(February 6, 2005) -- Councilmembers Bonnie Lowenthal and Frank Colonna have jointly agendized an item for the Feb. 8 City Council meeting requesting "an immediate report" from the City Attorney and the Port of LB regarding a move by the Federal Energy Regulatory Commission (FERC) to seek federal legislation giving FERC clear and unambiguous authority over siting onshore Liquid Natural Gas (LNG) terminals.

Councilmembers Lowenthal and Colonna also seek a Council resolution for transmittal to Washington and Sacramento lawmakers stressing LB's support for home rule over LB Port matters. A decision on whether to allow a Mitsubishi subsidiary ("Sound Energy Solutions") to build and operate a proposed 80+ million gallon LNG facility roughly two miles from downtown LB is currently slated to made by LB's non-elected (Mayor chosen, Council approved) Board of Harbor Commissioners.

In an agendizing memo, Councilmembers Lowenthal and Colonna ask that City Attorney and PoLB discuss FERC's request "and the potential for the Port of Long Beach, City of Long Beach, or the State of California to lose local control over such important decisions. Furthermore, as the issue of "home rule" falls under the City’s adopted federal legislative agenda, we request that the City Attorney prepare a resolution and that said resolution be communicated to our federal and state representatives."

As first reported locally in late January 2005 by LBReport.com, materials on the U.S. Senate Energy and Natural Resources Committee web site indicate that FERC has communicated that it wants unambiguous siting authority -- including the power of eminent domain -- over siting onshore Liquefied Natural Gas (LNG) facilities.

The Senate posted documents indicate that FERC referred in the Jan. 24 meeting (without mentioning LB details) to a controversy stemming from the Port of LB's action in processing the application of a Mitsubishi subsidiary ("Sound Energy Solutions") to build and operate the PoLB LNG facility. The firm is seeking regulatory permission from FERC but not from the CA Public Utilities Commission (CPUC). FERC says existing federal law gives FERC exclusive authority over LNG facility siting and safety issues and says the applicant doesn't need CPUC permission. CPUC disagrees, has launched its own state proceeding...and is suing FERC in federal court to enforce CA law which CPUC says gives the CA agency regulatory and safety authority.

The CPUC v. FERC LB dispute is considered a major test case with national implications. A number of state and local officials across the country have voiced opposition to FERC's position.

For over a year, LB LNG project critic Bry Myown has warned of risks in proceeding with the project. The Port of LB, LB City Hall and much of downtown LB's establishment -- at the eye of the storm -- downplayed her arguments...until the possibility of federal eminent domain power (the ability to take land for a project) arose.

As previously reported by LBReport.com, in July 2004 the LB City Attorney's office gave Councilmembers a memo detailing the city's powers over the LNG application. The memo noted that the Port of LB has authority as landlord 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 (and presumably charge a fee for its use).

In fall 2004, as reported by LBReport.com, 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.

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 contract with E. Del Smith & Co., a DC firm that for years has handled DC legislative advocacy for both 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)...and when asked in December 2004 by LBReport.com, the press office of CA Governor Arnold Schwarzenegger said the Governor had no comment on the dispute. LB area state Senator Alan Lowenthal and Assemblywoman Betty Karnette have both previously indicated that they support CPUC's position.

Councilwoman Lowenthal's district includes parts of downtown as well as southern WLB near the Port. Councilman Colonna chairs the Council's Federal Legislation Committee.

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.