Energy firm mulls future after vote

As environmentalists cheered a state agency’s rejection of its project, Australian energy giant BHP Billiton was left scrambling Tuesday for a way to salvage its plans to build an $800-million natural gas processing plant off the Ventura County coast.

The state Lands Commission’s decision late Monday night dealt the project a potentially fatal blow, denying the energy company permission to construct a pair of pipelines to move natural gas onshore in Oxnard from its terminal 14 miles off the Ventura and Los Angeles county border.

“We’re disappointed in the decisions by the state Lands Commission,” said Renee Klimczak, president of BHP Billiton LNG International Inc. “We’re evaluating our options and next steps.”

The commission, in a 2-1 decision split along partisan lines, voted against the project after an all-day public hearing in Oxnard that drew more than 2,000 people, from Oxnard homemakers and environmental activists to actor and Malibu resident Pierce Brosnan.

Democratic Lt. Gov. John Garamendi and State Controller John Chiang, who sit on the commission, voted against the project after they concluded that its environmental impact report was seriously flawed and that California did not need a liquefied natural gas terminal. The crowd responded with cheers.

“The significant and unmitigated environmental impacts this project could have on California’s environment and its residents outweigh any economic benefit it might generate,” Garamendi said.

Paul D. Thayer, executive officer for the California State Lands Commission, said BHP Billiton has few options to overturn the decision.

“They will have to go to court,” Thayer said. “Or, theoretically, they could change the project, but that would be difficult and probably involve a whole new process. There is no administrative remedy and no appeal available.”

Under the law, Gov. Arnold Schwarzenegger has until May 21 to decide on the project, though he cannot overturn the commission’s decisions or those by other state agencies. The governor has not officially endorsed the BHP Billiton project, but his delegate on the state Lands Commission cast the one favorable vote.

Schwarzenegger has expressed strong support for a liquefied natural gas terminal for California and he has in the past expressed a “personal preference” for the BHP Billiton project.

“Natural gas is the cleanest-burning fossil fuel and a LNG facility to serve our state would make California less vulnerable to variations in supply and price,” Schwarzenegger said in a prepared statement Tuesday.

Despite this week’s setback, BHP Billiton pledged to continue seeking approval from other agencies. The project, called Cabrillo Port, consists of a 971-foot-long moored ship that would process about 800 million cubic feet of liquefied natural gas daily for Southern California homes and businesses. California gets about 40% of its electricity from natural-gas burning power plants.

But the path ahead for Cabrillo Port doesn’t get any easier. On Thursday, the California Coastal Commission will hold a public hearing in Santa Barbara to determine whether to certify the environmental impact report and decide if the project is consistent with state and federal coastal protection laws. The commission’s staff is recommending against the project.

Although natural gas is the cleanest-burning fossil fuel and is favored under California’s stringent air pollution laws, a number of proposals for development of liquefied natural gas processing plants have encountered opposition unforeseen four years ago when they were proposed.

The BHP Billiton project is the second in four months to be rejected. Long Beach officials dropped plans for a LNG terminal by Mitsubishi-ConocoPhillips in January after they concluded that the harbor project posed unacceptable safety risks. Three more offshore projects have been proposed for the coast between Long Beach and Santa Barbara, and another is under construction near Ensenada in Baja California, Mexico.

Cabrillo Port galvanized a peculiar opposition alliance of Malibu celebrities and Oxnard working-class families. Environmentalists -- who have been fighting energy development on the California coast since a Union Oil Co. petroleum drilling platform blowout in 1969 caused a major oil spill off Santa Barbara -- helped hold the opposition together.

“This is the biggest organized effort to address an issue that I’ve ever seen,” said Ventura County Supervisor John Flynn, whose district includes Oxnard. “About 80% of my constituency is non-white, and the Hispanics were better organized than I’ve ever seen on an issue.”

Meanwhile, Schwarzenegger and lawmakers have approved a raft of new legislation to limit greenhouse gases, promote energy conservation and spur wider use of alternative fuels and technology. Last year, California became the first state with a comprehensive strategy to reduce greenhouse gas emissions by 25% by 2020.

During Monday’s hearing, Garamendi questioned whether BHP Billiton had done enough to reduce emissions that contribute to smog and haze as well as global warming. Even with advanced emission controls, the Cabrillo Port project’s environmental impact report states that the tankers, support vessels and floating gas processing plant would emit 160 tons of nitrogen oxides and 60 tons of hydrocarbons per year, both of which are precursors to ozone, a colorless, toxic gas and the most abundant pollutant in Southern California.

BHP Billiton spokesman Patrick Cassidy said the project was misunderstood by California residents.

“It’s an unfamiliar product and that makes it difficult to accurately convey all the benefits and advantages,” Cassidy said. “Our project had the most minimal environmental footprint.”

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gary.polakovic@latimes.com