Undaunted by the jurisdictional fight between California and FERC over the siting of liquefied natural gas (LNG) facilities, the lead executive for Mitsubishi Corp.’s efforts to build a LNG terminal in Long Beach Harbor said Wednesday that his firm is pushing ahead with environmental reviews at the federal agency after filing last week for a rehearing of a state regulators’ attempt in April to force the project under state regulatory oversight as a “public utility.”

In addition, Sound Energy Solutions (SES), the U.S.-based Mitsubishi company pursuing a 1 Bcf/d receiving terminal in the Port of Long Beach, has by Executive Vice President Tom Giles’ assessment been “busy out in the community” conducting a series of three to four meetings weekly, attempting to assuage concerns that have grown this year since the incident that killed 27 people at a LNG liquefaction facility in Algeria. Giles said Wednesday in a brief interview with NGI that his company is making progress with both individuals and groups of concerned citizens.

Meanwhile, SES is in the midst of the environmental review process involving both the Federal Energy Regulatory Commission and California Environmental Quality Act (CEQA) requirements. “We’re dealing with normal application issues, clarifying and answering questions,” said Giles, noting that the FERC-CPUC jurisdictional issue “has its own life” in a regulatory/legal sense, with the CPUC currently asking the federal regulators to reconsider its ruling of absolute jurisdiction.

As part of a speech last week, FERC Chairman Patrick Wood indicated that the regulatory commission will act soon on the rehearing request (see NGI, May 31). Ultimately, Wood said the courts will have to resolve the issue.

“We’re proceeding with other things while all of the other stuff is ongoing,” Giles said. “FERC still has to rule on the CPUC motion for rehearing, and the CPUC has to rule on our motion for rehearing. These are procedural issues.” On the jurisdictional issue, Giles said there is “no dialogue going on,” unless it is between the CPUC and FERC. “It is not between us and them.”

The citizen “dialogue” sessions in Long Beach are going “extremely well,” according to Giles, who said SES went to see various local leaders asked them who in “different parts of the community we should talk to, and some of those people in turn have asked us to meet with their associations. We’re out there doing it — all over town.”

On April 22, the CPUC unanimously instituted an investigation of the proposed Long Beach LNG receiving terminal, including the determination that SES is a “public utility” under California law and must gain CPUC certification to build the facility. In taking its action, the state regulatory panel appeared to differentiate between a terminal and the company proposing to build the facility.

CPUC President Michael Peevey and his four colleagues who are rarely in agreement on major energy issues all were critical of FERC and SES for ignoring the state’s claims of jurisdiction and what Peevey called an “extended hand of cooperation.”

CPUC attorney Harvey Morris, a veteran litigator before FERC, told the five CPUC commissioners that there is “no question” the SES is a “public utility under California jurisdiction.” After a number of meetings with the company dating back to last fall, Morris said it is clear that SES “has no intention” of filing an application for certification of its proposed LNG receiving terminal that is slated to process up to 1 Bcf/d of LNG and put imported supplies into the Southern California Gas Co. transmission pipeline system at a point 2 or 3 miles from the port site on part of a former U. S. Naval Base.

Morris indicated that with CPUC 5-0 vote for the so-called OII (order instituting investigation), the state regulatory panel will now proceed with a “formal proceeding requiring SES to apply for a certificate of public convenience and necessity, if it plans to pursue this project in the Port of Long Beach. Otherwise, if it begins construction, it will be contrary to state law.”

While saying that he thinks LNG imports — along the California or North Baja, Mexico coast — would be beneficial to the state, Peevey said the question that “has not been answered to my satisfaction” is where to site the receiving terminal(s). “In my view safety is paramount. He said most of the current proposed LNG facilities in the West are “sited offshore or located away from population centers,” except for SES’s proposed LNG terminal.

Peevey said FERC’s March 24 jurisdictional order attempted to “divest California of any decision-making” in regard to LNG. He called FERC’s action “strident determination that has summarily excluded” other California agencies, such as the coastal commission and regional air quality organization. As such, he said that both the California Coastal Commission and the four-county South Coast Air Quality Management District, in which Long Beach falls, will be intervening in the FERC jurisdictional case.

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