FERC Rejects Rehearing Petitions on Long Beach LNG Siting

Behind closed doors, the Federal Energy Regulatory Commission reaffirmed its exclusive jurisdiction over the siting of the proposed Sound Energy Solutions (SES) Long Beach liquefied natural gas terminal and rejected petitions to rehear its decision. Last week, FERC quietly released its order that continues to refuse to designate the California Public Utilities Commission as the lead state agency. The decision was not made at FERC?s June 17 public meeting as expected and not posted under FERC?s decisions section or notices section of its Web site. Nor was the order accompanied by a press release ?because there was nothing new to report,? said Tamara Young Allen, FERC spokesperson. The CPUC has 60 days to decide whether to appeal. ?The uncertainty is not good for our project,? said Tom Giles, SES project manager. He said the company was waiting for the CPUC?s response, noting ?it is a jurisdictional fight between the regulators.? The CPUC voted in April to require the company to apply for a certificate of convenience and necessity ( Circuit , April 30, 2004). Many, including FERC chair Pat Wood, expect and hope that the jurisdictional lines between federal and state authority over the LNG safety, environmental, and market impacts will be drawn by the courts. The state of California ?should play an integral role in siting and licensing any major industrial facility,? said Steven Meheen, project manager for BHP Billiton, which is proposing an LNG facility 14 miles off the coast of Ventura. ?There is no exclusion or attempt of exclusion of state regulatory bodies with a deepwater port permitting process.? Unlike the SES facility, BHP?s Cabrillo Port project will be under the jurisdiction of the U.S. Coast Guard and the California State Lands Commission. FERC continues to reject the CPUC?s assertion of jurisdiction over the Long Beach facility but noted that other agencies will be involved in the matter. If they interfere with federal rights or requirements, however, ?federal provisions hold sway,? FERC stated in its June 9 ruling. Federal regulators added, ?this order serves the public interest by providing uniform federal oversight, construction, operation, and safety of facilities to import foreign LNG to meet the nation?s critical energy needs.? Although FERC asserts that it has sole say over the Sound Energy facility, the order adds that other federal, state, and local agencies will issue permits and licenses under delegated federal authority ?in a manner compatible with our policies and regulations.? It remains to be seen, for example, how the Port of Long Beach?s environmental impact assessment under state law, which it will submit to the California Energy Commission, will be received by federal regulators. One potential environmental problem is that LNG imported from different countries involves natural gas supplies containing different levels of gases, such as propane and ethane, that must be stripped before the fuel is transported. Removing these explosive gases on site would increase safety hazards and could create pollution problems. ?It is such a small site,? warned Bry Myown, spokesperson for Long Beach Citizens for Utility Reform. ?Refining is not inextricably linked to the terminal.?

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FERC Rejects Rehearing Petitions on Long Beach LNG Siting

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