Backers of the state's most advanced proposal to build an offshore liquefied natural gas (LNG) terminal stormed into a California State Lands Commission hearing in Oxnard, CA, Monday, touting 18 potential large buyers of its supplies along with nearly 100 groups supporting its Cabrillo Port Project, 14 miles offshore Southern California between Malibu and Oxnard in Ventura County.

With a final environmental impact statement and report (EIS/EIR) documenting certain problems that cannot be totally mitigated, the state agency must grant a lease for state-land-crossing portions of a 21-mile subsea gas pipeline that would bring supplies ashore. The California Coastal Commission will hold a separate hearing Thursday on the narrow question of whether the proposed LNG terminal violates state or federal coastal protection laws.

More than 250 local elected officials and citizens turned out at a U.S. Coast Guard hearing earlier in April with the majority opposing the $550 million, 800 MMcf/d project proposed by a unit of Australian resources company BHP Billiton (see Daily GPI, April 9). The Coast Guard, the U.S. Maritime Administration (MARAD) and State Lands Commission jointly completed the EIS/EIR.

Although it cited confidentiality regarding most of the specific organizations, BHP announced last Friday it has received nonbinding letters of interest to buy supplies from its LNG terminal from "18 large natural gas consumers and gas consumer groups" that had expressed interest in acquiring some of the potential Australian gas supplies.

BHP called Las Vegas-based Southwest Gas Corp. "one of the largest municipal utilities in California," and and said members of the California Independent Petroleum Association are among the 18 parties expressing interest in supplies from Cabrillo Port.

"[We] will be working with each interested party to meet customer-specific requirements once the project has final regulatory approval to ensure that commitments do not exceed Cabrillo Port's capacity," said BHP spokesperson Kathi Hann. The terminal proponent said the letters of interest demonstrate support for the development of more natural gas supply sources for the region.

In addition, BHP sent out a small blizzard of news media announcements Friday and Saturday to reinforce the support it has for its project, including an alliance of 12 major chambers of commerce in Ventura and Santa Barbara counties and 75 citizen/business organizations and finally, various state energy planning documents, including the Energy Action Plan, which cites the need for additional sources of natural gas, including a West Coast LNG terminal.

BHP takes the liberty of quoting the president of the California Public Utilities Commission, Michael Peevey, who wrote in a Dec. 12, 2006 letter to the coastal commission that the state's Integrated Energy Policy Report articulates the need for additional sources of natural gas, including LNG.

Californians for Clean Affordable Safe Energy (Cal-CASE) is a coalition the LNG developer put together, including taxpayer, education, local government, agriculture, electric utilities, chambers of commerce and consumers groups. Similarly, the 12-chamber Regional Legislative Alliance (RLA) has spoken up in support of the Cabrillo Port project. Representatives from these groups were expected to testify at the state lands commission hearing.

"RLA's board and membership are simply recognizing the tremendous value proposition Cabrillo Port represents to our community and to our state," BHP's Hann said.

In a letter dated April 5 to the lands commission, the Cal-CASE coalition said that while it supports conservation and efficiency programs along with more renewable energy use, the state "needs additional supplies of clean-burning natural gas," calling LNG importation "the cleanest, safest and most economical way to increase this supply."

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