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Feinstein Seeks to Give State Governors Veto Power over Federal LNG Siting Decisions

Sen. Dianne Feinstein (D-CA) is expected to offer an amendment Wednesday morning that calls for concurrent federal and state jurisdiction over liquefied natural gas (LNG) terminals, both offshore and onshore.

Specifically the amendment, if adopted by the Senate as part the broader energy bill (HR 6), would give state governors the same authority to veto, approve or attach conditions to onshore LNG terminals as they currently have for offshore LNG facilities. Governors would have 45 days to act on an LNG project after the Federal Energy Regulatory Commission issues a final environmental impact statement.

The measure will be co-sponsored by key senators representing states along the East and West Coasts, as well of the Gulf of Mexico.

Feinstein and other coastal senators are seeking to change a provision in the energy bill that would give FERC exclusive authority over the siting of LNG terminals in the United States. "To give a remote federal agency control when states are concerned about the safety of residents near a proposed site is a mistake," she said in a prepared statement.

The amendment would not require project developers to file duplicate applications with states, nor would it increase the money or time required in the application process, according to Feinstein.

"I recognize the probability that at least one or perhaps more new LNG facilities will be placed either onshore or off the coast of California," she said. California Gov. Arnold Schwarzenegger, the California Public Utilities Commission and the California Energy Commission all agree that the state needs new natural gas supplies and that LNG terminals may help put downward pressure on escalating gas prices, Feinstein noted.

But "we disagree on how to accomplish the goal of bringing LNG terminals online." Sen. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, and Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the Senate energy panel, believe that FERC should have the final say over the siting of LNG terminals, she said. But Feinstein noted that she sided with coastal states that believe the states should have concurrent jurisdiction with FERC.

"Under the pending energy bill, [a] governor would have no veto authority for siting onshore LNG terminals. In other words, if the governor of California were to decide that an LNG terminal posed too great a safety risk to the 400,000 people living close to the Port of Long Beach, the only proposed onshore project in California, then the governor would have no authority to veto that project. But if that same project were located offshore more than three miles away from the port, the governor would be able to veto it," Feinstein said.

She said her amendment would provides states with "real veto authority if a project were to violate the state's environmental protection, land and water use, public health and safety, and coastal zone management laws."

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