California regulators and FERC have quietly resolved their nearly 20-month long dispute over who has “exclusive jurisdiction” over a planned liquefied natural gas (LNG) terminal for the Port of Long Beach, CA.
With the enactment of the omnibus energy bill in early September, “both FERC and the CPUC [California Public Utilities Commission] have agreed in very recent pleadings filed with the Ninth Circuit that the CPUC’s jurisdictional issues were rendered moot,” CPUC attorney Harvey Y. Morris revealed in a motion filed at FERC on Tuesday [CP04-58].
“Since the CPUC is no longer contesting the FERC’s authority to preempt the CPUC’s jurisdiction, the CPUC acknowledges that it does not have decision-making authority over the siting of [the] proposed project.”
The action brings to a close a contentious battle that began in early 2004 when the Federal Energy Regulatory Commission claimed it had sole jurisdiction under Section 3 of the Natural Gas Act over the siting, construction and operation of the import terminal proposed by Sound Energy Solutions, a U.S. subsidiary of Japan’s Mitsubishi Corp.
California regulators challenged the federal agency’s decision at FERC, but the Commission did not relent. The CPUC appealed the case in the U.S. Court of Appeals for the District of Columbia Circuit, with the case later transferred to the U.S. Court of Appeals for the Ninth Circuit in California. Congress then jumped into the fray by clarifying in the broad energy bill that jurisdiction over new LNG terminals rested with FERC.
Although the CPUC has conceded the jurisdictional issue, the state agency has by no means given up its fight to have the planned LNG terminal relocated to a remote site in the state as opposed to the Port of Long Beach.
California regulators submitted supplemental evidence identifying potential safety risks associated with the Sound Energy project in their latest motion. The CPUC, based on this evidence, asked FERC to reject Sound Energy’s application to locate the LNG project near a densely populated area surrounding the port, arguing that it was “contrary to the public interest.” In the alternative, it urged FERC to schedule an evidentiary hearing into the matter.
“The CPUC recognizes the need for new LNG terminals along the West Coast in order to ensure sufficient supplies of natural gas, as well as to help put downward pressure on the price of natural gas,” the agency said, but the “evidence accompanying this motion establishes that approximately 130,000 people living or working within three miles of the proposed site at the Port of Long Beach would be in harm’s way, and many of them could be killed or incur second-degree burns if there were a terrorist attack, earthquake or human error, which caused the release of LNG.”
Moreover, “there is vital infrastructure that could be destroyed at the Port of Long Beach if LNG were released at or near the proposed site. This potential disaster can be and must be prevented,” the CPUC said.
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