Governor Hears Gas Import Pitch

Australian Prime Minister John Howard met with Gov. Arnold Schwarzenegger on Wednesday to urge California to import Australian liquefied natural gas and to promote construction of a controversial gas import terminal off the shores of Ventura County.

Plans for the terminal, proposed by Australian-based BHP Billiton Ltd., have generated strong opposition among some coastal residents, and the Malibu City Council last week went on record opposing the project.

The Wednesday meeting spurred curiosity among LNG proponents and critics about the governor’s position on importing liquefied natural gas, which some call essential to the state’s energy needs and others decry as dangerous.

Safety concerns already have led to the cancellation of two proposed import terminals in the state, in Vallejo and Eureka, and are sparking community protests in Long Beach and Ventura County, where the first West Coast LNG terminals in the United States may be built.

Some residents contend that LNG’s potential fire danger makes such terminals safety threats and terrorist targets.

Last week, 25 environmental groups in California sent a letter to state Cal-EPA Secretary Terry Tamminen and Resources Secretary Mike Chrisman, requesting a meeting. The letter alleges that state officials failed to analyze the current proposals in a comprehensive manner.

Spokesmen for Tamminen and Chrisman did not respond Wednesday to requests for comment on the letter.

Proponents of LNG say it is vital to assuring a stable energy supply in California.

Howard told reporters after the closed-door meeting with Schwarzenegger in Los Angeles that the discussion went well and that the governor made positive comments about the project.

Schwarzenegger did not attend the news conference, and a spokesman later steered clear of commenting on the governor’s opinion of the project.

“The governor expressed a great deal of interest in the proposed natural gas facility and asked a number of questions about the project,” said Deputy Press Secretary Vince Sollitto, adding that the questions addressed such topics as the proposed timeline, BHP Billiton’s safety history and its environmental record.

Also attending were Don Argus, chairman of BHP Billiton LTD, headquartered in Melbourne, and Phil Aiken, president of its subsidiary, BHP Billiton Petroleum, a Billiton official said.

The project, estimated to yield $15 billion in earnings for Australia, faces a lengthy federal and state permitting process.

The facility would be built off the coast about 23 miles from the city of Oxnard. Some experts consider offshore terminals safer than those on shore, such as the one a Mitsubishi subsidiary hopes to build at the Port of Long Beach.

To make LNG, natural gas is chilled to minus 260 degrees, which turns it into a clear liquid that takes up a fraction of the space of the substance in gaseous form. This allows it to be transported by ship rather than pipeline.

Although LNG is used widely in Asia and Europe, only four LNG import terminals are operating in the United States, all on the East or Gulf coasts.

But rising prices and dwindling domestic gas supplies have sparked U.S. interest in importing natural gas from overseas, and more than 30 terminals are proposed nationwide.