Oil Terminal Proposal Upsets Residents

A partnership including billionaire Philip Anschutz has proposed to build a crude-oil terminal in the Port of Los Angeles so supertankers would not have to unload their cargo offshore, but harbor area residents are questioning the safety of the plan and complaining that it has been wrapped in secrecy.

Another firm, Mitsubishi, recently abandoned an effort to build a liquid natural gas terminal on the same parcel at Pier 400 on Terminal Island after city officials stalled approval of that plan, paving the way for the Anschutz partnership to step in with its own proposal.

Residents are worried that Anschutz’s $73-million project is on a fast track to approval, noting that he was one of the top contributors to Mayor James K. Hahn’s anti-secession campaign and that he has hired a public relations expert who is a close political advisor to the mayor’s sister, City Councilwoman Janice Hahn.

“I’m very concerned about the fact that Anschutz has a lot of political power to get his project approved,” said Noel Park, president of the San Pedro and Peninsula Homeowners Coalition, a group of 14 homeowners associations.

Residents say they are concerned about safety and the potential for oil spills and other pollution. They still remember a 1976 explosion aboard the tanker Sansinena at Berth 46, which killed nine men and shattered windows as far away as Costa Mesa.

Port Executive Director Larry A. Keller said the project is in the early stages of review, although he described the proposal as an attractive one, given the large volume of oil imports needing efficient entry into the U.S.

“This is probably something whose time has come,” Keller said. “Our folks are taking a look at it to see the viability of the thing.”

Keller denied that the project was getting special treatment because of Anschutz’s political activity.

“We’ve been in touch with these people for a year and a half and I haven’t seen any political influence exerted,” Keller said.

The application to build the oil terminal was recently submitted by Pacific Energy Partners, a publicly traded firm in which Anschutz Co. has a 60% stake and serves as general partner.

Denver-based Anschutz built and co-owns Staples Center and is a part owner of the Lakers and Kings.

Companies owned by Anschutz and his partners in Staples Center contributed a combined $300,000 last year to Mayor Hahn’s anti-secession campaign and have made political contributions of more than $35,000 in recent years to Hahn and other elected city officials.

To help win public support for the port terminal, Pacific Energy Partners has retained a public relations expert, Gwen Butterfield, a close friend and political advisor to Councilwoman Hahn, whose district includes the port.

For those reasons, residents of the area fear they will have little say in whether the project is approved.

“We believe it’s already a done deal,” said Janet Gunter, an alternate to the Port Community Advisory Committee. “It’s outrageous.”

The partnership already operates petroleum pipelines in California and the Rocky Mountain area, according to Executive Vice President David E. Wright.

The application proposes a terminal at the deepwater berth at Pier 400 that would transfer as much as 150,000 barrels of crude oil each day from ships to a new tank farm via a pipeline 42 inches in diameter. The crude would eventually pass on to local refineries.

“We feel it would meet a demand in the market,” Wright said.

By providing a more cost-effective way of delivering crude oil to pipelines serving local refineries, the project should have a positive effect on gas prices, Wright said.

“Theoretically, it should help stabilize and keep prices low,” he said.

Wright and port officials said any terminal would fully comply with safety standards.

If the port gives an initial go-ahead, the next step would be for the company to study the project’s potential environmental effects, officials said.

If the permit process goes smoothly, the terminal could be built in 2005 or 2006.

Gunter said she is upset about the cumulative effects of having supertankers entering a port that already has several other facilities for flammable and toxic materials.

“There is more hazardous storage in the Port of Los Angeles than anywhere in Los Angeles County, and this is adding more fuel to the fire,” she said.

She and Park said the port promised long ago to use the Pier 400 area to relocate hazardous operations that are close to neighborhoods.