State, federal role sought in LNG sitings

U.S. Sens. Olympia Snowe, R-Maine, and Dianne Feinstein, D-Calif., Monday announced the introduction of legislation that would require states and the Federal Energy Regulatory Commission to share jurisdiction over the siting of onshore liquefied natural gas facilities.

Locally, residents are interested in the Snowe-Feinstein bill because of the $400 million LNG terminal that has been proposed for Split Rock at Pleasant Point in Washington County. They want to know if there will be a state voice in the process.

Last week, four of the seven tribal councilors at Pleasant Point approved a land-lease agreement with Oklahoma-city based Quoddy Bay LLC and its president Don Smith to site a facility on reservation land.

President Bush has urged giving FERC sole authority. His proposal has been included in the energy bill passed by the House, and it is expected that the energy bill being considered by the Senate Energy and Natural Resources Committee will include a provision to give FERC exclusive jurisdiction over the siting of LNG facilities.

Although the tribe has maintained that the federal government has jurisdiction over tribal lands, the Pleasant Point plan will involve state approval.

“The tribe would align itself with the president’s position, it is federal lands and we would expect that the feds have exclusive authority over it, but we also are sensitive to what Don has promised to [Gov. John] Baldacci and we would be willing to comply with whatever process is out there,” tribal spokesman Craig Francis said Monday.

Quoddy Bay spokesman Dennis Bailey said Monday that the company has always said it planned to submit its application to both state and federal regulatory agencies.

“We understand what the federal government is doing, but it hasn’t been a part of the company’s plan to … end-run around state and local authority,” Bailey said. “It’s not really our agenda.”

Bailey said the land-lease agreement has been sent to the Bureau of Indian Affairs. “We feel it will pass muster there,” he said. The next step calls for engineering studies and regulatory approval.

If everything remains on track, Bailey said, the facility is expected to be up and running by 2009.

Although Quoddy Bay said it plans to work with state agencies, the Snowe-Feinstein legislation, if approved, would be applicable to all states, including California, where LNG is also a hot topic.

“The decision reached in the last year to site LNG facilities in Maine has divided communities and generated controversy across the state. As such, it is imperative that the state government, which knows its citizens’ concerns and is accountable to them, work through the various concerns to reach the best possible outcome for all interested parties,” Snowe said.

“I believe that any decision on where to build LNGs must not be left exclusively at the federal level. States must have an equal say as to what happens in their own back yard – and they should have the right to establish more stringent standards for LNG facilities than what FERC sets if their residents want more protective ones.”

LNG opponent Linda Godfrey praised Snowe and Feinstein. “We are very pleased and proud of Senator Olympia Snowe’s willingness to stand and speak strongly for individual and state’s rights especially in this specific matter before us,” she said. “We expect that as Governor Baldacci earlier said that all state regulations will be followed to their most stringent requirements will be true in the case of any LNG facility which may come to Maine.”

The legislation by Sens. Feinstein and Snowe is intended to ensure that states are able to have a say over the location of LNG terminals. Current law is not clear as to what entity has the jurisdiction to site LNG facilities.

The Feinstein-Snowe legislation would:

. Authorize concurrent state and federal jurisdiction for the siting, construction, expansion, and operation of liquefied natural gas import terminals.

. Provide “emergency backstop” authority to prevent manipulation, which requires the LNG facility in conjunction with the state and federal authorities to develop a backup plan should supply be constrained in any way for any reason.

. Develop a mediation structure to address conflicts that arise between the state and the Federal Energy Regulatory Commission.

. Allow states to impose and enforce more stringent safety requirements on LNG terminals than those required by the federal government by amending the Natural Gas Pipeline Safety Act of 1968.