Governor Schwarzenegger Disapproves BHP Deepwater Port License

California Governor Arnold Schwarzenegger issued his formal disapproval to United States Maritime Administrator Sean T. Connaughton for the licensing of the BHP “Cabrillo Port” LNG deepwater port planned for construction off the coast of Ventura County, California. The Governor did however make it clear that he supports the state’s need for an increased LNG supply. Excerpts from the Governor’s letter follow:

While I believe strongly that California needs to expand its access to natural gas resources, specifically Liquefied Natural Gas (LNG), I am disapproving this application based on my review of the Environmental Impact Report/Environmental Impact Statement (EIR/EIS) that are required by state and federal law, respectively. Specifically, the Cabrillo Port LNG project as proposed would result in significant and unmitigated impacts to California’s air quality and marine life. California policy agencies have determined that California needs LNG. In its 2005 Integrated Energy Policy Report, the California Energy Commission indicated that California faces significant challenges in ensuring adequate natural gas supplies at reasonable prices to meet growing demand. California imports 87 percent of its natural gas supplies and our geographic location, literally at the end of interstate pipelines, puts California consumers at risk of price spikes with every winter storm or hurricane in other parts of the country. More than 40 percent of the electricity in California is generated using natural gas as a fuel. California consciously chose natural gas as a fuel source to meet the demands of a growing population and booming economy due to its clean environmental footprint compared with coal and other fossil fuels. And while California has implemented one of the most aggressive renewable energy initiatives in the United States, natural gas serves as a critical “bridge” fuel that can provide cleaner energy while our State and nation transitions to renewable resources like solar, wind, ethanol, hydrogen and biomass Liquefied Natural Gas can and must be an important addition to California’s energy portfolio. However, any LNG import facility must meet the strict environmental standards California demands to continue to improve our air quality, protect our coast, and preserve our marine environment. The Cabrillo Port LNG project, as designed, fails to meet that test.

LNG is important to California’s energy future, and I believe an offshore LNG facility can be constructed along the coast that meets California’s stringent environmental standards. However, the Cabrillo Port LNG project falls short. I appreciate the opportunity afforded to me under the Deepwater Port Act to act on BHP’s Cabrillo Port LNG Deepwater Port application. Although I strongly support building an offshore LNG facility in California, based on the unmitigated and significant environmental impacts associated with Cabrillo Port LNG’s proposed project, I disapprove this application. The Maritime Administration has issued six deepwater port LNG licenses to date and is currently reviewing eight applications (three applications are proposed off the coast of California).