(August 18, 2005) -- In bureaucratic consequences foretold by City Attorney Bob Shannon when he said months ago that LNG provisions in a then-advancing federal Energy bill could disadvantage the City of LB, city staff has been working to comply with a procedure that didn't exist until the federal legislation became law late last month.

As a result of the federal Energy bill, the City of Long Beach is being asked to meet an August 19 deadline for forwarding its "safety considerations" regarding a proposed 80+ million gallon Port-sited Liquefied Natural Gas (LNG) facility to the CA Energy Commission. The state agency (chosen by Governor Schwarzenegger) "may" communicate the city's safety considerations to the Federal Energy Regulatory Commission (FERC) on or before August 29.

The new Energy bill then requires FERC to "consult with" the CA Energy Commission and "review and respond specifically to the issues raised by the state agency" before FERC's five non-elected Commissioners vote in Washington, D.C. on whether to authorize an 80+ million gallon Liquefied Natural Gas (LNG) facility in LB's Port, roughly two miles from downtown LB.

While LB City Hall scrambles to meet these federally created requirements, the law conclusively spares the LNG project applicant from having to meet the CA Public Utilities Commission's rigorous hearing and review procedures for approval under state law. Without objection from the Port of LB, the project applicant did not seek CPUC approval and FERC said CPUC had no LNG authority. When CPUC sued to enforce CA law, FERC asked Congress to rewrite federal law to strip CPUC (and similar state agencies across the country) of LNG siting and regulatory powers...which Congress did. However the federal Energy bill leaves unscathed the Port of LB's power as landlord to approve or deny a lease for the LNG facility.

News that city staff was working to communicate City Hall's "safety considerations" to Sacramento by Friday Aug. 19 came via a management memo circulated in connection with an Aug. 16 Council item agendized by Councilwoman Tonia Reyes Uranga.

Councilwoman Reyes Uranga's item proposed referring LNG safety issues to the Council's Public Safety Advisory Commission for input and proposed communicating immediately to LB Harbor Commissioners that safety considerations should be their overriding consideration in deciding whether to lease port property for an LNG plant.

Councilwoman Reyes Uranga's motion to refer issue to advisory body died for lack of a second. Her motion to advise Harbor Commissioners -- currently non-elected and non-recallable -- that safety should be the "overriding consideration" passed 9-0.

During the Council discussion, city management indicated it planned to circulate for Councilmembers review on Aug. 18 a draft of the document it plans to submit to Sacramento (on Aug. 19) to meet the new federal Energy bill requirements. LBReport.com has requested a copy of that document (which becomes a public record when it is circulated) and plans to report it.

The federal Energy bill says that before granting approval for an LNG facility, FERC must "consult with" a state agency designated by the Governor [CA Governor Schwazenegger chose the CA Energy Commission] regarding "State and local safety considerations" that include:

• (1) the kind and use of the facility;
• (2) the existing and projected population and demographic characteristics of the location
• (3) the existing and proposed land use near the location;

The sixth item -- the need to encourage remote siting -- raises a fundamental policy issue (since there is no "remote siting" in heavily urbanized LB). City Attorney Bob Shannon encouraged the Council to give policy direction to city management on the matter.

On June 7, 2005 the Council voted 5-4 (Yes: O'Donnell, Kell, Richardson, Uranga, Lerch; No: Lowenthal, Baker, Colonna, Gabelich) to maintain a Memorandum of Understanding with the LNG project applicant (related to possible future City natural gas supplies and prices) pending an Environmental Impact Report on the LNG project (repeatedly delayed, now expected in September).

At the Aug. 16 Council meeting, 3d district Councilman Councilman Frank Colonna pressed for a Council vote using the "need to encourage remote siting" to indicate Council opposition to a Port-sited LNG facility. City Attorney Shannon counseled that such an action required a specifically agendized item...and after bringing the issue to a head, Councilman Colonna acceded to City Attorney Shannon's advice.

LBReport.com has learned that the issue is now set to resurface in a big way: Councilman Colonna and others are preparing to agendize an item for the August 23 Council meeting that proposes communicating to the CA Energy Commission the City Council's opposition to siting an LNG facility in the Port of Long Beach.

This issue is developing as we post.

As previously noted by LBReport.com, under LB's 1980's era City Charter, LB's Mayor-chosen, Council-approved Board of Harbor Commissioners (not the City Council) has the last word on whether to lease the Port property for use as an LNG facility.