Posted on 12/02/2004 8:58:49 AM PST by NormsRevenge
A handful of short paragraphs tacked onto a massive federal spending bill could weaken California's fight to approve or veto the location of liquefied natural gas terminals planned for the state.
The rider asserts that federal law passed decades ago gives federal regulators, not state officials, the exclusive legal right over LNG siting decisions.
The four-paragraph rider, attached to a report on the lengthy congressional appropriations bill, specifically takes issue with the California Public Utilities Commission.
The PUC is locked in litigation with the Federal Energy Regulatory Commission over the siting authority question. Both sides contend they have exclusive jurisdiction to rule on a proposed LNG terminal planned in Long Beach. The U.S. Ninth Circuit Court of Appeals is considering the question.
The huge appropriations bill has been passed by both houses of Congress. But it has not been sent to President Bush because of a dispute over a section related to income tax.
The tax matter probably will be resolved by early next week. Whether the language on LNG stands could depend on congressional delegations from coastal states such as California, said Tyson Slocum, energy research director with Public Citizen, an advocacy group in Washington, D.C., that opposes the rider.
"The question is whether the coastal delegations are going to put up enough of a fuss to demand this language be removed," Slocum said.
A letter from the attorney general of Rhode Island – which would be affected by two planned LNG terminals – urged such action last week. But Slocum said California officials have yet to take similar action.
Matt Letourneau, a spokesman for Sen. Pete Domenici, R-New Mexico, said the senator took responsibility for the rider, which is supported by the natural gas industry.
"The language is just sort of a reiteration of something Congress has already decided through the Natural Gas Act," Letourneau said.
But Harvey Morris, principal counsel for the California PUC, disagreed with that interpretation. Morris said siting authority for LNG terminals rests with the state because the matter could impact the health and safety of Californians.
The PUC, he said, is in the best position to investigate hazards such as potential damage from earthquakes and can best address community concerns. Gas from the facility is slated to be consumed within the state, he added, excluding it from matters of interstate commerce, which are regulated by the federal government.
"So it should not matter to any other city, state or country, where these facilities are built," Morris said. "We don't think FERC would have as much expertise or concern. The state knows the local conditions."
The PUC plans to hold a public hearing on the Long Beach proposal, he said.
Morris also said he doubted the rider would have much legal clout because courts are unlikely to give much weight to clarifying language coming years after the passage of the law.
For its part, FERC asserts it has LNG siting authority because the Long Beach terminal will receive shipments from abroad. International commerce is properly regulated by federal authorities, FERC says.
The Natural Gas Supply Association also supports FERC jurisdiction. The trade group says it has pressed for clarification of the federal law because jurisdictional disputes could impede LNG project development.
"It is a matter of interstate commerce, and it appropriately rests with FERC," said Mark Stultz, a spokesman for the natural gas group, which represents producers and marketers.
"If there continues to be doubt about the jurisdiction for these projects you'll have significant delays and cost increases," he said. "It could delay the ability to provide much needed natural gas."
Proponents of LNG contend that supplies of natural gas are diminishing in North America and say that imports are necessary to protect consumers and restrain prices, which have risen in recent years. Renewable energy sources, LNG proponents argue, cannot fill the gap.
Those who oppose LNG projects argue that the potential for natural gas shortages is being exaggerated and could be dealt with through conservation, energy efficiency and the development of alternative renewable fuels.
The development of LNG, opponents also say, will bring new hazards from heavy traffic in fuel-laden supertankers and leave the country increasingly dependent on yet another imported fuel.
Slocum, of Public Citizen, said consumers need state regulators to protect them from LNG hazards. He said FERC had a dismal record protecting California consumers during the electricity crisis.
He added that the prospect for adequate input by communities, individuals and local governments is far greater if jurisdiction over LNG siting lies with California rather than FERC.
Tom Giles, the chief operating officer of Sound Energy Solutions, the Mitsubishi subsidiary hoping to build the Long Beach terminal, said his company wasn't involved in inserting the rider onto the appropriations bill.
Giles said Sound Energy was focused on the more immediate target of filing a host of environmental reports.
"The jurisdiction issue is not something we're working on," he said.
Bry Myown, a spokeswoman for Long Beach Citizens for Utility Reform, which opposes the project, said her group will try to win support in the California congressional delegation for killing the LNG language.
"Obviously, we want this decision made in California," Myown said.
My head hurts!
Just build a terminal 12.5 miles out and run a pipeline into the port alongside existing (located on piers) petroleum pipelines.
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