California LNG hits roadblock, lawsuit

Wednesday, January 24, 2007 |
LOS ANGELES (AP) - The South Coast Air Quality Management District sued California public utility officials, claiming the liquefied natural gas that officials approved for use in the state could worsen air pollution.
Energy providers plan to spend about $3 billion on the construction of seven natural gas terminals on the coast of California and Baja in Mexico. The air-quality agency alleges that natural gas could set back progress toward clean air. The lawsuits were filed with the California appeals court and the state Supreme Court.
The California Public Utilities Commission has approved a standard that will allow oil companies and other energy providers to burn the gas to generate power. Because imported liquefied natural gas burns hotter than domestic gas, it creates more pollution.
Sam Atwood, a district spokesman, said the imported fuel won't increase pollution if it is mixed with an inert gas such as hydrogen, which some cities on the East Coast are already doing. Public utilities President Michael R. Peevey said pollution would not increase under the standard approved in September.
Meanwhile, on Monday, harbor commissioners in Long Beach voted to end a review of a proposed natural gas terminal in the Port of Long Beach. Commissioners said they based their decision in part on an assessment by Long Beach City Attorney Robert Shannon, who concluded that an environmental impact report on the project was legally inadequate.
As a result of the decision, the commission surmised that a deal between the city and the firm behind the project, Sound Energy Solutions, was not likely to happen.
Sound Energy Solutions had offered the city $500 million over 40 years in franchise and wharf fees, property taxes, user fees and other funds.
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