CA: Bill to rank LNG plans shunted to committee - Supporters say state may lose power to U.S.

Ventura Star ^ | 8/26/06 | Timm Herdt

[NormsRevenge]

A bill that would require the California Energy Commission to evaluate and rank all existing proposals to import liquefied natural gas has been sent back to committee — a decision supporters fear could doom any chance of passage.

The bill, SB426, fell just short of success on the final night of last year's legislative session. It passed the Assembly late that night, but the Senate adjourned for the year before the measure could be ferried a few hundred feet across the Capitol for a final vote that would have sent it to the governor.

Since none of the LNG proposals received federal permits this year, supporters decided the idea remains timely, and amended the bill by changing all references to "2006" to "2007." Those amendments were approved late Thursday, but the Assembly's Democratic leadership ruled they were substantive and required that bill be sent back to the Utilities and Commerce Committee, which will conduct a hearing on Monday.

Had the changes in the dates been deemed technical amendments, the bill would have been immediately eligible for another vote on the Assembly floor.

"When there are substantive changes to legislation — and this case there are several major changes — it makes sense to have more public input," said Steven Maviglio, spokesman for Speaker Fabian Nuñez, D-Los Angeles.

It will need six votes to make it out of committee, but only five of the committee's 11 members voted for the measure last year.

"This is our last chance to get a substantial review process in place," said Susan Jordan of the California Coastal Protection Network, spokeswoman for a coalition of 35 environmental organizations backing the bill.

Supporters argue that without a comprehensive review that evaluates the pros and cons of all the various LNG proposals, California will be forced to live with whichever project first clears all the federal regulatory hurdles.

Among the proposals is one by the Australian energy firm BHP Billiton to construct a floating terminal off the coast of Oxnard and another by Crystal Energy to convert an offshore oil platform off the Oxnard coast. Also proposed is an onshore terminal in the Port of Long Beach and a project off the coast of El Segundo that would allow ships to pump natural gas ashore without the need for a terminal.

Permit applications for all those proposals are now, in one stage or another, before federal authorities.

Supporters of the bill believe the state should conduct its own evaluation of the environmental, public safety and economic merits of the various proposals.

"These are real issues," Jordan said. "Deciding where an LNG terminal goes shouldn't be a matter of eenie-meenie-miney-moe."

Whichever proposal is first to obtain a permit could make the others moot. Even LNG supporters say the state energy market could support only one, or possibly two, terminals.

Opponents of the bill argue that a state review would add an unnecessary layer of regulation and could further delay construction of a terminal they say is essential to help meet the state's growing demand for natural gas.

The opponents include the oil industry and manufacturers that use large amounts of natural gas. They were joined this week by the state Building and Construction Trades Council, which fears a state ranking process would disadvantage the onshore proposal in Long Beach.

Conoco Phillips, the proponent of the Long Beach facility, has agreed to use union labor in construction of a potential $500 million structure.

"It's a big project for us," said Jay Hansen, lobbyist for the labor council.

Jordan argues a state review would be even more valuable now than it would have been a year ago because much more has been learned about the details of the proposals. In addition, she noted, the emergence of the newest proposal, the one off El Segundo, adds a new wrinkle to the equation because it does not require a terminal. Instead, it would use ships equipped with onboard facilities that would convert the fuel to its gas form.

An LNG facility would allow California to import natural gas from abroad. The process involves freezing the gas, which converts it to a liquid, then shipping the liquid by tanker.

The other three proposals require a terminal that would receive the liquid fuel, convert it back to gas, and then pump it through pipelines into the state's existing natural-gas distribution network.

[thackney]

ping

Something the supporters of an Alaska LNG export terminal should keep in mind.

[RightWhale]

They know the Feds are lurking not far out of sight. Do the Feds want to take over? Yes and no. But they will if things don't keep moving.

[jocko12]

Now you know why not to vote for any incumbent.

[RightWhale]

What? If we voted for the incumbent we wouldn't be having this LNG Fed takeover talk! But nooo . . .. So we are back to Square One and the Feds have a pavilion on Square One.