG terminals such as the two proposed off the coast of Oxnard.

Congressional aides involved in drafting the House legislation and a similar bill still under consideration in the Senate say offshore facilities would not be affected by either proposal.

Offshore terminals in federal waters fall under the jurisdiction of the U.S. Coast Guard and the federal Maritime Administration. LNG facilities built on land are under the control of the Federal Energy Regulatory Commission.

Both bills would give FERC the final say on onshore facilities but would not affect the Coast Guard's or the Maritime Administration's authority over offshore terminals, supporters say.

But environmentalists and some lawmakers aren't so sure.

One section in the House bill could give the Interior secretary the sole authority to regulate, permit and monitor offshore LNG terminals, critics warn. Another could seriously weaken the state's regulatory role over pipelines extending from offshore terminals, they say.

"This is something the oil industry has been dreaming of and promoting in Congress for years, but they have never been able to get traction out of Congress to get it passed," said Richard Charter, a resident of the San Francisco Bay Area and co-chairman of the National OCS Coalition, an environmental advocacy group.

"In this session of Congress, the cookie jar is pretty much unguarded," said Charter, whose group is fighting offshore oil development in environmentally sensitive areas around the country.

Authority dispute

Of particular concern to LNG opponents is language in the House bill that deals with the Outer Continental Shelf, the undersea land that is still under U.S. control. That section of the bill gives the Interior secretary the authority to grant a lease, easement or right-of-way for offshore energy projects within the Outer Continental Shelf and to issue regulations to monitor such projects.

The title of the provision implies that it deals strictly with "alternate" energy uses. But an analysis by the Democratic staff of the House Resources Committee concluded the language would give the Department of Interior new authority to allow a wide range of energy facilities, including LNG terminals.

Under that section of the legislation, offshore LNG terminals and support facilities could be permitted even within coastal areas currently subject to congressional moratoria on oil and gas leasing, the Democratic analysis said.

"Pretty much every step, every phase of every project in federal waters only needs to be approved by one person" under the bill, Charter said.

Brian Kennedy, a spokesman for the House Resources Committee, accused critics of deliberately misrepresenting what is in the bill.

Kennedy said the provision in question would not apply to LNG terminals. As proof, he pointed to language in the bill that says the new authority given to the interior secretary would apply to activities "not otherwise authorized" under the Deepwater Port Act of 1974. Offshore LNG terminals are covered under that law.

"They are just trying to pull a fast one to get some media coverage and scare people," Kennedy said of the bill's critics. "A clear reading of the bill proves that they are absolutely wrong."

Another section that could affect offshore LNG terminals, opponents say, concerns the regulation of pipelines extending from those facilities.

Who controls the pipes?

Both of the facilities proposed off the shore of Oxnard call for the construction of undersea pipelines that would be used to pump the gas to the shore.

BHP Billiton wants to establish a floating LNG import terminal 14 miles offshore and build an undersea pipeline to deliver the fuel into the Southern California Gas system. Crystal Energy wants to convert an existing offshore platform 11 miles from Oxnard into an LNG receiving and regasification facility and install a pipeline to deliver the fuel to the shore.

Under current law, the California Coastal Commission gains some regulatory authority over pipelines from offshore facilities in federal waters once they reach the shore. The commission can't veto such projects, but it can review them to see if they conform with a federally approved state plan set up under the Coastal Zone Management Act.

If the commission finds the project is inconsistent with the state plan, the state can object, which sets an appeals process in motion.

But under the House and Senate bills, the state record would not be reviewed as part of the appeals process. Environmentalists say that means the state would have no meaningful role in the process.

In addition, the review period for projects would be limited to one year, which, opponents say, would give them a relatively short period of time to analyze and raise objections to complex proposals.

"Through the energy bill, the Bush administration is now attempting to curtail the right of California, and every other state, to have a say over a variety of issues involving LNG facilities, both onshore and offshore," said Rep. Lois Capps, D-Santa Barbara. "This is a bad policy and one that could be dangerous for all Californians."

Susan Jordan, director of the California Coastal Protection Network, a nonprofit advocacy group, charged that the changes are part of the federal government's strategy to assert its authority over onshore and offshore LNG terminals.

"The big picture is they are saying to the state and all coastal states that the federal government has control over LNG, you don't have a say in it," Jordan said. "And that is what we object to."

But Kennedy said the administration's critics aren't being honest.

"Environmentalists are deliberately misconstruing what is and what is not in the bill to drum up bad press on the bill," Kennedy said. "This is a perfect example of that."

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