Gov. Backs State Authority Over LNG Sites

Gov. Arnold Schwarzenegger has declared his opposition to proposed federal legislation that would usurp state control over the location of liquefied natural gas terminals and that could weaken California’s ability to block new oil and gas drilling off its coast.

“I strongly oppose any new oil and gas leasing off California’s coastline and any efforts to weaken the right of California, or other states, to protect their coastlines from the adverse impacts of offshore oil and gas drilling,” Schwarzenegger wrote in a seven-page letter to Energy Committee Chairman Sen. Pete V. Domenici (R-New Mexico) and Sen. Jeff Bingaman (D-New Mexico), the top Democrat on the committee.

In his letter, Schwarzenegger also reiterated his opposition to giving federal regulators, rather than states, the final say over the location of LNG terminals. Three such terminals are now proposed in California, one in Long Beach and two a few miles off the coast of Oxnard.

The governor wrote that he sees imported natural gas as important to the state’s future energy needs. But, as he has indicated before, Schwarzenegger said he believes the safety and environmental concerns about the terminals, where the highly flammable gas would be unloaded, warrant state review of their location as well as state permits for how they operate, whether on shore or in state waters.

The governor’s May 13 letter comes as Senate leaders weigh proposals for a sweeping energy bill that could undermine the two-decade-old congressional moratorium on new offshore oil and gas drilling off the Pacific and Atlantic coasts.

Two proposals would offer states financial incentives to opt out of the long-standing bans on new drilling in coastal waters. The idea is to entice cash-strapped state governments with the promise of offshore oil revenue from federal leases and break up the bicoastal bloc of congressional votes that has kept offshore reserves off-limits since the early 1980s.

However, Schwarzenegger’s opposition to new offshore oil and gas drilling off California, along with a similar position held by the president’s brother, Gov. Jeb Bush of Florida, could undermine efforts of congressional Republicans to increase domestic oil and gas production.

Schwarzenegger’s defense of the state’s authority over siting LNG facilities drew a favorable response from Long Beach civic leaders.

“We’re very encouraged by his position,” said Tom Modica, head of government affairs for Long Beach. Modica and City Councilman Frank Colonna recently returned from a lobbying trip to Washington, D.C., to try to preserve local and state control over siting an LNG facility with highly flammable gas in a city of nearly half a million.

“We are very concerned about this -- the security, the cost,” Colonna said.

Yet various conservation and consumer groups, such as Long Beach Citizens for Regulatory Reform, suggested that the governor hadn’t come out soon or forcefully enough on the topic.

“The problem is that the federal push to take over control, the push is so strong, we are past the point of niceties,” said Susan Jordan, director of the California Coastal Protection Network. “In order to persuade Congress, we need a strong governor to come out in the strongest possible ways.”

Jordan said she was disappointed that the governor in his letter seems to simply accept the idea that California needs natural gas from LNG terminals, without doing a proper assessment of the state’s future energy needs.

The California Public Utilities Commission has challenged federal regulators’ claim that they have sole authority to decide whether such a facility will be built in Long Beach.

President Bush last month suggested that Congress should give such power to the Federal Energy Regulatory Commission “so we can expand our use of liquefied natural gas.”

The House of Representatives, also last month, passed a version of the energy bill that would limit states’ ability to fight the construction of LNG terminals they believe pose a safety risk. Now the Senate is working on its version, prompting Schwarzenegger to write.

The governor was lobbied extensively to express concerns by local officials, including Long Beach Mayor Beverly O’Neill, who wrote a plea on April 21 for his help to safeguard local controls over the placement of gas terminals.

“These facilities can have an enormous impact on a community and its residents, and therefore it is imperative that local and state government retain the opportunity to address critical community concerns,” O’Neill’s letter concluded.