Long Beach LNG Project Starts FERC Process

The Federal Energy Regulatory Commission set a February 23 deadline for intervenors to participate in its consideration of Sound Energy Solutions? application to build a liquefied natural gas terminal in Long Beach. The company, a subsidiary of Mitsubishi Corp., filed an application with the federal commission on January 26. ?There?s going to be any number of commissions that will have to approve this,? said Art Wong, spokesperson for the Port of Long Beach, which is a lead agency along with FERC on the requisite environmental analysis. In all, Sound Energy Solutions will have to obtain permits and authorizations from 18 different federal, state, and local agencies before it can construct the facility. The firm will need approvals for air and water pollution and hazardous materials, as well as transportation on land and at sea. The California Coastal Commission will also have to approve the facility. FERC is expected to hold hearings on a draft environmental impact statement for the project, which may be completed in about six months. After a final analysis is released, federal regulators will take additional comment before issuing an order on the application. ?We hope to finish permitting this year,? said Tom Giles, senior managing director of the Mitsubishi subsidiary. If the process goes as planned, he said, the facility will open in 2008. However, the onshore regasification terminal is facing growing opposition. Community activists cried foul over the closed-door, exclusive deal reached between the Port and SES. Safety and environmental issues and gas price concerns may be given short shrift, they say. Last May, the city council approved a memorandum of understanding that allowed the project to proceed although details of the agreement were not revealed. Much of the project information was off-limits because it was considered proprietary company data. ?No one knows what this deal will be,? said Bry Myowen, a local activist. The council spent less than two minutes discussing the proposal, and there was no public input, she noted. Activists are also concerned because the heavy industrial port is considered a prime terrorist target by the federal government. The potential for a conflagration of heavy gases in the natural gas?propane and ethane?that must be stripped away adds fuel to their fears, said Diana Mann, chair of Eco Link, a coalition of environmental groups. ?If those hundreds of millions of dollars were invested in clean, renewable, safe energy, we wouldn?t put so many lives in jeopardy,? added local activist Ann Denison. Because of the possible threats, the port is ?seeking federal grants so we can improve security,? Wong said. Despite community objections, Sound Energy expects that California?s growing need for natural gas and the project?s comparatively favorable economics will propel the proposal through the permit process. A similar project proposed for the harbor more than 20 years ago bogged down and was never built. Last year, local protests over risks of a proposed LNG project slated for Mare Island in the San Francisco Bay helped defeat the project. ?We?re in the heart of the market,? said Giles. The planned facility?s close proximity to high-pressure gas pipelines and a major population center will enable the company to deliver the liquefied natural gas to the Southern California market for a lower price than charged by competing companies, he said. Proposed offshore terminals along the coast of Ventura County and Mexico will cost more to build. It will also be more expensive to pipe gas from those facilities to the market, Giles maintained. According to the California Energy Commission, however, the prices of onshore and deepwater terminals were comparable. ?Ours is the only project that will have vehicle fuel,? said Julia Richardson, an attorney with Van Ness Feldman who is handling Sound Energy?s application before FERC. Demand for LNG for heavy trucks is expected to grow because of clean-air mandates in polluted Los Angeles, company officials maintained. The company would truck LNG to the area?s bus and truck yards, she said. Facility opponents acknowledge that natural gas is far cleaner than other fossil-fuel resources but noted that the estimated 140 daily truckloads to haul the gas from the port would increase traffic and air pollution. According to Sound Energy?s application to FERC, it would lease a 25-acre parcel on Terminal Island to build the facility, which is to include two double-walled LNG storage tanks surrounded by a cement wall. Giles said that modeling shows the site has an adequate buffer zone to prevent any impact on the surrounding community in the event of a catastrophic breach in the storage tanks. The facility would tie into Southern California Gas?s distribution network via a 2.3-mile pipeline and be able to deliver up to one billion cubic feet per day of gas. In 2002, SoCal Gas had total throughput of about 2,700 bcfd. Elizabeth McCarthy also contributed to this report.

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Long Beach LNG Project Starts FERC Process

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