The issue of who has jurisdiction over new liquefied natural gas (LNG) terminal facilities — the federal government or the states — will be the focus of a House subcommittee meeting next week.

The House Government Reform Committee’s subcommittee on Energy Policy, Natural Resources and Regulatory Affairs will tackle next Tuesday the thorny issue, which has arisen as a result of a jurisdictional dispute between FERC and California over an LNG terminal planned for that state.

Expected to appear before the panel are FERC Chairman Pat Wood; Donald Santa, president of the Interstate Natural Gas Association of America; a representative of the U.S. Coast Guard; California parties; and possibly a representative from the National Oceanic and Atmospheric Industries.

The jurisdictional controversy is an issue that will be decided in the “courts or in Congress, or maybe both,” said a natural gas legislative expert. He believes that Rep. Lee Terry’s (R-NE) bill, which would place jurisdiction for the siting and construction of LNG terminals solely with FERC, “stands a good chance of being introduced in the Senate.” Terry’s bi-partisan measure was introduced in the House in May (see Daily GPI, May 21).

Last week, the Federal Energy Regulatory Commission upheld a March order in which it asserted “exclusive jurisdiction” over the planned LNG terminal for the Port of Long Beach, CA, that is being sponsored by Sound Energy Solutions, a U.S. subsidiary of Japan’s Mitsubishi Corp. This facility is at the center of the ongoing dispute between the federal and state energy regulators. The California Public Utilities Commission has 60 days to appeal the decision in federal court.

The “state and local authorities want more authority to say ‘no’ [to the projects]…scare off a lot of development,” said the legislative analyst. Already LNG projects in Alabama and several in New England have been halted, and “all of them in California are in jeopardy,” he noted.

The states “[shouldn’t] complain about…natural gas prices if [they] don’t want to fix the problem.”

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