Posted on 03/25/2004 1:35:15 PM PST by calcowgirl
California's long-running tussle with the Federal Energy Regulatory Commission spilled onto a new front yesterday, as the federal agency ruled that it – not the PUC – has jurisdiction over a planned liquefied natural terminal gas planned for Long Beach.
In a 4-0 vote, FERC broadly asserted that it has exclusive authority over the construction and siting of LNG import terminals, about 30 of which have been proposed around the United States, including off Camp Pendleton.
Mexican regulators are overseeing plans by U.S. energy companies to build LNG facilities near Ensenada in Baja California.
The California Public Utilities Commission, which regulates the state's gas utilities, had argued that it has authority over the planned Long Beach terminal because all the gas from the facility would be used within the state, making it exempt from federal control over interstate power shipments.
The PUC also argued that it has the legal authority to oversee environmental and safety aspects of the proposed plant.
But FERC's order states that LNG terminals should be regulated as import facilities and therefore subject to the agency's authority under the foreign commerce section of the Natural Gas Act.
"I regret that the CPUC precipitated what I think is a totally unnecessary confrontation," said Joseph Kelliher, a member of the federal commission. "I'm puzzled that they would act in a manner that would discourage the addition of badly needed gas supplies in California."
FERC's decision sparked criticism from Loretta Lynch, a member and former president of the PUC. She noted that California had filed a key brief in the case one day before the federal regulators' vote.
"FERC has bent over backward to affirmatively harm Californians to the advantage of energy suppliers," Lynch said. "They did not consider our position before they jammed through a position that threatens California."
California regulators and elected officials were highly critical of FERC's oversight during the electricity crisis of 2000-01, and critical as well of the its handling of state requests for refunds from alleged overcharges. The officials said FERC did little to alleviate the crisis and initially overlooked widespread market rigging by suppliers.
Harvey Morris, principal counsel for the PUC, said the state had not yet seen FERC's formal order in the LNG case. Morris said he suspected California's next move will be to appeal for a re-hearing of the decision.
LNG is a supercooled, compressed and highly combustible form of natural gas that allows for the importation of the commodity from fields around the world. Currently, nearly all of the fuel is supplied via pipeline from North American fields in its gaseous state.
As regional sources diminish, the energy industry is pressing for building import terminals to satisfy U.S. demand. Others say the United States should rely more on conservation and renewable alternatives, rather than build an expensive and potential hazardous LNG infrastructure, which must also include a fleet of tankers to transport the commodity.
Working through a subsidiary called Sound Energy Systems, Mitsubishi, Japan's largest trading company, is proposing to build a tanker terminal that would be used to import LNG to Long Beach.
The facility would be able to receive and deliver about 700 million cubic feet a day of natural gas, according to Sound Energy, enough fuel for about 3.1 million average homes. Construction is scheduled to begin this year, with completion set for late 2007. The Long Beach terminal would receive about 70 ships a year.
Area residents and environmental groups have challenged the project as susceptible to terrorist attacks and a new source of air pollution. Massachusetts officials have reacted with alarm to disclosures this week that Al-Qaeda operatives entered Boston harbor aboard LNG tankers before the Sept. 11 attacks.
FERC will continue evaluating the project's environmental impact while awaiting a court decision on whether authority over the terminal belongs to the federal government or the state. Doing so will minimize any construction delays caused by a California appeal, the commission said.
New motto!
Get the bumperstickers printed!
I'd add "Sky high utility costs", to the hilarious "Clean, green and no jobs, bumper sticker.
Clean, Green, Sky High Utilities & NO FREAKIN" JOBS.
Clean, Green, Sky High Utilities & NO FREAKIN" JOBS.
Or maybe a Billboard, hmmmmm.
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