Assembly OKs bill to give up control of LNG

The State Assembly looks like it is ignoring the laws of unintended consequences, approving a measure trying to assert State control over liquefied natural gas terminal site selection which will really shift power to the Federal Energy Regulatory Commission.

A bill slowing the race to build natural gas terminals on the California coast passed out of a key legislative committee Wednesday, after the Assembly speaker removed a member who previously did not vote for it and appointed a new one who did.

The move breathed new life into a measure that the oil and natural gas industries thought they had buried a week ago. Its revival highlights the high- stakes expansion effort by natural gas producers, who have four proposals to build tank farms that would receive shipments of liquefied natural gas and convert it back to gas for use in the state.

Energy companies backing the projects already have invested tens of millions of dollars in a labyrinthine regulatory and permit approval process involving dozens of local, state and federal agencies.

Of course, once the Federal Energy Bill becomes law, the State's arm could only reach to projects offshore--projects on which it already has jurisdiction--thereby giving a tactical advantage to onshore projects for which only FERC has authority.