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Long Beach Council Votes 5-4 to Continue LNG Talks

Before a packed chamber split about equally between opponents and supporters, the Long Beach, CA, City Council just past midnight Wednesday morning voted 5-4 to continue discussions with proponents of a liquefied natural gas (LNG) receiving terminal in the city's harbor. As a result, the city municipal energy department will resume talks that were cut off more than a year ago for a pipeline and LNG supplies from the proposed plant for the city's natural gas distribution utility.

In an added move, the city council also launched its own "risk and hazard assessments" for a proposed LNG terminal to be completed "as soon as possible," although the details of who would oversee the studies and who would do them was not readily apparent at the conclusion of a marathon seven-hour council meeting, the last three hours of which were consumed by the LNG issue.

The city's actions are separate from ongoing development of a joint environmental impact report (EIR) by the Port of Long Beach and the Federal Energy Regulatory Commission, the two actionable agencies on the proposal by a joint venture of Mitsubishi Corp. and ConocoPhillips, Sound Energy Solutions (SES), to build and operate a $400 million LNG receiving terminal in the harbor.

City officials indicated that the city energy department that operates the gas utility, supplies electric power to the city's local government facilities and oversees municipal water-related operations will re-start talks with SES under a memorandum of understand (MOU) that the city signed in May 2003.

That MOU involved two parts, according to Chris Garner, general manager of Long Beach's muni: a long-term gas supply contract and separate 2.5-mile natural gas pipeline connecting the LNG terminal to Southern California Gas Co.'s backbone transmission system. Garner said he intends to restart talks with SES immediately with the hopes of having contracts for the city council to consider in September, the same time the draft EIR is due out from the Port of Long Beach.

Separately, the port has its own ongoing talks with SES concerning a lease the property for the terminal site. Under that MOU, the potential site is kept open for SES's potential use through June of next year, and the lease is contingent upon the city having inked a contract with SES for supplies and the construction of the interconnecting pipeline, Garner said.

Three city council members already publicly have opposed siting a LNG receiving terminal in their harbor and pushed the council to vote at its Tuesday night meeting, hoping to send an early signal to the independent harbor commission that the city's elected officials are against the port granting SES a lease for the LNG terminal site. By the narrowest of margins that did not happen, although a majority of the city council members expressed strong safety concerns about the proposed facility during two hours of rambling discussion.

Technically, the focus of the vote was on the city's potential contract for supplies from the proposed facility. The city elected officials' vote is separate from ongoing permit work being done jointly between the Port and FERC. Two other council members suggested that the city council wait to give its opinion on the proposed facility until this fall when a joint FERC-port EIR is released, and a variation of their motion ultimately prevailed.

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