The American Gas Association Tuesday filed with FERC to intervene in its heated liquefied natural gas (LNG) jurisdictional case, noting that its 192-member local utility companies deliver more than 80% of the nation’s natural gas supplies distributed directly to end-users. AGA noted that jurisdictional disputes will only “serve to delay” terminal development and construction.
AGA said it sought a late intervention because of what it called “the important findings” in the Federal Energy Regulatory Commission’s March 24 ruling asserting exclusive jurisdiction in the proposal by Mitsubishi Corp.’s U.S.-based subsidiary, Sound Energy Solutions (SES), to build and operate a 1 Bcf/d LNG receiving terminal on part of a closed U. S. Naval Base in Long Beach Harbor, about 25 miles southeast of downtown Los Angeles.
“In the future, LNG will play an increasingly important role in meeting the United States’ growing demand for natural gas,” the AGA filing said, adding that current LNG annual consumption (240 Bcf) could triple in the next few years and eventually reach 3 Tcf annually in 2010.
Given the growing role of LNG and the extensiveness of AGA’s distribution gas utility members, the trade association argued that no other party can adequately represent its members’ interests in the ongoing proceeding, for which the California Public Utilities Commission filed a motion for rehearing with FERC late Friday (see Daily GPI, April 27).
The CPUC stressed that it recognizes LNG as a viable option that eventually could serve parts of the state’s strongly gas-dependent energy market in announcing its filing late last Friday. But it requested a rehearing of FERC’s March 24 ruling asserting exclusive jurisdiction. The 90-page filing articulated a classic state rights battle that is as old as the nation.
Proponents of the Long Beach terminal and the CPUC agree that the supplies that will come through the terminal are not destined for interstate commerce, and the federal commission’s authority over “natural gas facilities” is centered on those involved in “interstate commerce,” the CPUC’s filing said. Therefore, it argued that California must be granted its Congressional-mandated authority to protect the safety of its citizens.
“In the two most pertinent federal statutes involving safety, Congress has explicitly provided savings clauses, which allow states to impose safety requirements for intrastate facilities beyond the minimum federal safety standards,” the CPUC filing said, focusing on Section 3 of the Natural Gas Act. The CPUC contends that FERC erroneously relies on a 30-year-old Distrigas case, noting that Congress amended the act more recently (1992) to restrict FERC’s authority.
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