Noting that it recognizes liquefied natural gas (LNG) as a viable option that eventually could serve parts of the state’s strongly gas-dependent energy market, the California Public Utilities Commission late last Friday filed a request for rehearing of FERC’s March 24 ruling asserting exclusive jurisdiction over a proposed LNG receiving terminal in Long Beach Harbor.
The 90-page filing articulates a classic state rights battle that is as old as the nation.
Proponents of the Long Beach terminal and the CPUC agree that the supplies that will come through the terminal are not destined for interstate commerce, and the federal commission’s authority over “natural gas facilities” is centered on those involved in “interstate commerce,” the CPUC’s filing said. Therefore, it argued that California must be granted its Congressional-mandated authority to protect the safety of its citizens.
“In the two most pertinent federal statutes involving safety, Congress has explicitly provided savings clauses, which allow states to impose safety requirements for intrastate facilities beyond the minimum federal safety standards,” the CPUC filing said, focusing on Section 3 of the Natural Gas Act. The CPUC contends that FERC erroneously relies on a 30-year-old Distrigas case, noting that Congress amended the act more recently (1992) to restrict FERC’s authority.
“The FERC has committed numerous legal errors in its March 24 order because it cannot override Congress’ limitations upon the FERC’s delegated authority under the Natural Gas Act (NGA), and the FERC cannot defy the purpose and the plain meaning of the language in the NGA,” the CPUC said.
The CPUC maintained in its Friday filing that the FERC needs to grant a rehearing because the federal regulators’ March 24 action was “contrary” to the NGA, “numerous other federal statutes, and the constitutional rights of the State of California.”
“Even if the FERC has authority to condition authorization of [Mitsubishi Corp.’s Sound Energy Solutions’, or SES’s] imports with requirements as to its facilities, the FERC cannot use its conditioning authority to preempt the CPUC’s jurisdiction,” the California regulatory commission’s attorneys, led by senior attorney Harvey Morris, argued. The CPUC attorneys zeroed in on five arguments in making its case to FERC:
The CPUC’s filing attempts to make the case that there are “significant” safety issues related to the SES proposed LNG receiving terminal site, and that “siting and safety issues” are “wholly” within the state’s purview.
“The Port of Long Beach is built on landfill that could be affected by substantial ground motion caused by up to 27 different active earthquake faults,” the CPUC argued. ” SES’s resource report (No. 6 at 11) states ‘The combination of high seismicity, shallow groundwater conditions and weak hydraulic fills with predominantly sandy and silty soils results in a significant potential for liquefaction at the LNG terminal site’.”
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