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Markey Blasts LNG Provisions in Energy Bill, Says States Rights Being 'Trampled'

Representative Edward J. Markey (D-MA) said Friday he plans to offer an amendment in the next week to strike language from the House version of the energy bill that would give the Federal Energy Regulatory Commission exclusive authority to regulate liquefied natural gas (LNG) import terminals. House Energy and Commerce Committee Chairman Joe Barton announced Friday that he will hold a full committee markup of the bill beginning Tuesday.

"As concern for terrorism increases, it is startlingly short sighted for the Republican Party to trample states' rights on behalf of the gas industry," Markey said in a statement. "This provision directly undermines the ability of state and local officials to play their proper role in ensuring that any new LNG facility is not sited in an area where it could pose a danger to the surrounding community." Markey cited the Sandia Laboratory report released in December 2004, which concluded that a terrorist assault on an LNG tanker could cause a fireball that would cause second degree burns on people 1.3 miles away. The study was commissioned by the Department of Energy.

"It's bad enough that FERC and the Transportation Department have largely ignored the intention of my 1979 law directing that all new LNG terminals should be remotely sited, and that the FERC has arrogantly asserted that it has exclusive authority over LNG siting in pending litigation over the proposed Long Beach California LNG terminal. But this new legislation would appear to effectively decide the California litigation in favor of the FERC's position, while simultaneously preventing other states or local governments from preventing new LNG terminals from being put in places that might pose a threat to public safety."

The California Public Utilities Commission (CPUC) has challenged FERC's claim of exclusive jurisdiction over LNG terminal siting and regulation in federal court. The CPUC claims that it has exclusive jurisdiction over the Long Beach LNG terminal, proposed by Sound Energy Solutions and ConocoPhillips. Two gas industry associations on Monday filed a "friend of the court" brief in support of FERC's jurisdictional claim (see related story).

Markey said if the energy bill passes in its current form his state of Massachusetts and the City of Fall River would have little chance of preventing Poten & Partners and Amerada Hess from building the Weaver's Cove LNG terminal. "Dozens of other communities would be put in the same position," he said.

In fact, local opposition has been enough to block numerous LNG projects from getting off the ground. Three projects in Maine have been shot down, two more near Mobile, AL, and at least two others in California.

Markey said under the new language in the energy bill, if states failed to meet FERC's deadlines for action, they would be "conclusively presumed" to have approved the site for a new LNG terminal. While the proposal requires FERC to "consult" with state and local governments about safety considerations, FERC would be free to disregard concerns raised by states and local governments if it chooses to do so.

"This is a terrible piece of legislation," Markey said.

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