The last time big corporations sought to foist liquefied natural gas (LNG) and its perpetual high prices on California consumers, environmental issues did not kill the project, even though that’s the romantic version of the story. Economics weren’t fatal, either.
Instead, delays did in the plan, long waits spawned by a lawsuit filed by the Chumash Indian tribe, which contended the proposed importing facility at Pt. Conception in Santa Barbara County impinged on tribal holy space.
The Chumash never had to prove their case. That was because after their lawsuit hung around the courts for two years in the early 1980s, a worldwide glut of natural gas occurred, driving prices so low that not even the powerful politicians behind that LNG product could justify its costs.
It is now 25 years later, and once again the prospect for major delay hangs over the most active plan to bring LNG – natural gas cooled to a subfreezing liquid and hauled across the Pacific Ocean – to a receiving facility planned 14 miles off the Oxnard/Malibu coast of southern Ventura County.
The new possibility of a long delay stems from the Democrats’ takeover of Congress last winter, which made West Los Angeles Rep. Henry Waxman chairman of the House Committee on Oversight and Government Reform, a unique post allowing him to issue subpoenas without so much as a vote of his committee.
Waxman hasn’t yet issued a subpoena in the case of the planned offshore Cabrillo Port, a project of the Australian energy giant BHP Billiton LLC, which aims to introduce imported gas into the California pipeline network. If Billiton succeeds, Californians will likely be stuck paying prices at or above last year’s record levels forever. This is guaranteed by the cost of the gas itself, plus the multi-billion dollar price tag on the project and the huge tankers that would serve it.
It’s not that California needs the gas, either. There is plenty of supply available from domestic sources, and every indication is that known supplies will hold up for at least the next quarter century. The only study saying otherwise was done Sempra Energy, now building an LNG plant of its own in Baja California.
Nevertheless, key state agencies like the Public Utilities Commission and Energy Commission authorized the Sempra–owned Southern California Gas Co. and San Diego Gas & Electric to give up one–fourth of the state’s reserved natural gas arriving from Texas and Colorado via the El Paso and Transwestern pipelines and replace it with LNG.
One way the Billiton project, called Cabrillo Port, has been hustled along was via a June 2005 decision by the federal Environmental Protection Agency to exempt it from local air quality permitting standards imposed by the Ventura County Air Pollution Control District. The EPA said “further analysis” of Cabrillo Port led to its decision.
No one in Congress or any other major governmental position protested that ruling, which figured to cut at least a year off the project’s schedule. That is, no one protested until January, when Waxman demanded the EPA turn over documents related to the decision.
Now Waxman is claiming the EPA failed to provide evidence of any analysis at all before it granted the smog waiver. Instead, he says, documents reveal that the EPA’s top air quality official met with Billiton in March 2005 and then personally intervened with local EPA staffers handling the case about one month later.
Waxman now insists the EPA provide more documents, saying the agency’s refusal to submit some paperwork “appears to intensify…concerns about EPA’s handling of this process.” In short, Waxman is charging favoritism of Billiton by senior EPA officials.
For sure, Billiton’s plans are favored by state officials all the way up to the level of the governor, who has said he prefers the Billiton plan over other current LNG proposals.
Says Susan Jordan, director of the California Coastal Protection Network and a longtime fighter against LNG, “BHP Billiton has known since 2004 that Cabrillo Port was a non-starter under the Clean Air Act. BHP’s solution was to go behind the public’s back to pressure the EPA to drop the requirements that every other major new source of pollution would have to comply with…nothing short of full compliance with the Clean Air Act is acceptable.”
The bottom line is that Cabrillo Port will not go forward until the EPA satisfies Waxman that it followed all its usual processes. He has the power to thwart the agency’s next budget and can call any of its officials on his carpet if he chooses to issue subpoenas.
And if the EPA-granted waiver should be reversed, the timetable for full-scale LNG development in California will be set back at least a year or two. No one knows what might happen during that time. In fact, the scene is very similar to that of 1980, when no one anticipated the worldwide glut of gas that killed the Pt. Conception project.