3 State Agencies Criticize Report on Gas Terminal

Three of California’s most powerful regulatory agencies filed sweeping indictments Thursday of how the Bush administration reached its conclusion that the proposed Long Beach liquefied natural gas terminal would be safe.

On the last day for comment on the project’s draft environmental report, the three agencies raised fundamental questions about the safety of building terminals to handle highly flammable liquid gas in populated areas, such as Long Beach, where 130,000 people would live and work within three miles of the site. Two of the agencies called for the report to be rewritten.

“When human error alone makes this risk too large in light of how many people would be in harm’s way,” the state Public Utilities Commission said in its response, “the added risks of earthquakes or terrorist attacks make this site one of the worst possible sites imaginable.”

The state’s criticisms have significance nationally because the project may be the first in the nation to test a controversial new law that grants the federal government broad latitude to approve onshore liquefied natural gas terminals.

The detailed comments from the PUC, the California Energy Commission and the California Coastal Commission could help lay the groundwork for a possible legal test of the report.

The comments were submitted to the Federal Energy Regulatory Commission, which has the authority to approve the project. The commission and the Port of Long Beach prepared the 700-page environmental report.

Federal officials said they welcomed the comments.

“The more eyes, the better,” spokesman Bryan Lee said.

Also on Thursday, the federal energy commission rejected a request from the state Energy Commission for an extension to comment on a portion of the report that had not been made public. The federal agency requires that anyone viewing that portion sign a nondisclosure agreement. The staff at the state energy commission declined, saying that signing the agreement would tie their hands.

Claudia Chandler, a spokeswoman for the state Energy Commission, said, “I would hope they would want our comments, not so we’re just critical, but so we can be helpful.”

The Long Beach project and a similar one in Fall River, Mass., are being watched closely by regulators and safety experts nationwide because they would be built in urban areas.

Long Beach, the California State Lands Commission, the Port of Los Angeles and several community groups have filed comments that question how plant safety is being assessed.

The L.A. port, which is west of the proposed site, expressed concern about the effect of a major accident on trade at both ports, saying that more than 40% of all imported containerized goods pass through the complex.

The state Public Utilities Commission issued the harshest critique and called for the environmental report to be withdrawn and rewritten.

The agency accuses federal and port officials of failing to address potential fires in the case of an accident, earthquake or terrorist attack and ignoring how an accident in the seaport complex could hurt the economy.

The agency contends that the plant’s developer, a Mitsubishi-ConocoPhillips partnership, “has deliberately withheld information from the public and the government.”

Specifically, the PUC charges that the developer did not disclose that the project would require a five-mile pipeline to deliver 1 billion cubic feet of gas daily to Southern California Gas Co. The developer instead submitted a plan for delivering 800 million cubic feet, the filing states.

Thomas Giles, an executive with Mitsubishi-ConocoPhillips, disputed that contention, saying the firm was merely studying the possibility of distributing more gas and that the project remains unchanged.

Giles said his firm was not surprised by the comments.

“People have concerns, and they should voice their concerns, and we’re glad they’re doing it,” Giles said. “We’re confident that in the end, the facility will be judged safe.”

The PUC also faults federal regulators for failing to review recent liquefied natural gas accidents, including a little-publicized accident in September near Fernley, Nev., in which a small leak caused a fire so fierce that emergency teams were forced to move back a mile from the site.

It maintains that the draft environmental report fails to address many other areas: the full impact of a flash fire from a liquefied natural gas vapor cloud and safer alternatives to locating the plant in an urban area.

The commission said that two terminals proposed for sites off Ventura County would be far less risky.

The state Coastal Commission, in a separate filing, faults the report for excluding analysis of “large, credible accidents that would have the potential to adversely affect the public.”

By excluding such analysis, the commission reports, “no valid conclusions can be reached regarding the project’s potential impacts on human safety.” It calls for the report to be withdrawn and rewritten.

The state Energy Commission, which has been designated by Gov. Arnold Schwarzenegger as the lead agency to review the plant, also called the draft report seriously flawed and incomplete, saying that it should include an analysis of how the project would compare to offshore proposals.