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Long Beach Rejects LNG Plan, Says FERC Staff Withheld Information

With a legal opinion supporting the move, the Port of Long Beach Harbor Commission Monday decided to terminate an ongoing environmental assessment and reject a four-year-old proposal by Sound Energy Solutions (SES) to build a 1 Bcf/d receiving terminal for liquefied natural gas (LNG) in the harbor.

The $1 billion proposal has been floundering since mid 2006 with numerous delays in getting past the draft environmental review stage that began in late 2005.

A Long Beach city attorney has concluded that the environmental impact work will never result in a legally binding document, and the port does not appear to have any chance of coming to agreement with the project developers, Mitsubishi Corp. and ConocoPhillips.

Pointing a finger at the Federal Energy Regulatory Commission, which has been jointly conducting the environmental review for more than three years with the port, the city attorney said the prospective final environmental documents were "fundamentally flawed."

"We have no confidence that these flaws will ever be adequately remedied," said City Attorney Robert Shannon, whose conclusion accuses FERC staff of choosing to "defer certain environmental evaluations and to withhold certain critical information from the public."

In a statement posted on its website, the port city, which is 25 miles southeast of downtown Los Angeles, said, "After deliberation, based upon an opinion from Long Beach city attorney [Shannon], who concluded that the Environmental Impact Report (EIR) on the proposed LNG project 'is, and in all likelihood will remain, legally inadequate,' and since an agreement between Sound Energy Solutions (SES) and the city does not appear to be forthcoming, the Board of Harbor Commissioners disapproves the project and declines to pursue further negotiations."

Shannon also concluded that the port commissioners can reject the project at any time without the need to complete an EIR, which is the end result of the state process mandated by the California Environmental Quality Act (CEQA).

"The [proposed LNG terminal] EIR is flawed on two levels," Shannon said. "It fails to provide the [port board] with the comprehensive analyses and data necessary to make an informed decision, and it fails to provide necessary information to the public, most critically in the area of public safety and security, all as legally required by CEQA."

Shannon's written opinion listed five specific flaws: (1) lack of safety and security information; (2) nondisclosure of essential information (alleging FERC staff withheld significant safety analysis from the city of Long Beach; (3) inadequate analyses of alternatives, such as an offshore site; (4) improper deferrals of what the city attorney construed were critical performance standards for the operators of the proposed terminal; and (5) inadequate responses to comments on the draft EIR.

In a Dec. 13, 2006 letter from the project developers to newly elected Long Beach Mayor Bob Foster, the terminal proponents warned the city that it would be premature to abandon the proposed LNG project prior to finalizing the environmental reports. Shannon rejected this contention, and the harbor commissioners agreed with him.

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