Act of Congress may mess with LNG Permitting Processes

Currently, the permitting processes for four LNG terminals are under way in California. The most advanced, BHP Billiton's Cabrillo Port is undergoing a joint EIR/EIS Process through the US Coast Guard and State Lands Commission.

Because the Sound Energy/Mitsubishi proposal is on land, the State Public Utilities Commission claimed to have sole permitting authority. This led to a battle with the Federal Energy Regulatory Commission. Now, Congress is stepping in:

A handful of short paragraphs tacked onto a massive federal spending bill could weaken California's fight to approve or veto the location of liquefied natural gas terminals planned for the state.

The rider asserts that federal law passed decades ago gives federal regulators, not state officials, the exclusive legal right over LNG siting decisions.

The four-paragraph rider, attached to a report on the lengthy congressional appropriations bill, specifically takes issue with the California Public Utilities Commission.

The PUC is locked in litigation with the Federal Energy Regulatory Commission over the siting authority question. Both sides contend they have exclusive jurisdiction to rule on a proposed LNG terminal planned in Long Beach. The U.S. Ninth Circuit Court of Appeals is considering the question.

The huge appropriations bill has been passed by both houses of Congress. But it has not been sent to President Bush because of a dispute over a section related to income tax.

Of course, it is unclear whether and how such a change would affect projects already well into the permitting process.