Gov­er­nor ve­toes liq­ue­fied gas pro­posal

A plan for a ter­mi­nal off Mal­ibu is shelved on en­vi­ron­men­tal wor­ries.

Los Angeles Times - - Business - By Marc Lif­sher

sacra­mento — Gov. Arnold Sch­warzeneg­ger on Fri­day ve­toed a pro­posal to build a ter­mi­nal for im­port­ing liq­ue­fied nat­u­ral gas 20 miles off the coast of Mal­ibu, but he kept the door open for fu­ture LNG projects if they are en­vi­ron­men­tally sen­si­tive.

“Cal­i­for­nia needs to di­ver­sify fuel sources for Cal­i­for­nia con­sumers with cleaner al­ter­na­tives such as LNG,” the gov­er­nor said. “How­ever, any LNG im­port fa­cil­ity must meet the strict en­vi­ron­men­tal stan­dards Cal­i­for­nia de- mands to con­tinue to im­prove our air qual­ity, pro­tect our coast and pre­serve our marine en­vi­ron­ment.”

Sch­warzeneg­ger’s de­ci­sion, con­tained in a let­ter to the U.S. Mar­itime Ad­min­is­tra­tion, echoed ear­lier re­jec­tions from the state Lands Com­mis­sion and the Cal­i­for­nia Coastal Com­mis­sion of the pro­posal from BHP Bil­li­ton, an Aus­tralian min­ing and en­ergy gi­ant.

En­vi­ron­men­tal­ists and coastal res­i­dents in South­ern Cal­i­for­nia praised the gov­er­nor’s veto, while Bil­li­ton and Cal­i­for­nia busi­ness ad­vo­cates were dis­ap­pointed. Bil­li­ton said it had not de­cided whether to con­tinue to pur­sue the ter­mi­nal, which it calls Cabrillo Port.

The gov­er­nor’s let­ter ap­peared to ef­fec­tively kill Bil­li­ton’s ef­fort to gain a beach­head in

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[ Cal­i­for­nia’s lu­cra­tive en­ergy mar­ket. The com­pany has been work­ing on its $800-mil­lion port for four years and re­cently had been heav­ily lob­by­ing the gov­er­nor’s of­fice.

As re­cently as Fri­day, the gov­er­nor had voiced en­thu­si­asm for bring­ing tankers of su­per-chilled gas to Cal­i­for­nia from Aus­tralia, Africa, the Mid­dle East and South Amer­ica. He met with Aus­tralian Prime Min­is­ter John Howard about LNG im­ports in 2004, and, in past state­ments, Sch­warzneg­ger sin­gled out the Bil­li­ton project as his “per­sonal pref­er­ence” among sev­eral com­pet­ing LNG im­port plans.

But Sch­warzeneg­ger, a Hum­mer owner who has turned him­self into an in­ter­na­tional ad­vo­cate for com­bat­ing global warm­ing, ap­par­ently turned sour on Bil­li­ton’s ter­mi­nal af­ter en­vi­ron­men­tal re­views con­cluded that the project would harm marine mam­mals, ocean views and birds near Chan­nel Is­lands Na­tional Park and would con­trib­ute to smog and global warm­ing.

The Bil­li­ton plan gen­er­ated vo­cal op­po­si­tion from lo­cal gov­ern­ments in Los An­ge­les and Ven­tura coun­ties. It also trou­bled many of the gov­er­nor’s Hol­ly­wood friends with beach houses in the exclusive Mal­ibu Colony as well as mid­dle- and work­ing-class res­i­dents of Ox­nard and Port Huen­eme.

Mal­ibu Mayor Andy Stern said he ap­pre­ci­ated the sup­port of stars such as ac­tor Pierce Bros­nan and added that “the fact we had rich en­ter­tain­ers and peo­ple of not great wealth made the dif­fer­ence.”

In dozens of pub­lic meet­ings, coastal dwellers com­plained that a ter­mi­nal could cause en­vi­ron­men­tal harm and serve as a tempt­ing tar­get for a po­ten­tially cat­a­strophic ter­ror­ist at­tack.

Bil­li­ton spokesman Pa­trick Cas­sidy in Hous­ton stressed that his com­pany lis­tened to state and lo­cal con­cerns and worked dili­gently to “de­sign and re­design its project” since fil­ing its ter­mi­nal ap­pli­ca­tion in 2003.

Busi­ness lob­by­ists in Sacra­mento said they backed the Bil­li­ton pro­posal be­cause it would guar­an­tee Cal­i­for­nia a re­li­able source of af­ford­ably priced nat­u­ral gas to gen­er­ate elec­tric­ity for fac­to­ries, stores and homes. Dorothy Rothrock, a vice presi- dent of the Cal­i­for­nia Man­u­fac­tur­ers and Tech­nol­ogy Assn., said she was buoyed by the gov­er­nor’s gen­eral sup­port for im­port­ing LNG.

“We are con­fi­dent that LNG is a safe and clean al­ter­na­tive that will hope­fully come to Cal­i­for­nia soon,” she said.

The gov­er­nor’s re­jec­tion of Bil­li­ton leaves three other com­pa­nies in the race to build LNG ter­mi­nals off the coasts of Ven­tura and Orange coun­ties. A fourth, land-based plant, which could serve South­ern Cal­i­for­nia, is near­ing com­ple­tion in Baja Cal­i­for­nia, Mex­ico. In Jan­uary, Long Beach of­fi­cials dropped plans for an LNG ter­mi­nal pro­posed by Mit­subishi Corp. and Cono­coPhillips, cit­ing safety con­cerns.

Nat­u­ral gas, which burns cleaner than coal or other pe­tro­leum prod­ucts, cur­rently fu­els about half of all elec­tric­ity gen­er­ated in the state, in­clud­ing all re­cently built power plants. A state law, signed by the gov­er­nor last fall, bol­stered the de­mand for nat­u­ral gas by pro­hibit­ing the im­por­ta­tion of elec­tric­ity to Cal­i­for­nia by coal-fired, out-of-state power plants.

Some op­po­nents of the Bil­li­ton project say they don’t nec­es­sar­ily ob­ject to im­port­ing LNG, if it can be done in a safe and en­vi­ron­men­tally sen­si­tive way. Nev­er­the­less, they stress that be­fore it shifts to LNG, Cal­i­for­nia should fo­cus on con­ser­va­tion and try to sup­ply most of its fu­ture de­mand for elec­tric­ity through re­new­able power gen­er­a­tion from so­lar, wind and other non­pol­lut­ing sources.

“In the end, we may need some LNG, but from a pol­icy stand­point it should not be where we are putting all of our em­pha­sis,” said V. John White, ex­ec­u­tive di­rec­tor of the Cen­ter for En­ergy Ef­fi­ciency and Re­new­able Tech­nolo­gies in Sacra­mento.

White and other re­new­ableen­ergy ad­vo­cates are press­ing the Cal­i­for­nia Leg­is­la­ture and Sch­warzeneg­ger to ap­prove a bill that would di­rect state en­ergy reg­u­la­tors to study fu­ture de­mands for nat­u­ral gas, the need for LNG im­ports and which tech­nol­ogy and lo­ca­tion would be best for a ter­mi­nal.

“It’s com­mon knowl­edge that th­ese projects are stacked up one be­hind the other,” said Ox­nard Mayor Thomas Holden. “We have to look at the whole is­sue, how it re­lates to the state of Cal­i­for­nia and how it re­lates to Ox­nard.”

marc.lif­sher@la­times.com

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