Long Beach Postpones Decision on Stopping LNG Supply Talks

In a move that drew widespread local news media attention, the Long Beach, CA, City Council Tuesday evening at the last minute postponed until late next month a decision on whether to break off two years of negotiations on behalf of its municipal energy department with the sponsors of a proposed liquefied natural gas (LNG) receiving terminal in its harbor.

Although these talks are separate from Port of Long Beach's siting decisions, the prospect of a rejection of even a peripheral issue to the siting question drew major local interest. At stake is an agreement that the city entered into two years ago with Mitsubishi's U.S.-based subsidiary, Sound Energy Solutions (SES), to negotiate a possible supply contract. SES has since added 50-50 partner ConocoPhillips to the LNG project. This is separate from the ultimate question of whether the proponents will get a permit from the Port and the Federal Energy Regulatory Commission to allow construction to begin.

However, the city talks with SES do involve added energy infrastructure, including a 2.5-mile natural gas transmission pipeline to bring supplies into Long Beach's municipal natural gas network.

A meeting of city officials, including the city attorney's office, prior to the late afternoon council meeting prompted the delay. However, a spokesperson for the city said the council members gave no reason publicly for delaying a vote on a resolution that read. "...to authorize the city manager to terminate negotiations with SES/Mitsubishi regarding a long-term natural gas supply and the feasibility of constructing and operating interconnecting natural gas pipelines to the proposed LNG facility, pursuant to a memorandum of understanding approved by the city council May 13, 2003."

In advance of the agenda item Tuesday, the Los Angeles Times published a major "Q&A" feature raising basic questions about LNG along the California coast -- noting there are two onshore and two offshore receiving terminal proposals. Under the headline, "Debate Over Concentrated Fuel Comes to Long Beach," a Times environmental reporter who covers Long Beach-Los Angeles Harbor developments answered generic questions, such as "What is LNG? Why is it controversial? What are its effects on the environment?"

In answer to the "controversial" question, the Times' report called LNG's highly concentrated nature "both a benefit and a curse," siting the shipping convenience, but also safety risks of a "massive fire." It added that in Long Beach, beyond the normal safety concerns with hazardous cargoes, residents are concerned about an LNG terminal being a target for terrorism.

(Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.


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