San Diego Union Tribune

July 29, 2005

Energy bill a big body blow to California, say opponents

By Toby Eckert

WASHINGTON – Congress is poised to pass an energy bill that could have far-reaching implications for California.

The mammoth legislation, which passed the House yesterday and is expected to clear the Senate today, would weaken the state's ability to block liquefied natural gas, or LNG, facilities.

The bill orders an inventory of offshore oil and natural gas reserves that are now off limits to drilling and allows federal courts to assume jurisdiction over lawsuits against makers of MTBE, an additive that has been banned in California.

Consumer activists said the bill would do the state more harm than good.

"It's lights out for California consumers," said Doug Heller, executive director of the Santa Monica-based Foundation for Taxpayer and Consumer Rights. "They're weakening consumer protections, and they're taking away the state's right to determine whether new energy facilities are safe and appropriate."

But supporters said the legislation would put the country on the road to stepped up energy production and, ultimately, lower energy prices. California motorists pay among the nation's highest gas prices.

"There is a lot that we need to do to have energy independence in this country and to lessen our dependence on foreign sources. It's a great start," said House Resources Committee Chairman Richard Pombo, R-Tracy.

One controversial provision gives the Federal Energy Regulatory Commission, or FERC, final say on the siting of LNG facilities, which handle imports of the explosive fuel.

The provision grew out of a court battle between the California Public Utilities Commission and the FERC over a proposed facility in Long Beach that would convert the liquefied fuel, which is shipped in tankers from overseas gas fields, back into a gas.

Demand for LNG is growing, but local opposition has stymied efforts to build some LNG terminals. Federal officials say states will still have plenty of say in the process, citing their authority over clean water and coastal zone management laws.

Some California officials are alarmed about a provision in the bill requiring an inventory of offshore oil and natural gas reserves. They see it as a prelude to weakening a moratorium on drilling in those waters, long coveted by energy companies.

Supporters said detailed information about the reserves was necessary to guide future policy over drilling in the areas. An inventory would "at least allow us to see what's out there," said House Energy and Natural Resources Committee Chairman Joe Barton, R-Texas.

Another controversial provision, which would have granted liability protections to makers of the fuel additive MTBE, was stripped from the final version of the legislation.

MTBE, methyl tertiary butyl ether, was widely used in California and other states to reduce air pollution from automobiles. But the substance has fouled water supplies, prompting dozens of lawsuits.

The legislation allows future MTBE suits to be transferred to federal courts, which may be less sympathetic to local concerns.

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