Building Trades News

Fate of $800 Million Project Remains in the Air

Sound Energy Solutions is pushing forward on its demand for completion of an EIR on the proposed $800 million LNG terminal in Long Beach. A hearing is scheduled for February that could determine whether the EIR process will be allowed to be competed. The fate of the project hangs in the balance. In January of last year, the Port of Long Beach decided to end work on the EIR, saying the document "is and in all likelihood will remain legally inadequate.

" SES is a subsidiary of ConocoPhillips/Mitsubishi, and had invested more than $80 million in numerous environmental reports, developmental studies and marketing campaigns, among other things, before the port abruptly ended negotiations. The proposed LNG terminal was warmly received when it was first introduced in 2003. If approved, the Long Beach Long LNG terminal would add an additional 20 percent to Southern California’s gas supple.

Thomas Giles, President and CEO of Sound Energy’s said the goal of the petition, known as a writ of mandate, is to force completion of the costly EIR so "the process is finished in an orderly way. Then we’d ... all have the best information available to make a decision on the project," he said. The two storage tanks for the proposed Long Beach LNG receiving terminal will be full-containment tanks. This means there will be both an inner and an outer tank. The inner tank is made of steel with 9 percent nickel content. This specialized steel can withstand the very cold temperatures of LNG. There has never been a crack failure in the tanks made of nickel steel in the 35 years of their use.

The outer tank is 32 inches of pre-stressed concrete. There will be several feet of insulation between the inner and outer tanks. There has never been an incident at any LNG facility in the world requiring the secondary outer tank to hold the contents of the inner tank. LNG is stored under atmospheric pressure. The lack of pressure greatly reduces the possibility of tank failure. Demand for natural gas is growing in California and throughout the U.S.; however, the domestic supply is depleting.

The Energy Information Administration (EIA) estimates that LNG could comprise as much as 21percent of the nation’s total natural gas supply by 2025. One reason for this increase in demand is that natural gas is a cleaner fuel for electricity generation. Natural gas has emerged as the preferred fuel and is the fastest growing source for electric power. Because of California’s tough air quality standards, it is estimated that 90 percent of future power plants will use natural gas. Currently, natural gas comes to Southern California through pipelines that originate as far away as Texas, Wyoming and Canada. Increased demand for the gas from states along the pipeline forces Californians to pay higher prices. This dependence on distant supply sources contributed to the price spikes and blackouts of the 2000-2001 energy crises. These energy crises highlighted the need for California to diversify its energy supply sources and strengthen its energy infrastructure.

The proposed LNG terminal in the Port of Long Beach could provide up to 20 percent of Southern California’s natural gas needs. SES believes that the LNG terminal will be a significant factor in helping to reduce air pollution in Southern California ports. SES has been actively promoting the use of low-emission LNG yard hostlers in the Ports of Long Beach and Los Angeles and in intermodal rail yards since 2005. On Oct. 16, 2007, SES and International Transportation Service, Inc. (ITS) signed a Letter of Intent to jointly develop a one-year demonstration project to test the operations of three LNG-powered yard hostlers at the ITS container terminal in the Port of Long Beach.

This new demonstration project with ITS is the fourth project that SES has worked to develop. Other projects have already been implemented with Yusen Terminals Inc. in the Port of Los Angeles, Long Beach Container Terminal in the Port of Long Beach, and BNSF Railway in the City of Commerce. Currently, there are approximately 3,000 heavy-duty LNG-powered trucks, buses, and vehicles operating throughout California and other parts of the nation. LNG engines produce 93 percent lower nitrogen oxide and particulate matter emissions, 100 percent less sulfur dioxide emissions, and 20 percent fewer greenhouse gas emissions than their traditional diesel counterparts. SES estimates that if all of the estimated 1,500 yard hostlers now operating in the Ports of Long Beach and Los Angeles were replaced with LNG-powered units, the annual emission reduction within the local community would be nearly 1,900 tons of nitrogen oxide and particulate matter combined and an annual reduction of over 11,000 tons of greenhouse gas emissions. In November 2006, the Ports of Long Beach and Los Angeles jointly adopted the San Pedro Bay Clean Air Action Plan (CAAP).

The CAAP proposes that nitrogen oxide emissions in the harbor be reduced by more than 45 percent and particulate matter emissions by more than 50 percent by 2012. To achieve this important goal, the CAAP will require that cargo-handling equipment and on-road port drayage trucks be replaced by lower-emission technologies, including LNG yard hostlers and over 5,000 LNG Class 8 trucks. "In the coming years, SES is confident that its proposed LNG terminal can play an increasing role in the continued supply of reliable, safe and cost-effective LNG to the regional market for clean fuel for heavy-duty transportation.