UK: California Seeks Say in Long Beach Gas Terminal Plan

State Seeks Final Say on Gas Terminal Plan; Company is seeking federal agency's permission to build a facility in Long Beach. The PUC files a protest, cites safety issues.
Publisher Name: 
Los Angeles Times

In an unusual protest filed with federal regulators
this week, the state Public Utilities Commission
complained that it had tried -- and failed -- since
October to get Mitsubishi to apply to the agency for
permission to build a terminal for liquefied natural
gas in the Port of Long Beach.

The commission asserted that, under state law, it has
broad authority to review and approve the proposed
$400-million terminal. In the strongly worded motion
sent to the Federal Energy Regulatory Commission, it
questions whether such a terminal can be located
safely in a highly populated area such as the Los
Angeles-Long Beach port complex, which is ringed by
homes and businesses.

The move raises questions about which authority -- the
state or the federal government -- has the final say
over the siting and building of onshore LNG terminals
in California. It could set a precedent for an LNG
proposal pending in Eureka and for future proposals
for terminals around the state.

A Mitsubishi subsidiary executive Wednesday said his
firm was waiting to see how federal and state
regulators dealt with the issue.

"This is a complicated issue, so we'll just see over
time how it turns out," said Thomas E. Giles,
executive vice president of Sound Energy Solutions.
The company hopes to receive federal approval for its
project this year so it can begin construction in
January.

When asked if Mitsubishi planned to apply to the state
as requested, Giles said only that his firm had
already started an application with the federal
government before discussions with the state began.

"Clearly you have two regulatory bodies who I'm sure
are in dialogue with each other," Giles said.

To California officials, the need for the state's
permission is clear. Harvey Y. Morris, attorney at the
state commission, said, "We're preserving our rights
under the California Public Utilities Code to look out
for the rights of California's people."

The commission's motion added, "In light of the
possibility of an accident caused by human error or of
a deliberate act by terrorists, the questions
concerning the safety of the citizens and businesses
located in the vicinity of the proposed LNG facilities
must be very carefully reviewed."

Mitsubishi officials have said, however, that their
plant would include numerous safety protections and
that the company had been shipping LNG for many years
in Asia without safety problems.

Energy companies are proposing more than 30 import
terminals nationwide to keep up with the fast-growing
demand for natural gas from overseas. Only four
terminals are operating in the U.S. today, and only
one, in the Boston suburb of Everett, is located in a
populated area.

The flurry of proposals has triggered protests in some
cities, as residents question the safety of such
plants and whether they might be terrorist targets.

Mitsubishi applied to the federal energy commission
last month for permission to build the terminal, which
it would use to import chilled natural gas from around
the Pacific Rim and to turn it into natural gas to
heat and light homes and businesses.

But California regulators, in their 19-page motion of
intervention and protest, question how much authority
the federal agency really has over the proposal from
Mitsubishi's subsidiary, stating that the company is,
in fact, a public utility under California law. As
such, the firm is required to apply and receive a
"certificate of public convenience and necessity," the
motion said.

Citing past cases, the regulators question whether
FERC has jurisdiction over LNG facilities,
particularly those -- such as the one proposed for
Long Beach -- that would not connect to interstate
pipelines of the sort normally overseen by the federal
agency.

Attached to the motion is an Oct. 30 letter that state
regulators sent to Giles informing him that the
state's public utility commissioners had voted to
assert their authority over the Long Beach proposal
and stating that the subsidiary must apply for a
certificate.

At the PUC, Morris said that although regulators had
not said they would delay the process, Mitsubishi
still had not filed an application with the
commission. "It's in their interest to apply sooner
than later," he said.

In its motion, the commission reports that thousands
of people live close to the proposed LNG terminal site
and that a number of institutions -- several schools,
the Queen Mary and the Aquarium of the Pacific -- are
within two miles.

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