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    Fed'l Legislation Introduced To Give FERC Clear Authority Over LNG Facility Siting

    (February 3, 2005) -- Federal legislation to give the Federal Energy Regulatory Commission (FERC) clear, strengthened authority over siting Liquefied Natural Gas (LNG) facilities has been re-introduced in Congress...and could find its way into this year's major Energy Bill.

    While the exact bill text isn't yet on the web as we post (we'll link to it when it's posted), a release from the office of Congressman Lee Terry (R., NE) says the "Natural Gas Act" introduced January 25 would:

  • Eliminate jurisdictional conflicts regarding the siting and construction of LNG terminals -- allowing industry, communities and government to work together more easily to ensure adequate natural gas supplies.

  • Create a lead agency under the Department of Energy for LNG project review and permitting.

  • Set a deadline of one year for review of LNG terminal applications.

  • Remove regulatory uncertainties for those building or expanding onshore LNG terminals.
  • Similar legislation introduced in 2004 stalled...but this year's legislation could make its way into a major Energy Bill. In his office's release, Congressman Terry says his bill is "intended to complement a comprehensive energy bill by increasing LNG as part of America's energy portfolio."

    In his State of the Union message, President Bush indicated that passage of the Energy Bill is among his top legislative priorities.

    Throughout 2004, the Port of LB did not object to, and arguably enabled, FERC's assertion of exclusive federal jurisdiction over siting LNG facilities by the Port's processing of a Mitsubishi subsidiary's application to build an 80+ million gallon LNG facility (roughly two miles from downtown LB) while the applicant didn't seek permission from CA's Public Utilities Commission (CPUC). FERC contends (and has ruled) that the applicant doesn't need CPUC permission, saying CPUC has no power over the application. CPUC has sued FERC over this but Congressional legislation could trump the lawsuit.

    In September 2004, the Mitsubishi subsidiary amended its FERC application to include building a pipeline connecting the Port project to the So Cal Gas system. City Hall had assumed it would control whether to build the pipeline and charge for its use...but the Mitsubishi subsidiary now seeks FERC authority to build the pipeline itself.

    In November 2004 (as previously reported by a House-Senate conference committee advocated giving FERC unambiguous exclusive LNG siting authority. LB's Council-approved federal legislative agenda has for years stated a policy of defending its local control/home rule against federal encroachments.

    As reported last week, FERC has indicated it wants Congress to grant it eminent domain power over siting LNG facilities as well. If Congress agrees, LB's Harbor Commissioners would lose their ability (as landlord) to say "no" on the application they effectively enabled.

    As reported by, 1st district Councilwoman Bonnie Lowenthal has indicated that she plans to agendize a report on breaking federal developments from LB's City Attorney and the Port of LB at the February 8 City Council meeting.

    Last month, on motion by Councilwoman Rae Gabelich, the Council agreed to hold a study session on the LNG project. It's currently scheduled in April.

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

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