A resolution of the pending litigation by proponents of a Long Beach, CA, liquefied natural gas (LNG) terminal is still months away, the city attorney told NGI Wednesday. More imminent would be further legal action once the City of Long Beach, as expected, rejects a claim by LNG developer Sound Energy Solutions (SES), which is seeking payment for costs incurred in the three-year permitting process that came to a halt in January.

SES filed the multi-million-dollar claim with the city, and filed a writ of mandate in a California Superior Court in Los Angeles asking the court to force the city and the Port of Long Beach to complete a joint federal/local environmental review process (see Daily GPI, Feb. 12).

"I don't expect that there will be any news on that item [EIR completion issue] for a good couple of months," said Bob Shannon, Long Beach city attorney.

Under California law, the city had 45 days to accept or reject SES' claim, and that time is about to run out, Shannon said. After 45 days, the claim is automatically denied. "You would be well advised to assume we are going to reject the claim," Shannon said. "They then have six months after that to file a lawsuit."

In its February actions, SES not only sought reimbursement from the city and a resumption of the final EIR process, but it filed with the Federal Energy Regulatory Commission (FERC) in response to an opponent's filing to notify the federal regulators, which shared the environmental review responsibility, that the terminal proponents expect to get the environmental work completed. SES has said it expects to be vindicated before the Port of Long Beach Harbor Commission.

SES CEO Tom Giles would not speculate on when the environmental process might be completed. However, he said that the company assured FERC it is still actively engaged in the permitting process. "We believe the harbor commission erred in unfairly abandoning work on the EIR without providing a full accounting of all information to the public," Giles said.

In January SES was spurned by a harbor commission board that refused to complete several years of environmental review work, prompting a filing in state court. Giles said he was confident the company eventually would get the writ.

In a writ of mandate, SES, a joint venture of Mitsubishi and ConocoPhillips, asked the court to order the harbor commissioners to complete the environmental impact report (EIR) on SES' proposed $800 million, 1 Bcf/d receiving terminal.

With a legal opinion supporting the move, the Port of Long Beach Harbor Commission on Jan. 22 terminated the long-ongoing environmental assessment, rejecting a four-year-old SES proposal. The nearly billion-dollar proposal had been foundering since mid-2006 with numerous delays in getting past the draft environmental review stage that began in late 2005. Finally, the Long Beach city attorney concluded that the environmental impact work would never be in a legally binding document.

Giles said SES now wants the court to force the harbor commission to direct the Port of Long Beach staff to complete the EIR process as required under the California Environmental Quality Act (CEQA). Otherwise, SES argued that the harbor oversight board's action will "set a precedent with statewide implications" for other projects examined under CEQA.

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