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Attempt to Repeal FERC LNG Authority Comes Under Fire

The Natural Gas Council (NGC), which includes the major gas associations in Washington, DC, last Wednesday said it opposed Democratic legislation that would strip FERC of its existing authority to review, approve and site liquefied natural gas (LNG) import terminals.

Six Senate Democrats introduced legislation (S. 3056) last Tuesday to repeal Section 311 of the Energy Policy Act of 2005 (EPAct), which gave the Federal Energy Regulatory Commission (FERC) the authority to determine the need for and location of LNG facilities (see NGI, April 22, 2005).

"Natural gas infrastructure of national importance [such as LNG terminals] needs a national focus when it comes to approval, siting and regulation. The balkanization of the natural gas industry is a terrible idea," said Donald F. Santa Jr., president of the Interstate Natural Gas Association of America, one of the members of the NGC. Other members include the American Gas Association, the Independent Petroleum Association of America and the Natural Gas Supply Association (NGSA). The Center for Liquefied Natural Gas is an associate member.

EPAct "clarified that the federal government should have final say on the approval and siting of natural gas facilities engaged in interstate and foreign commerce. [At the same time] states continue to have a role in the permitting of LNG facilities through such statutes as the Coastal Zone Management Act, the Clean Air Act and the Clean Water Act, and they have the authority to block a specific LNG facility under existing law. Overall approval and siting of these facilities...should remain the exclusive authority of the federal government," said NGSA President R. Skip Horvath.

Before EPAct was signed into law, issues affecting LNG facilities had historically been decided by siting agencies in individual states, according to the sponsors of the legislation. The sponsors are Sens. Ron Wyden of Oregon, Chris Dodd of Connecticut, Maria Cantwell of Washington, Barbara Mikulski of Maryland, Ben Cardin of Maryland and Jeff Merkley of Oregon.

The senators have been openly opposed to LNG projects that have been approved by FERC or are still pending before the agency in their home or neighboring states, including the AES Sparrows Point proposed LNG important terminal in Baltimore County, MD; the Weaver's Cove LNG facility proposed for Fall River, MA; NorthernStar Natural Gas Corp.'s Bradwood Landing LNG terminal proposed along the Columbia River in Oregon; and the Jordan Cove LNG terminal, also proposed for Oregon.

"Oregonians have said time and again that they don't want some federal agency 3,000 miles away forcing LNG terminals on them. I'm not going to stop until Oregonians get to decide whether or not they need LNG terminals and, if they do, where to put them," Wyden said.

"I am adamantly opposed to an LNG facility at Sparrows Point, and deeply disappointed by FERC's response to it. I found FERC all too eager to rubber stamp the project despite the significant and very real concerns of Baltimore residents and the state of Maryland," Mikulski said.

"FERC has totally disregarded the safety risks of locating a LNG facility in a densely populated urban area or what the substantial upgrades to security would entail," Cardin added.

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