(February 2, 2005) -- 1st district Councilwoman Bonnie Lowenthal has publicly said she'll seek a report from LB's City Attorney and the Port of LB at the February 8 City Council meeting on developments -- first reported locally on January 28 by LBReport.com -- indicating that the Federal Energy Regulatory Commission (FERC) wants Congress to give the agency unambiguous federal authority -- including the power of eminent domain -- over siting onshore Liquefied Natural Gas (LNG) facilities.

The Port of LB is presently working with a Mitsubishi subsidiary to advance the firm's application with FERC to build and operate an 80+ million gallon LNG facility in the Port roughly two miles from downtown LB.

During the new business portion of the Feb. 1 Council meeting, Councilwoman Lowenthal said:

"I would like to request that we have a report from the City Attorney and the Port of LB regarding the request from FERC to Congress, asking to modify section 3 of the Natural Gas Act to make clear and unambiguous the exclusive siting authority of FERC over onshore LNG terminals and connecting pipeline facilities. I know how I feel about that. I know we had a lengthy conversation this evening about local control [in the context of public employee pensions] and I would guess that my colleagues would like to weigh in, so I'm asking to have that on the agenda next week [Feb. 8]."

As first reported locally by LBReport.com late last week, materials on the U.S. Senate Energy and Natural Resources Committee web site indicates that a January 24 conference took place involving the Senate Committee, FERC, the National Commission on Energy Policy, Dominion Energy. the Center for Liquefied Natural Gas and National Association of Regulatory Utility Commissioners.

The Senate posted documents indicate that FERC referred in the meeting (without mentioning LB details) to a controversy stemming form the Port of LB's action in processing the Mitsubishi subsidiary's application seeking regulatory permission from FERC but not from the CA Public Utilities Commission (CPUC).

FERC contends that existing federal law gives FERC exclusive authority over LNG facility siting and safety issues and says the Mitsubishi subsidiary isn't required to obtain CPUC permission. CPUC strongly disagrees...and has sued FERC in federal court, seeking to enforce CA law which CPUC says gives the CA agency regulatory and safety authority.

The CPUC v. FERC LB dispute is now considered a test case with national implications, drawing the attention of state and local officials across the country as well as LB LNG project critic Bry Myown. The Port of LB and LB City Hall -- while at the eye of the storm -- have remained comparatively silent on the federal versus state issue.

LB area state Senator Alan Lowenthal and Assemblywoman Betty Karnette have both indicated that they support CPUC's position in the dispute.

As previously reported by LBReport.com, in July 2004 the LB City Attorney's office presented Councilmembers with a memo detailing the city's powers over the LNG application. The memo noted that the Port of LB (via its non-elected Board of Harbor Commissioners) has authority (as landlord for the site) to decide whether to allow the project...and the City Council (via its municipally owned energy utility) has authority to decide whether to build a pipeline to connect a Port LNG terminal with the So Cal Gas pipeline system.

In fall 2004, the Mitsubishi subsidiary amended its application with FERC to note that LB City Hall had not yet reached agreement with the firm on terms for building the pipeline...and the firm amended its application to seek permission from FERC to build the pipeline on its own. Ms. Myown spotted the development and noted for Councilmembers that FERC already has eminent domain power authorizing land condemnation to accommodate pipelines...but not for LNG facilities...yet.

In late November 2004, the City Council approved LB's 2005 federal agenda, reiterating traditional support for local control of city activities. At the same Council meeting, Councilmembers voted to renew a six figure contract with E. Del Smith & Co., a DC firm that has for years handled DC legislative advocacy for LB City Hall and the Port of LB (under separate contracts).

A few days later, LBReport.com learned and reported that a House-Senate conference committee had inserted language in a legislative report accompanying a multi-agency spending bill, backing FERC's position on exclusive federal authority over LNG issues.

The Port of LB LNG site sits on CA state tidelands (operated by the PoLB as a public trust granted by the state). In December 2004, as previously reported by LBReport.com, CA Governor Arnold Schwarzenegger's press office declined comment on the verbiage.

In January 2005, the LB City Council requested a study session on the appropriateness of locating an LNG facility in the Port of LB. At last report, that session was expected sometime in early April.

LBReport.com maintains a link on our front page to a compilation of our LNG coverage. To view it, click here.