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FERC Denies California's Plea for More Time to Assess Safety Risks of Terminal Project

December 12, 2005
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FERC last Thursday denied the California Energy Commission's (CEC) plea for a 30-day extension of the deadline to file supplemental comments on the joint federal-Port of Long Beach draft environmental impact report (EIR) addressing the concerns associated with a proposed liquefied natural gas (LNG) terminal to be sited in Long Beach harbor.

The CEC, the lead state agency on the project, last week requested the deadline extension so it could obtain non-public critical safety information from FERC to carry out a thorough review of the EIR on the proposed Sound Energy Solutions' (SES) LNG terminal to be built by a partnership of Mitsubishi Corp. and ConocoPhillips. CEC planned to base its supplemental comments on the non-public safety information.

"To keep our review processing moving..., we must have deadlines that encourage interested parties to focus on the issues in as timely a fashion as possible," FERC's Office of Energy Project (OEP) told lawyers for the CEC in a letter. FERC noted that it gave parties "more than 60 days" to comment on the joint EIR and draft environmental impact statement (DEIS), which was issued by FERC and the Port of Long Beach in October and was favorable to the LNG project (see NGI, Oct. 10). Comments were due at the Federal Energy Regulatory Commission last Thursday (Dec. 8).

The CEC has been negotiating with FERC staff for a "number of weeks" to acquire key safety information about the Sound Energy LNG project, but it refused to meet one of the Commission's conditions -- sign a nondisclosure agreement that would prohibit the CEC from sharing the information with the California governor and other state agencies.

The part of the EIR dubbed "Critical Energy Infrastructure Information" (CEII) has been at the center of the controversy because it includes specific details on the design of the proposed facility to be located at the Port of Long Beach, CA. The state agency claims that acquiring the nonpublic CEII documents is essential to assessing safety risks of the LNG project on California and localities. The CEC, still refusing to comply with FERC's requirement to sign a nondisclosure agreement, has yet to file a formal request for the CEII documents.

For security reasons, FERC withdrew all information related to energy infrastructure systems from its public website following the terrorist attacks on Sept. 11, 2001. The Commission, however, has established a procedure for the public to obtain certain critical information, which requires that they agree to sign nondisclosure documents.

"We will make every effort to consider all comments received [at FERC], including those filed outside of the comment period. The input from the CEC is very important to us as we conduct a thorough analysis of the project issues and will not be ignored," said OEP Director J. Mark Robinson.

In comments filed at FERC, the California Public Utilities Commission (CPUC) said the DEIS/EIR was "incomplete and should be redrafted and re-circulated for comment." The California regulators also asked FERC to grant its pending motion, filed in October, for an evidentiary, oral hearing to address a "dispute [over] material facts on the safety of the proposed LNG import terminal and...issues involving SES's credibility."

The proposed terminal at the Port of Long Beach "would be in a densely populated, urban area, and would pose a risk to the health and safety of the approximately 130,000 people living, working or visiting in the area within approximately three miles of the proposed site," the CPUC told FERC.

"There are pending proposals for LNG terminals more than 10 miles offshore, which do not pose such risks to the general public onshore. Consequently, under the applicable federal and state statutes, which center on protecting the safety of the general public and environment, SES's proposed project should be rejected," the agency said.

The DEIS/EIR "does not look at the big picture, and attempts to downplay the hazards and environmental effects, as part of its justification for approving SES's proposed LNG import terminal at the Port of Long Beach. The DEIS/EIR starts with an inadequate description of the project, which is, in part, the result of deliberate conduct by SES to withhold from the public and the government information about the facilities. The DEIS/EIR significantly underestimates the distances at which people could receive second-degree burns or worse from an LNG pool fire," the CPUC charged.

Three California groups -- California for Renewable Energy, Coalition for a Safe Environment and Long Beach Citizens for Utility Reform -- asked FERC to stay all pending and future LNG siting proceedings affecting populated areas until it acts on two of the groups' requests.

First, the groups are seeking a "programmatic review" under the National Environmental Policy Act (NEPA) of the narrow issue of LNG siting in populated areas with particular attention to reconciling conflicts between federal, state and local safety concerns and between NEPA and state environmental statutes. Secondly, they have requested a joint agency hearing and rulemakings regarding standards for LNG siting in populated areas.

"Petitioners believe LNG importation in populated areas constitutes new federal activity that begs programmatic NEPA review of the narrow question of human health impacts associated with LNG fires and explosions," the groups said. "Because LNG terminal siting in populated areas has not undergone past NEPA review, only recently became an exclusively federal prerogative and involves safety issues that are contested between federal and lower branches of government, it is essentially a new federal activity that begs policy formulation," they noted.

"We find numerous inconsistent and/or ignored Congressional Research Service recommendations but no record of any recent Council on Environmental Quality reports regarding environmental impacts of LNG importation or siting. We find nothing in the FERC's and related agencies' recent public statements...that suggest general environmental or specifically urban siting concerns have figured in current policy. We find nothing in recent certificates or open applications that suggest the FERC considers population density when it accepts applications." The DEIS/EIR on the proposed Sound Energy project "details no population density standards, save existing land-based thermal radiation standards, and omits mention of open petitions for rulemakings or hearings regarding this issue."

The California Coastal Commission also submitted voluminous comments to FERC on the LNG project last Thursday. The comments were highly critical of the DEIS/EIR on the Sound Energy LNG project, as were those of most California parties. "The analysis of public safety in the draft EIS/EIR is inadequate; it fails to disclose worst-case impacts as required" by the California Environmental Quality Act, the coastal agency said.

"The approach in the reliability and safety analysis is essentially qualitative with no quantitative [significant] criteria or comparison of potential impacts to any measurable level of risk. The reliability and safety section also intentionally excludes any analysis of large, credible accidents that would have the potential to adversely affect the public."

The coastal commission contends that "no valid conclusions can be reached regarding the project's potential impacts on public safety when a majority of [LNG] release scenarios are summarily dismissed from any serious analysis." At best, it said that any conclusions on the public safety would be "highly qualitative and speculative."

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