State Seeks Rehearing on LNG Projects

California officials wrangling with federal regulators over who has the power to approve the building of controversial energy terminals in the state are trying to force that fight into the courts.

In a petition filed with the Federal Energy Regulatory Commission, state officials said the agency erred when it gave itself sole authority over the construction of liquefied natural gas terminals. The petition, filed Friday, asked the commission for a rehearing.

If the rehearing is denied, that would clear the way for the state’s Public Utilities Commission to sue FERC in federal court.

In addition, the PUC approved a measure last week that may give it a way to bring the issue before state courts.

For months, the fight between federal and state agencies has raged on paper, spawning reams of memos and procedural filings. The bickering paused last month, when FERC declared itself the sole authority over the siting and construction of LNG terminals, including a proposed facility in Long Beach.

“FERC’s ruling was basically a power grab” for state gas operations, said PUC Commissioner and former president Loretta Lynch. By filing for a rehearing on the Long Beach proposal, PUC resumed the fight.

But PUC officials feared FERC would simply sit on their request for rehearing, Lynch said.

Such a move would prevent California officials from taking the issue before a federal court.

So, PUC members voted last week to force the company behind the Long Beach project to apply for a state permit. If the company -- Sound Energy Solutions, a Mitsubishi subsidiary -- refuses, PUC could sue for compliance in a state Superior Court.

Either way, the PUC wants the issue before a judge, Lynch said, noting several previous court cases led to rulings in her agency’s favor on a variety of energy-related issues.

FERC officials responded Tuesday, saying their agency would seriously and quickly consider the PUC’s request for a rehearing.

Four LNG plants exist in eastern and southern states. Companies have proposed three in California -- in Long Beach, Humboldt Bay and off the Ventura coast.

Companies want to build more because the fuel cuts cost and increases capacity. When chilled at minus 260 degrees Fahrenheit, natural gas turns into liquid and shrinks to a fraction of its original size. Companies then can easily haul large quantities by ship.

But critics say the highly flammable liquid makes an LNG terminal at Long Beach a dangerous proposition. In January, an explosion at an Algerian LNG plant killed 27 people. Last month, safety concerns crushed plans for LNG terminals in Eureka, Calif., and Harpswell, Maine.

Since FERC’s March 24 declaration of sole authority over LNG plants, several other groups have entered the brawl, laying their own claims to authority over the Long Beach project.

Agencies -- regulating areas from fish and game to water quality -- have filed petitions with the federal government, asking for a rehearing or clarification of FERC’s ruling.

One of them, South Coast Air Quality Management District, recently filed a report, stating that the LNG plant in Long Beach could worsen pollution, adding 15 tons of microscopic particles to the air each year.

Sound Energy has fought its critics with a study of its own, releasing a poll this month that says a majority of Long Beach registered voters -- 56% -- want the LNG project.

But opponents, including environmental activists, raised doubts about the poll.

“This poll looks like what you would use to sell this project to the people of Long Beach,” said Susan Jordan, director of the California Coastal Protection Network. “My interpretation of their numbers is that the majority of people in Long Beach simply don’t know anything about this project.”

Despite months of wrangling between government agencies, she said, ignorance among Californians about the project remained the biggest problem in the debate. “California should be in the driver’s seat. It should be up to Californians if, where and when we have LNG plants.”