Wrigley Ass'n Board Urges Council To End LNG MOU
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(May 31, 2005) -- The Board of Directors of the Wrigley Association -- an influential neighborhood group spanning parts of the 6th and 7th Council districts -- is urging the City Council to end its Memorandum of Understanding (MOU) with Sound Energy Solutions, the Mitsubishi subsidiary that seeks build and operate an 80+ million gallon Liquefied Natural Gas (LNG) facility in the Port of LB.
In a letter to Mayor Beverly O'Neill and Councilmembers (reproduced in full below), Wrigley Association president Joan V. Greenwood writes in part, "[S]ecurity and disaster response expenses for a land-based facility would be borne primarily by taxpayers. These costs would far exceed any local benefit resulting from decreased price for natural gas."
Ms. Greenwood's letter adds, "There is already sufficient information based on the Sandia Report that the preferred mitigation strategy in high population urban areas is offshore operations. This approach is not only more prudent from a hazardous materials management position, but also greatly reduces the potential for adverse impacts on the City’s budget."
The Wrigley Association -- whose boundaries stretch from the 405 freeway to PCH and LB Blvd. to the L.A. river -- prepared the letter in connection with a May 24 agendized item by City Manager Jerry Miller and City Attorney Bob Shannon which sought Council direction on how to proceed concerning the City Hall LNG MOU (terminate, suspend or revive it).
However, following objections voiced outside of public Council proceedings by 7th district Councilwoman Tonia Reyes Uranga, Messrs. Miller and Shannon agreed to remove the item from the May 24 agenda and Mayor O'Neill declared it would be delayed until June 21.
Within days, Councilmembers Frank Colonna, Rae Gabelich and Bonnie Lowenthal moved to bring the LNG issue to a showdown vote at the June 7th Council meeting, agendizing an item that calls for ending City Hall's LNG MOU.
Councilwoman Reyes Uranga, whose district includes part of the Wrigley district, has not supported calls for ending the MOU and has instead agendized her own item for June 7th that proposes adopting a "City Council position regarding the development of a proposed LNG facility in the Port of LB."
The Colonna-Gabelich-Lowenthal item -- now effectively backed by the Wrigley Association -- would end City Hall negotiations (via LB Energy) with the LB LNG applicant for a possible future pipeline and a long-term gas supply.
In a letter with text reproduced on its webpage, Wrigley Association president Joan Greenwood writes Mayor Beverly O'Neill and members of the City Council:
The Board of Directors of the Wrigley Association urges you to formally terminate negotiations with Sound Energy Solutions ("SES/Mitsubishi") regarding a long-term natural gas supply and the feasibility of construction and operating interconnecting gas pipelines to the proposed liquefied natural gas ("LNG") facility, per the Memorandum of Understanding approved by City Council on May 13, 2003. This position is based on economic considerations.
An application for a LNG facility to be located 21-miles off the Ventura coast has been accepted by the U.S. Coast Guard. Offshore facilities require an additional capital investment of $100,000,000 versus an on-shore site. Any company locating on-shore has a major competitive advantage. In addition, security and disaster response expenses for a land-based facility would be borne primarily by taxpayers. These costs would far exceed any local benefit resulting from decreased price for natural gas. Moreover, the City would be remiss in exercising its fiduciary responsibility by limiting negotiations to a single potential operator.
To resume negotiations on an exclusive basis before the Environmental Impact Report is certified is also unwise. There is already sufficient information based on the Sandia Report that the preferred mitigation strategy in high population urban areas is offshore operations. This approach is not only more prudent from a hazardous materials management position, but also greatly reduces the potential for adverse impacts on the City’s budget.
Therefore, the Wrigley Association urges you to formally terminate negotiations with SES/Mitsubishi. Thank you for your time and consideration of our position on this matter.
Very truly yours,
Joan V. Greenwood, President
City Hall's MOU is cited in a separate Port of LB MOU with the project applicant which states in pertinent part, "Concurrent with any final agreement with the Port of Long Beach, SES will enter into an arrangement for the benefit of the citizens of Long Beach, the Long Beach Energy Department, and the Port of Long Beach to provide liquid natural gas (natural gas.)"
In their May 24 agendized item, City Manager Miller and City Attorney Shannon stated that the Port MOU verbiage means, "[N]o final agreement with the Port will occur under the Port’s existing MOU unless SES successfully concludes negotiations on the two issues discussed in Long Beach Energy’s MOU approved by the City Council."
Under LB's current City Charter, the Harbor Commission is governing body with the leasing authority (and thus the ultimate local power) to say "yes" or "no" to allowing the LNG facility on Port property (Pier T, near the eastern part end of the Port).
LB's Wrigley District gets its name from chewing gum magnate William Wrigley who created the original subdivision pattern for the District in 1905.
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