US Congress says FERC has sole jurisdiction over LNG terminals

Washington (Platts)--22Nov2004

The US Congress, responding to the California Public Utilities Commission's
claim that it has jurisdiction over a proposed liquefied natural gas import
terminal in the state, supported the Federal Energy Regulatory Commission's
contention that it has sole authority over LNG terminals under section 3 of
the Natural Gas Act. In report language accompanying an omnibus 2005
appropriations bill, House and Senate conferees "agreed on this point" by
FERC. The conferees explicitly "disagree with at least one state government
agency that it should be the authority responsible for LNG terminal siting
within its boundaries, rather than FERC." The appropriations act passed both
chambers of Congress, but is being held in the Senate, which is awaiting a
technical correction in the House before it can be sent to the White House for
President Bush's signature. FERC has maintained it has plenary jurisdiction
over a proposed LNG import terminal for Long Beach, California, and the CPUC
appeal is pending in federal court.

The state has argued that it has jurisdiction because the terminal would only
directly interconnect with intrastate gas pipelines. The conference report
focused on the import nature of the terminal, saying the NGA "clearly preempts
states on matters of approving and siting natural gas infrastructure
associated with interstate and foreign commerce" and that there should be a
single approval process for the facilities. "Because LNG terminals affect both
interstate and foreign commerce, LNG facility development requires a process
that also looks at the natural public interest, and not just the interest of
one state," the report said. The conferees also said that, "as a matter of
energy supply, the nation will need to expand its LNG infrastructure over the
decades to come to satisfy natural gas demand" and "any dispute of LNG siting
authority now will be counterproductive to meeting our natural gas needs in
the future."

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