State Regulators Abandon LNG Jurisdictional Lawsuit

The California Public Utilities Commission quietly agreed to dismiss its suit challenging federal regulators' claim of exclusive jurisdiction over the siting of liquefied natural gas terminals late last week. However, it upped the ante October 6 by asking the Federal Energy Regulatory Commission to reject Sound Energy Solutions' Long Beach LNG project application. State regulators also suggested an alternative-that their federal counterparts hold an evidentiary hearing on the onshore LNG project to fully assess safety concerns. The 2005 Federal Energy Policy Act gave FERC sole say over proposed import natural gas terminals. The lawsuit the state commission brought against FERC in early 2004 in the Ninth Circuit Court of Appeals was thus mooted by the new federal law. "The fight with FERC is over but we are still opposed to SES' LNG project," said Harvey Morris, CPUC counsel. The safety of 130,000 people living or working within three miles of the proposed site at the Port of Long Beach is at stake, "and many of them could be killed," states the CPUC in is motion filed with FERC Thursday. Previously, the CPUC did not insist on a full record or hearing at FERC when it protested federal regulators claim of exclusive authority over LNG certification. State regulators presumed they would hold a hearing to flesh out the issues, Morris explained. Neither the developer, nor industry representatives responded to requests for comment by press time. The CPUC supports the development of gas import terminals but insists they be built at least three miles offshore. Because there are alternatives, "It is not a Hobson's choice between either insufficient natural gas supplies or siting of hazardous LNG facilities in a densely populated area," according to the CPUC. The CPUC filed its response supporting FERC's motion to dismiss in the Ninth Circuit September 29. The suit was based on provisions of the federal Natural Gas Act that was substantially amended by the energy bill. The CPUC wants FERC to include in its record testimony of the state's expert witness Jerry Havens. Havens, professor of chemical engineering at the University of Arkansas, has focused on the possible extent and degree of harm from LNG vapor catching fire. He also assessed safety issues created by LNG fuel trailer trucks going in out of the Port of Long Beach each day. FERC decline to comment on either the motion to dismiss the suit or request for a hearing on safety issues because the matters are pending.

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State Regulators Abandon LNG Jurisdictional Lawsuit

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