Offshore Terminal’s Onshore Effect Debated

Building a floating liquefied natural gas terminal 14 miles off the Ventura County coast may be safer than putting it on shore, but the proposed $800-million project has triggered intense opposition over its effect on air quality in smoggy Southern California.

About 12,000 coastal residents have filed comments, mostly in protest, about a draft air pollution permit the U.S. Environmental Protection Agency is preparing for Australia-based BHP Billiton, one of the world’s largest energy companies.

Environmentalists say BHP’s project fails to meet Clean Air Act requirements because the EPA is not holding it to the rigorous standards that would apply if it were built on land. The EPA strongly advocated stringent controls for two years, then dropped its demand after intense lobbying from the company and the Bush administration, they said.

“It is being held to the lowest possible level of environmental review,” said Susan Jordan, director of the California Coastal Protection Network. “It sets a precedent for all the offshore LNG projects.”

But Renee Klimczak, president of BHP Billiton LNG International, said the project would not only provide California with a reliable source of low-polluting energy, it would aid in the fight for clean air. She said the company plans to use the best-available technology so the operation does not degrade air quality on the mainland.

“There should be no onshore impact,” Klimczak said. “We have committed to reduce near-shore emissions to near zero and that’s going to result in a net air quality benefit.”

The debate signals a shift from safety concerns at LNG marine terminals toward environmental consequences in California, home of the nation’s worst air pollution. The BHP project faces growing scrutiny because it is further along than four other proposed LNG projects and could become the first fueling port on the West Coast.

Cabrillo Port would consist of a floating gas-processing platform the size of three football fields that would be moored offshore between Oxnard and Malibu. Tanker ships would haul liquefied natural gas -- compressed and chilled to minus 260 degrees for easier transport -- from Malaysia, Indonesia and Australia. Eight heaters inside the terminal would warm the fuel, producing up to 1.5 billion cubic feet of LNG a day.

The EPA said the project would include numerous measures to slash emissions, including some that exceed requirements. The agency said its preliminary findings indicate emissions would not significantly affect air pollution onshore, though state and local air quality officials are skeptical.

The gas-processing terminal would release up to 95 tons of ozone-forming pollutants annually. An additional 119 tons would result from small vessels and the two or three tankers expected to dock there each week -- making the project one of the top polluters in Ventura County.

More pollution could complicate cleanup efforts in the county, where the federal government has designated air quality as moderately poor and is likely to downgrade it to seriously polluted next year, said Mike Villegas, executive officer of the Ventura County Air Pollution Control District.

California air quality officials also warn that onshore breezes would blow emissions from the BHP terminal across Malibu and into the Los Angeles Basin, contributing to smog in some of the nation’s most polluted communities.

“It’s a pretty large [pollution] source even with mitigation measures,” said Moshen Nazemi of the South Coast Air Quality Management District. “The equipment on the platform will still have emissions that are going to come onshore.”

Pollution Mitigations

President Bush and Gov. Arnold Schwarzenegger have endorsed building LNG marine terminals. California powers nearly one-third of its electrical plants, businesses and households with natural gas, yet about 85% of the fuel is imported from the northern Rockies and Plains states or Canada and it is increasingly costly and scarce as more states switch to the clean-burning fuel.

“We need natural gas,” said Susanne Garfield, spokeswoman for the California Energy Commission. “We’re not as interested in where it comes from, but we probably need one or two terminals on the West Coast.”

Klimczak said BHP would take a number of steps to compensate for pollution the project generates, including a requirement that only ships powered by natural gas within 25 miles of the coast could berth at the terminal. Service vessels would be powered by natural gas instead of diesel. The LNG reheating units aboard the terminal would be fitted with “best-available control technology” to achieve significant reductions, and emissions from other sources would also be cut, she said.

“With all the efforts, Cabrillo Port emissions will be reduced to zero through mitigation,” Klimczak said.

But critics cite flaws in BHP’s strategy. They note that the EPA has not written the company’s cleanup pledges into an enforceable permit. The state Air Resources Board said not enough is being done to account for emissions from the LNG tanker ships.

They argue that Los Angeles-area air pollution is so severe that the project must be held to the most rigorous standards.

For example, Nazemi cites LNG-industry literature that shows advanced technology could cut nitrogen oxide emissions by an additional 45% and carbon monoxide by 56% from the combustion vaporizers, the main pollution source on the terminal. But the EPA is not requiring that technology, instead allowing BHP to use equipment that releases up to four times more smog-forming compounds, according to the AQMD.

The AQMD also fears that the terminal could be a portal for “hot gas” entering California. Hot gas is natural gas that burns at a higher temperature and produces more smog-forming emissions. It is common in Asia, and Nazemi said it could increase emissions of nitrogen oxide, a key ozone precursor, at Los Angeles-area homes and businesses by 20% to 100%.

The district seeks guarantees that Cabrillo Port will adhere to hot gas restrictions similar to those required for the proposed Sound Energy Solutions LNG terminal in Long Beach Harbor. Klimczak said BHP’s natural gas supply is clean and “can be taken right out of the ground and shipped and meet all California standards.”

A cornerstone of BHP’s plan calls for installing new, cleaner engines in two diesel tugboats operating on the California coast. But critics said the full benefit of the pollution reduction would not accrue in the affected region because the tugs operate as far away as San Francisco.

The company estimates that cleaner tugboats would eliminate 210 tons of emissions annually, enough to compensate for Cabrillo Port. But the EPA questions those estimates and seeks more tests. Villegas wrote in an Aug. 1 letter that the emissions reductions benefit to Los Angeles and Ventura counties would be just 79 tons per year and more were needed.

EPA Reverses Position

The Clean Air Act includes a mechanism to ensure that all the emissions from a new pollution source are mitigated through “offsets” -- a method by which a new polluter pays to eliminate enough emissions from other sources to compensate for its own. EPA records show that for two years, the agency strenuously argued that BHP acquire offsets for its project. But securing offsets is costly, difficult to achieve and leads to delays, so the company resisted.

The EPA reversed itself and granted a waiver after the company contacted the White House Task Force on Energy Project Streamlining. Bush created the task force in 2001 to accelerate energy projects. BHP spent $1.8 million in California lobbying for its project last year -- the seventh-highest expenditure among special-interest groups, according to the secretary of state.

“I have never seen an energy project in the state with this much lawyering and lobbying in 25 years,” said V. John White, air quality lobbyist for the Sierra Club.

Amy Zimpfer at the EPA regional office said the agency reversed its position after concluding that Cabrillo Port would be in a patch of ocean where the air is not designated as polluted, allowing for lenient standards similar to those in effect at Channel Islands National Park and a Navy facility on San Nicolas Island 70 miles offshore.

BHP is “providing mitigation that is not required,” Zimpfer said. However, sources in the EPA’s San Francisco office said officials in the agency’s Washington headquarters often overrule the regional office on pollution permits. “More and more of our decisions on permits are overhauled by headquarters, and that’s different than the way we’ve done things before,” said one EPA official.

Karen Kraus, an attorney for the Santa Barbara-based Environmental Defense Center, questions the EPA’s switch. She said an exemption can be granted only for projects built on the islands. Further, she said the Deepwater Port Act, under which the project is being permitted, states that clean-air laws of the closest adjoining state must apply.

“The EPA backed off,” Kraus said. “There’s no legal or factual basis to justify what they’re doing.”

Zimpfer said that the EPA is still reviewing public comments and that the air pollution permit could be modified before a final version is issued next spring.

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gary.polakovic@latimes.com