Who Controls Gas Ports?

Demand for natural gas in the US continues to rise, far faster than North American suppliers can meet. The Census reports more than half of US homes now are gas-heated. Last week, the Energy Information Administration predicted a 3.7 percent increase for the fuel next year. To meet demand, the US will need to import more liquid natural gas (LNG).

APFC Energy, a Washington-based consulting firm, forecasts that the global oil and gas industry will spend more than $100 billion over the next decade to transport LNG around the world. At least 30 LNG terminals are in the works in the US. Currently, it has only three.

But LNG also creates environmental and aesthetic concerns about placing terminals near coastal areas - as well as fears of a terrorist attack.

Still, should the federal government be in charge simply to ensure there's enough natural gas to meet rising demand nationwide? That's what the Senate's Energy and Natural Resources committee chair, Pete Domenici, wants.

The New Mexico Republican put language in the 2005 spending bill signed by President Bush last week that suggests the feds, not the states, should control LNG ports - setting the stage for the idea to become law when the energy bill's brought up in Congress next year.

To justify federal authority, Mr. Domenici and other senators on his committee cite the fact that some LNG terminals engage in both interstate and foreign sales, and therefore need to be controlled by the Federal Energy Regulatory Commission (FERC).

But elected officials in states where LNG ports have been proposed don't much like the idea of losing any say in where such a port might be sited. Also, groups such as the nonprofit Center for Public Integrity maintain that the FERC has cozy ties with the very industry it regulates.

Already, the FERC has muscled its way over California's objections to a private plan to build a LNG terminal at Long Beach simply by issuing a permit to do so. California has a pending court challenge against the move. State officials argue that because the gas will be used only within the state, the Domenici "interstate commerce" notion doesn't apply.

States should have input on decisions over whether to have LNG terminals, and where to locate them. They know their communities, can highlight safety issues, help make sure LNG site locations are consistent with state and local laws, and act as brakes on the likely rush to build more terminals.

The Center for Public Integrity also asserts too many meetings between FERC and companies interested in building terminals have been held behind closed doors. The voices of local environmental groups and civic organizations must be heard.

Better communication between states and the feds should help. But a compromise is needed that allows federal officials to feel confident about the necessary number and security of LNG ports but retains some state authority over their safety.

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