Court upholds Long Beach port decision to stop LNG terminal

A Los Angeles Superior Court judge Monday affirmed a 2007 Port of Long Beach decision to end development of a proposed 25-acre, $750 million liquefied natural gas import terminal in Long Beach Harbor.

In Judge James Chalfant's ruling, issued Monday against Mitsubishi and ConocoPhillips subsidiary Sound Energy Solutions, he said the Long Beach Harbor Commission acted within the law when it decided in January 2007 to shut down the environmental impact report process on the SES-proposed project.

The five-member harbor commissioners effectively scrapped the three-year old project on Jan. 22, 2006 after deciding the terminal posed nsurmountable legal and safety challenges.

Local interest and community groups, who feared a catastrophic accident or terrorist attack at the terminal would cause severe damage and loss of life in the harbor and adjacent downtown Long Beach area, were vocal critics of the plan leading up to the board vote.

Long Beach Mayor Bob Foster called the LNG terminal the "wrong project in the wrong location, while two other key government agencies involved in the process, the California Coastal Commission and California Public Utilities Commission, also expressed serious reservations.

Project developer SES, which claims to have spent $80 million on the project development to date, sued the port over ending the EIR process. The firm claimed the port violated the California Environmental Quality Act by abandoning the project and that the abandonment decision was a prejudicial abuse of discretion. SES asked the court to force the port to vacate the January 2007 decision and move forward with the EIR.

Chalfant ruled the SES petition's arguments regarding the CEQA were irrelevant because the memorandum of understanding between the port and SES to work on the project had expired.

When the board decided in January 2007 to disapprove the LNG project, there was no CEQA project left, Chalfant wrote in his ruling. In short, the project was dead. He also ruled that SES failed to prove the case against the port of prejudicial abuse of discretion. SES, which had no legal or contractual interest in he property site, did not have due process right to notice and an opportunity to be heard, he wrote.

In addressing a last issue raised by SES, that the port decision was arbitrary and capricious, the judge appeared to sum up the problems with the entire SES petition: The short answer is that the issue is a question on which the board had almost compete discretion. So long as the decision was not tethered to a violation of law, and SES cites to none, the courts may not interfere with its decision not to enter into a public leasing project. The court will formally enter the decision on April 9, after which SES could appeal the decision.

Source: American Shipper