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Groups, Individuals and CA Public Utilities Comm'n Seek Intervenor Status in LB LNG Proceeding
CPUC Includes Protest, Seeks Compliance With CA Law Applicable To Utilities on Safety & Other Matters (February 26, 2004) -- A number of LB activists, their grassroots groups, plus the Int'l Longshore & Warehouse Union (Local 63) and ILWU national HQ, the Sierra Club and the CA Public Utilities Commission (CPUC) have filed motions seeking intervenor status in the Federal Energy Regulatory Commission (FERC) proceeding on the proposal by a Mitsubishi subsidiary (Sound Energy Solutions or SES) to build a Liquefied Natural Gas (LNG) facility in the Port of LB.
The CPUC filing is noteworthy because the state agency seeks more than intervenor status: it has included a formal protest.
In a format resembling a legal brief, CPUC takes the position that SES is a public utility that must comply with CA law applicable to public utilities on safety and other matters, requiring a certificate of public convenience and necessity...and the agency reveals it so advised SES on October 30, 2003.
CPUC's filing, entitled "Notice of Intervention and Protest" (excerpts below and link to full text) says "[i]n light of the residential neighborhoods and businesses in the Cities of Long Beach and Los Angeles within approximately two miles of the proposed LNG facilities at the Port of Long Beach, the siting of SES's proposed LNG facilities present significant issues concerning the safety of California citizens and businesses."
CPUC includes information concerning LB residents and businesses in a level detail not seen or heard to date from any governmental entity of the City of Long Beach. An attachment sets forth information on neighborhoods, schools and public facilities. (Attachment B to CPUC filing on link below).
While stressing that it "has an open mind on the issues" and "is not intended in any way to suggest that the CPUC is opposed to LNG facilities in or near California," CPUC says:
Other residential neighborhoods are as close as 1.5 miles to the proposed site for the LNG facilities, and the closest elementary school would be 1.5 miles away...
A threshold question that needs to be addressed in reviewing the proposal is whether or not an LNG facility should be located in an area of high population density, and if so, how close to a highly populated area can an LNG facility be located, and what mitigation measures are required to diminish any dangers to the local population in the event of a catastrophe at the facility. In light of the possibility of an accident caused by human error or of a deliberate attack by terrorists, the questions concerning the safety of the citizens and businesses located in the vicinity of the proposed LNG facilities must be very carefully reviewed. With relatively little public discussion last year, the elected Long Beach City Council and its appointed (Mayor chosen, Council approved) Board of Harbor Commissioners voted to facilitate the project but have not yet given it final approval.
If approved, the LNG facility would be built within part of the nation's busiest port complex.
CPUC's filing adds, "One question which must be reviewed is why a more remote offshore location could not be used. A further question is whether or not offshore sites should be evaluated as alternatives to the SES project..."
CPUC concludes:
If the FERC intends to conduct hearings, the CPUC is willing to work with the FERC to review the proposal...
Any review of the proposal must be undertaken in conformance with California law, as well as Congressional mandates on siting and safety, and take into account the numerous alternative proposed LNG projects for California and Baja California. The ILWU filings (also excerpted below) cite safety and the well-being of harbor area workers as the basis for its intervention.
The new entities and individuals who filed by FERC's February 23 deadline join LB City Hall, energy interests, utilities, oil companies and other individuals who previously filed papers seeking intervenor status in the proceeding.
LBReport.com posts below salient portions the most recent filings. Bracketed material is by us for clarity. Filings are posted in full on FERC's web site.
...The local CEQA [CA Environmental Quality Act] hearing body will be POLB [Port of LB]. POLB is governed by a commission whose appointments are subject to approval by the City Council ("Council") of the City of Long Beach ("City"), to whom POLB CEQA decisions may be appealed. The completed project will involve contractual relationships between SES and the City and SES and POLB. POLB and City officials anticipate those relationships will produce income for the benefit of each. City and POLB officials have stated that the project could provide a reliable gas supply, lower and more stable gas prices and environmental benefits. Regardless of whether that proves true for the region, Long Beach residents face special circumstances as captive customers of Long Beach Energy ("LBE"), the City's natural gas utility. LBE was purchased and financed by ratepayers but is a profit-making City department. Thus, those who bear the risks and impacts of proximity to the project can only realize the hoped for benefits if the City purchases natural gas from SES and sells it to LBE customers and/or operates a fueling station that is anticipated to primarily service City and POLB fleets. SES and POLB have executed a Letter of Intent regarding the project that states its finalization will involve SES and LBE "entering into an agreement for the benefit of the citizens of Long Beach, the Energy Department, the Port of Long Beach and SES." LBE has indicated this may involve a long-term natural gas contract and development, financing, construction and operation of pipelines interconnected with the project... Long Beach Citizens for Utility Reform is an unincorporated organization of ratepayers, citizens and taxpayers that advocates for reliable, cost effective, safe and sustainable utilities; fair tax policies and responsible management of ratepayer- and taxpayer-financed assets... LBCUR, its members and those for whom it advocates will be materially affected by the project. LBCUR seeks to ensure that the project will benefit City residents and businesses as well as LBE rate payers and taxpayers and that it will not adversely affect their financial interests, injure the environment or local economy or endanger public safety. LBCUR and several of its individual members are plaintiffs in a class action complaint filed May 31, 2001 in the Superior Court of the State of California for the County of Los Angeles, Central District. This suit arose in connection with supply and price disruptions and utility users' taxes thereon experienced between December 2000-May 31, 2001. The class of plaintiffs consists of more than 100,000 individuals, families, businesses and other entities. The suit alleges violations of the City Charter and City Municipal Code and a taxpayer claim and seeks damages estimated at $38 million as well as injunctive and declaratory relief and such other remedy as the Court may deem just and proper from the City, Council and related parties. It is currently under appeal. LBCUR seeks to ensure affordable natural gas rates and is concerned that market competitiveness cannot be predicted over the life of a long-term agreement between SES and LBE. LBCUR notes that the Council oversees LBE and also has an obligation to protect the City general fund, which currently has a $63 million annual operating deficit and a projected 2-year shortfall in excess of $125 million. The City may transfer LBE profits to its general fund subject to City Charter and Municipal Code protections that are the subject of the LBCUR complaint. LBCUR therefore has a continuing interest in matters affecting natural gas rates or voters' ability to reorganize LBE or enact corrective Charter measures if LBE is contractually bound to SES. LBCUR has an interest in ensuring environmental health and energy sustainability. The project proposes to import and store LNG from which propane and ethane will be "stripped" and stored. Associated transportation and increased LNG vehicular use could increase local ship and truck traffic, harm local air quality and increase Nox emissions and other pollutants. The length of SES' lease with POLB and contract with LBE, as well as the City's general fund needs, could dissuade LBE from investing in renewable energy alternatives, funding mitigation or maintaining reserves for that purpose or other ratepayer protections during the term of those agreements. LBCUR seeks to protect public safety that might be affected by the transport and storage of LNG, propane and ethane in and through the City. The project will lie in proximity to seismic faults and dense population. It is within the largest port complex in North America, and trade is critical to the City, regional and national economy. Local and federal officials have called POLB a potential target and petitioned Congress for Department of Homeland Security ("DHS") funds. LBCUR asserts that POLB possesses all characteristics of DHS "High Threat Urban Areas," credible threat, vulnerability, infrastructure of national importance, population density and inadequate safety resources. DHS has warned of Al Quaeda's interest in LNG facilities. The project site is located in a Long Beach Redevelopment Agency ("LBRDA") project area and is surrounded by portions of four other LBRDA project areas operating subject to provisions of the California Health and Safety Code. A safety event involving the project could result in property damage to 5 LBRDA areas. State and local taxpayers have shifted large sums of property tax increment from their respective general funds for over 35 years to finance LBRDA activities for the purpose of eliminating blight. LBRDA project areas currently encompass half the city and have incurred significant indebtedness for which the LBRDA and/or the City have a future liability. LBCUR therefore has a continuing interest in matters that could set back Redevelopment activities, increase blight or harm State and local taxpayer interests. Finally, LBCUR notes that the combined Port of Long Beach/Port of Los Angeles complex moves more than 40% of the nation's cargo. American taxpayers have invested considerable sums to dredge and construct a man-made port and related breakwater, bridges and improvements. They have spent large amounts on port-related Army Corps of Engineers projects pertaining to San Pedro Bay and the Los Angeles River. They have put significant funds into port-serving Department of Transportation projects and infrastructure including the Alameda Corridor rail project and the I-710. City and POLB representatives are currently petitioning Congress for additional allocations for these purposes. LBCUR seeks to ensure that the goods movement on which the nation relies is maintained and taxpayer investments are protected. LBCUR is a volunteer organization. The project may represent potential new gas supply and/or economic opportunity for major utility and energy concerns in the market surrounding Long Beach or even for the City. It may also represent adverse financial consequences to ratepayers and taxpayers and pose environmental, economic and public safety hazards. If any project benefits accrue to Long Beach residents and businesses and LBE ratepayers and taxpayers, they can only be achieved through the agreement between SES and LBE. Potential benefits will, however, be contingent upon contract provisions and the performance of both parties, which are uncertain, and on whatever City Charter and Municipal Code provisions govern LBE. It is unknown whether the LBCUR appeal will be completed during the permitting process and it is thus impossible to evaluate what adjudicated or voted City Charter and Municipal Code provisions might govern future LBE operations. The Council has authorized confidential negotiations between SES and LBE. Pursuant to the California Ralph M. Brown and Public Records Acts, the Council may not privately discuss or be informed concerning the status of those negotiations. LBCUR does not anticipate that an agreement between SES and LBE will be publicly discussed and finalized until late in or after the permitting process. LBCUR asserts that POLB, the City and LBCUR cannot at present evaluate the manner in which that agreement might affect ratepayer and taxpayer interests. In light of the foregoing, LBCUR questions how claims of local benefits that might or might not come to pass can be weighed against environmental, economic and public safety risks... For the reasons stated herein, LBCUR has a substantial interest in this matter that cannot be sufficiently represented by any other party. LBCUR therefore respectfully requests that it be permitted to intervene as a party in this matter, with all the rights and privileges accorded thereto. Respectfully submitted, As a resident of Long Beach, I am extremely concerned about the pending application of Sound Energy Solutions to build an LNG receiving facility in the Port of Long Beach, specifically because of the chosen location. Interruption of the goods movement through the joint ports of Long Beach and Los Angeles whether due to the actions of man or nature has a huge impact on the region and the nation. The port complex created in San Pedro Bay by Long Beach and Los Angeles is the third largest in the world and according to Los Angeles Mayor Jim Hahn, "Our ports handle 40 percent of the nation's cargo" (Press Telegram, February 18, 2004). Last year the nation felt the impact of disruption of goods movement through the joint ports of Long Beach and Los Angeles as the result of a union work stoppage. Consider the consequences of a terrorist attack on the ports. Congresswoman Millender-McDonald, author of HR3712, who seeks $5.5 billion in federal money over 10 years to deal with security in the nation's ports, pointed out in the same article "that although port security has improved since Sept. 11, 2001 the ports of Long Beach and Los Angeles are challenged by a lack of funding. We are still extremely vulnerable." (Press Telegram, February 18, 2004) Three years ago, the effects of terrorist attack would not have been considered when determining a site or planning a facility, but now they must be. Port officials are currently working together on a five-year security plan, including an emergency response plan for port evacuation and mass-casualty situations. Why add another point source to that plan by siting a facility within the port complex that could be turned into a weapon of mass destruction by a terrorist? Worst case scenarios must be given strong consideration. A variety of California agencies have responded to the Notice of Preparation with concerns to be addressed in the EIS/EIR including the California Energy Commission. I will only reiterate two of them. In a letter dated October 31, 2003 they cited a number of areas of concern including geologic (effect of earthquakes -- two faults run through the port) and transportation (effect on port operations when an LNG ship is in transit or at dock). All issues raised need to be addressed in detail. In 1979, the State of California did a study of possible sites for LNG facilities. The study concluded that the Port of Los Angeles (and Long Beach by proximity) were not appropriate sites due to the population in the immediate area. Although the siting restrictions/restraints resulting from that study no longer have the force of law, they are still valid. New LNG plants should NOT be located close to population centers, and definitely should not be located in the third largest port complex in the world! /s/ Linda Ivers ...Citizens Advocating Responsible Development ("C.A.R.D.") is an ad-hoc group of individuals who feel strongly enough about an issue to advocate for it in situations where their neighborhood organizations "fear to tread." Past activities have focused on redevelopment, land use issues involving major utility rights of way, and port related transportation and business encroachments into neighborhoods surrounding the I-710. C.A.R.D.s current membership has focused on transportation issues related to goods movement from the Ports of Long Beach and Los Angeles including expansion of the I-710 freeway, redevelopment (active membership on project area committees) and participating in the update of the Long Beach General Plan. C.A.R.D.s current membership includes elected members of the North Long Beach Redevelopment Project Area Committee ("NorthPAC") and the Central Project Area Committee ("CPAC"). NorthPAC and CPAC are citizens advisory committees formed pursuant to the rules and regulations of the City of Long Beach and the Health and Safety Code of the State of California with the responsibility of making recommendations to the City of Long Beach Redevelopment Agency ("Agency") relating to the use of tax increment funds generated within North Long Beach Redevelopment Project Area ("NLB-RPA") and Central Long Beach Redevelopment Project Area ("Central") of the City of Long Beach. Only PAC members may vote on PAC recommendations relating to the use of tax increment for community improvement. The site that SES seeks to lease and occupy within the Port of Long Beach for the purpose of constructing and operating an LNG Terminal is located wholly within the boundaries of Parcel 5 of the NLB-RPA and will effect the tax increment generated within Parcel 5. The SES site also lies in close proximity to portions of the Downtown, West Beach, and West Long Beach Industrial Redevelopment Project Areas, which have incurred significant indebtedness and are nearing the end of their ability to incur new debt. It is also in close proximity to a portion of the recently readopted Central Project Area, which is just beginning to receive tax increment. The Agency is currently contemplating a merger and/or expansion of existing project areas that could result in shifting funds from the ten non-contiguous parcels that make up the NLB-RPA. Portions of the West Long Beach Industrial, Central, Downtown and West Beach Project Areas are sufficiently close to the SES project site that they too could experience significant physical damage and economic disruption should a safety event occur. Any event that forces a change in the long range planning and priorities that have been established in Long Beach's multiple redevelopment project areas will impact the neighborhoods represented by C.A.R.D.s members for many years to come... Citizens Advocating Responsible Development /s/ Linda L. Ivers [with correspondence also directed to LB resident Carol McCafferty] ...I am a resident of the City of Long Beach living within one mile of the Interstate 710 freeway. Port operations contribute significantly to air pollution, traffic, freeway congestion, safety and regional security as currently configured. 40 percent of the nation’s goods travel through this port contributing greatly to the national economy while creating an extremely vulnerable operation in the midst of a heavily populated area in the Los Angeles basin. A recent labor strike at the Port crippled the movement of goods throughout the United States and had a significant impact to the national economy. This event served to identify the closure of the port as a major threat to the national economy, which fully enhances its appeal as a major terrorist target. Yet terrorism is given no potential for credibility in the application. The Port of Long Beach is a part of the largest port complex in the United States, and one of the largest in the world. U. S. Representative Millender-McDonald is currently seeking billions of dollars in federal funds over a ten year period for homeland security for this complex because it’s "vulnerability" and its importance to the national economy. I have read Sound Energy Solutions’ Application for Authority to Site, Construct and Operate LNG Import Terminal Facilities, particularly Volume 3; part 2 of 2, Resource Report 11 Reliability and Safety. I am very concerned with the inadequate discussion in Section 11.4 of this document entitled Security and Terrorism. The heavily used Long Beach Airport is less than 10 miles from the port and the Los Angeles International Airport is approximately 20 miles away, providing the tools, ammunition and logistical components to carry out a major terrorist attack on this vulnerable and nationally significant target even without the LNG facility. The document very weakly states (on page 53) that "hijacked aircraft are not a credible attack scenario and the LNG storage tanks are not a credible target selection." In the wake of September 11, 2001, I find this statement to be very naive and an incredibly poor analysis and evaluation of a very real possibility. Discussions regarding direct impact to the LNG and other gas storage facilities included an analysis of penetration by a "credible weapon" leaving only a three inch hole in the storage tanks, yet a direct impact by aircraft, that could potentially completely breach a storage tank, is not even considered. Even though the extensive and surrounding gas and oil fields near the port offer a more viable explosive scenario, their proximity to the ports may not be bridged or cause the level of significant damage as reasonably as a direct attack on the proposed LNG, propane or methane facilities. Because the release of gases into the atmosphere coincident with the direct impact of an airplane or jet with fuselage loaded with fuel must be carefully examined. One must consider that the combination of elements, in proximity to the port and oil fields, could be catastrophic with excessive loss of life, and a sustained release of smoke and pollutants into a very heavily populated and traveled area, which is already severely impacted by port operations and port traffic. The potential to cripple port operations indefinitely by attacking these facilities must be given a very serious level of credence and analysis. This document cites (page 4-5, section 11.1.3.1) the last significant LNG facility breach in the U. S. occurring in Cleveland, Ohio, my birthplace and my maternal family’s hometown, killing over 128 people in 1944. The basis given for the safety of LNG is its subzero temperature, lack of oxygen, and the durability and construction of the storage tanks. However, LNG leaked from a faulty weld and storage tanks using nickel metal composition unable to withstand freezing temperatures in Cleveland and caused a significant loss of life. What would occur if the storage tanks for LNG, with subcomponents of methane and propane nearby, were breached entirely? How would attack by an airplane or jet compare to the seismic activity evaluated? Wouldn’t a direct impact on the facility by an airplane or jet, with a full load of fuel create a complete breach, with a greater potential for disaster than an earthquake or a faulty weld? /s/ Laurie C. Angel The Sierra Club is a national environmental organization of 700,000 members whose focus is clean air, clean water, open space, natural habitat and biodiversity, and environmental justice. The Sierra Club and its members for whom it advocates will be materially affected by the project because of the number of members who would be affected negatively by this decision because they live within or in close proximity to the proposed site.. The Sierra Club seeks to ensure that the project will not adversely affect their individual or community safety, the financial investments they and the community have in their businesses and homes, and the risks that their places of employment will be destroyed... /s/ By: Gordon LaBedz, MD ...The ILWU is a labor organization organized and existing under the laws of the State of California. The ILWU is the collective bargaining agent for approximately 50,000 workers employed in longshore, warehouse, maritime, hotel/restaurant, health care, and office clerical industries in the states of California, Oregon, Washington, Alaska, Hawaii and in Canada, including workers in the Los Angeles-Long Beach Harbor. Accordingly, the ILWU and its members have a direct interest in the proposed LNG project and all matters concerning health and safety applicable to such employment... ...The ILWU and its members will be materially affected by the project. Thousands of ILWU members work in the LEONARD CARDER, LLP ...Local 63 is the local collective bargaining agent for marine clerks in the Los Angeles-Long Beach Harbor... ...Local 63 fights for the health and safety of its members, all of whom work in the affected area. Pollution and/or health and safety issues are of grave concern to Local 63 and its membership. Local 63 and its members will be materially affected by the project. All Local 63 members work in Los Angeles-Long Beach Harbor. Local 63 seeks to ensure that the project will not negatively affect or create health and safety risks to workers in the ports. LAW OFFICES OF MARC COLEMAN ...The Energy Commission is a state agency that has statutory responsibilities for establishing state energy policies and planning for adequate energy infrastructure to meet the growing energy demand of California’s consumers and businesses. Among those responsibilities is producing the state’s Integrated Energy Policy Report. Cal. Pub. Res. Code §§ 25302-03, 25307. The Integrated Energy Policy Report includes, among other things: Assessments of trends in . . . natural gas supply and demand, and the outlook for wholesale and retail prices . . . . The Energy Commission also has responsibility for administering the state’s one-stop licensing process for thermal power plants of greater than 50 MW. Cal. Pub. Res. Code §§ 25500 et seq. Importation of LNG would have an impact on the state’s thermal power plants since in recent years virtually all applications have been for facilities that would use natural gas... The Energy Commission has taken a leading role in informing the public regarding LNG and applications for LNG terminal facilities that could affect California. The Energy Commission has posted information for the public on its website at http://www.energy.ca.gov/lng... The Energy Commission participated in FERC’s pre-filing process for the proposed SES LNG project. In particular, on September 22, 2003, FERC and the Port of Long Beach, the lead state agency for the proposed project under the California Environmental Quality Act ("CEQA"), Cal. Pub. Res. Code §§ 21100 et seq., issued a Notice of Intent to Prepare a Joint Environmental Impact Statement and Notice of Preparation of Joint Environmental Impact Report; the two agencies also requested scoping comments. An Energy Commission representative attended the public scoping meeting held on October 9, 2003, and the Energy Commission provided extensive scoping comments on October 31, 2003. These scoping comments were filed in FERC’s prefiling docket for this project, PF03-6-000, and are incorporated herein by reference. [fn] The Energy Commission’s letter to the FERC and to the Port of Long Beach identified four major categories of concern that it felt should be addressed in the joint environmental document. These categories were:
For all of the reasons stated above, the Energy Commission respectfully requests that FERC grant this motion to intervene. Under applicable state law, SES [Sound Energy Solutions] is a California public utility. [Citations omitted] SES intends to utilize its proposed facility to process LNG into natural gas to be sold "in California's ...The CPUC informed SES on October 30, 2003 of the CPUC's legal opinion that SES was a public utility under California law... The CPUC's assertion of jurisdiction is not a determination on the merits of SES's proposed LNG project at the Port of Long Beach. The CPUC has an open mind on the issues and will consider all of the parties' positions in a hearing on SES's application for the certificate of public convenience and necessity. The CPUC's protest of SES's current application is not intended in any way to suggest that the CPUC is opposed to LNG facilities in or near California... The CPUC recognizes that Congress has deregulated the first sales of natural gas, including LNG, and has deemed that the importation of LNG is in the public interest...Instead, the CPUC staff identified the following potential areas of regulation of SES and its proposed LNG facilities with which the CPUC would be primarily concerned: the siting and safety of SES's proposed LNG facilities in California; and, in case of an emergency (i.e., a natural gas shortage in California), the need for natural gas to be transported to core residential customers or electric generation units (with just compensation to SES)... In light of the residential neighborhoods and businesses in the Cities of Long Beach and Los Angeles within approximately two miles of the proposed LNG facilities at the Port of Long Beach, the siting of SES's proposed LNG facilities present significant issues concerning the safety of California citizens and businesses. The CPUC is charged with the duty of ensuring the safe location and safety of the facilities of California utilities. [citations omitted]... ...There is a substantial state interest (notwithstanding the Port of Long Beach's role) with regards to these issues. The CPUC therefore protests the application on the basis that SES is mistaken that it has fully complied with California law... The proposed LNG facilities at the Port of Long Beach would be located in the City of Long Beach, California's fifth largest city. The proposed site would be within two miles of the downtown area of Long Beach, which houses the municipal buildings of the city, convention centers, a federal building and residential and commercial neighborhoods. Other residential neighborhoods are as close as 1.5 miles to the proposed site for the LNG facilities, and the closest elementary school would be 1.5 miles away. [An attached affidavit, text separately provided below, then proceeds to detail the population and demographic characteristics of the area within two miles. ] A threshold question that needs to be addressed in reviewing the proposal is whether or not an LNG facility should be located in an area of high population density, and if so, how close to a highly populated area can an LNG facility be located, and what mitigation measures are required to diminish any dangers to the local population in the event of a catastrophe at the facility. In light of the possibility of an accident caused by human error or of a deliberate attack by terrorists, the questions concerning the safety of the citizens and businesses located in the vicinity of the proposed LNG facilities must be very carefully reviewed... The natural physical aspects of the proposed location must also be carefully examined, particularly given the seismicity of the area and the potential for liquefaction of the landfill at the Port... ...One question which must be reviewed is why a more remote offshore location could not be used. A further question is whether or not offshore sites should be evaluated as alternatives to the SES project... ...In order for SES to comply with state law, the CPUC must conduct its own proceeding to consider the public convenience and necessity of SES's proposal to construct LNG facilities at the Port of Long Beach...[For reasons detailed in CPUC's filing] it appears the FERC does not possess sufficient authority to require conditions as part of any approval of SES's project... If the FERC intends to conduct hearings, the CPUC is willing to work with the FERC to review the proposal... Any review of the proposal must be undertaken in conformance with California law, as well as Congressional mandates on siting and safety, and take into account the numerous alternative proposed LNG projects for California and Baja California.
LBReport.com has posted the CPUC filing in its entirety in pdf form at: CPUC FERC LB LNG Motion to Intervene & Protest.
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