Groups Support Senate Bill to Restore State’s Right to Choose If Liquefied Natural Gas Terminals Are Built

Contact: Rory Cox, California Program Director, Pacific Environment                        
(415) 399-8850 x302 or rcox@pacificenvironment.org

San Francisco, CA – Over 55 environmental groups, community groups and businesses representing Oregon, California, the Gulf States and the East Coast asked Congress to take action to return the permitting authority of terminals to import liquefied natural gas (LNG) to the states. The groups sent letters to Senator Ron Wyden of Oregon thanking him for his proposed legislation on the matter, and to other members of the Senate requesting they sponsor Wyden’s Bill. The letter asks Senator Wyden to take further action to see through passage of the bill.

The Wyden bill, co-sponsored by Senators Clinton, Obama, Lieberman and others, would return to state and local governments the siting authority for terminals to import LNG. The bill has bi-partisan support. Since siting authority for LNG terminals was revoked in the Energy Policy Act of 2005, state and local agencies and communities have been engaged in bitter fights with the Federal Energy Regulatory Commission (FERC), which now has the final authority in permitting on-shore LNG terminals.

The letter states, "S.2822 (the bill number) provides an excellent way to decentralize the current authority maintained by the Federal Energy Regulatory Commission in LNG terminal siting . . . it would stop the wasteful process that has led to numerous, unnecessary LNG permitting battles throughout the country . . . such processes have resulted in high costs for cash-strapped government agencies." The letter also cites the conflict between LNG and state initiatives to reduce greenhouse gas emissions, and it cites how the current law has created an unequal playing field where FERC has authority over on-shore terminals, but state and local agencies have authority over off-shore.

Since FERC took over LNG permitting authority in 2006, there have been numerous contentious battles between FERC and the federal government in coastal states such as California, Oregon, New Jersey, Louisiana, Maryland, other states. Organizations representing most of these coastal states signed on to the letter.

The letter to Senator Wyden can be downloaded by clicking here.

The letter asking other Senators to co-sponsor can be downloaded by clicking here.

The proposed legislation introduced by Senator Wyden is available here: http://thomas.loc.gov/cgi-bin/query/z?c110:S.2822.IS:

Background on Senator Ron Wyden's bill on LNG Terminal Siting:

Problem:

1. LNG (Liquefied Natural Gas) terminals are proposed throughout the U.S. by competing companies. LNG carries with it high potential risks to human health, safety and the environment.

2. As of 2006, the lead agency for LNG terminal siting for land-based terminals is the Federal Energy Regulatory Commission. This provision was written into the Energy Policy Act of 2005 largely due to pressure from the LNG industry.

3. FERC’s stated policy on LNG siting is to permit all projects that comply with regulations, and let the market decide which are most viable. This has led to a flurry of proposals nationwide, when it is widely known that there is only a need for a few terminals to meet national demand.

4. The FERC takeover of siting also has led to an uneven playing field, with FERC being the lead agency for land-based terminals, and states having the lead role in offshore terminals.

5. The burden of regulatory due diligence has fallen on states and counties, which must evaluate each proposal and undergo a sometimes contentious public process, even though it’s known that most terminals will not be built.

Solution:

S2822, the Wyden Bill, will repeal the Federal takeover of LNG siting, and return the lead agency status to states.

Facts:

1. In some areas of the U.S. where LNG projects are proposed, there is no proven need for this imported fossil fuel. For example, a recently completed report by the Oregon Department of Energy concluded that LNG supplies were not necessary for the Pacific Northwest, and in fact were more expensive than domestic supplies.
2. According to numerous studies, most notably CarnegieMellonUniversity, LNG carries a lifecycle greenhouse gas emissions level similar to coal. LNG imports are thus in violation of some of the new state greenhouse gas laws.
3. FERC's authority only extends to on-shore LNG projects. Off-shore terminals are still permitted by state and local governments. This has created an uneven playing field. For instance, all of the LNG terminals proposed for California fall under state jurisdiction, while those in Oregon fall under federal jurisdiction.
   

What S2822 Does:

The law simply repeals the section of the Energy Policy Act of 2005 that gave federal authority over LNG terminal siting.

Sponsors as of August 5, 2008: Cantwell, Cardin, Clinton, Dodd, Lieberman, Mikulski, Obama, Smith.