US Senate rejects LNG siting amendment, passes OPEC measure

Nick Snow
Washington Correspondent

WASHINGTON, DC, June 20 -- The US Senate rejected a proposal to give governors a final word in siting onshore LNG terminals but approved a measure authorizing the Department of Justice to prosecute members of the Organization of Petroleum Exporting Countries for violating US antitrust laws.

The proposals were offered June 19 as amendments to the Democratic leadership's energy legislative package that came to the floor last week. Of the two, the LNG terminal siting amendment proposed by Benjamin L. Cardin (D-Md.) was more significant because it was the first effort to modify procedures established in the 2005 Energy Policy Act (EPACT). It failed by 53 to 37 votes.

The second amendment, so-called NOPEC (No Oil-Producing and Exporting Cartels), which passed by 73 to 20 votes, was similar to one the Senate passed in 2006 which did not survive in conference with the US House. Sen. Herb Kohl (D-Wis.), who sponsored the 2007 version, requested a roll call vote that he hoped would increase its stature. The House passed a similar bill by 345 to 72 votes on May 22, Cardin said.

Senate Energy and Natural Resources Committee leaders opposed both proposals. Chairman Jeff Bingaman (D-NM) and Chief Minority Member Pete V. Domenici (R-NM) said the LNG terminal siting plan would undermine EPACT and the NOPEC measure would violate the sovereign immunity principle and create other problems.

Cardin's proposal reflected concerns in Maryland and some other states that local and state officials don't have enough say in choosing where LNG terminals will be located. "This amendment is not about stopping LNG plants, but making sure they're located in the right places," he said.

Area of review
Cardin argued that the proposal would not affect the Federal Energy Regulatory Commission's authorization under EPACT to site onshore LNG terminals. He said his proposal would amend Section 10 of the much-older Rivers and Harbors Act by adding a requirement for the Army Corps of Engineers to secure the approval of an affected state's governor before issuing permits to construct an LNG terminal.

"When we're talking about siting an LNG terminal, those who are the most affected—the state and the nearby communities—should have the most say," said Maryland's other senator, Democrat Barbara Mikulski.

Mikulski and Cardin said local concerns are being ignored as FERC considers a proposal for an LNG terminal at Sparrows Point, near Baltimore. Sheldon Whitehouse (D-RI) said his constituents are worried about the possible impact of a proposed LNG terminal in Fall River, Mass., on Narragansett Bay's recreation and environment.

Bingaman and Domenici maintained that giving a state's governor authority to veto any aspect of the LNG terminal permitting process would create delays as the US begins to compete more aggressively for overseas gas supplies. EPACT's provisions involve states and local communities during the National Environmental Policy Act review, when they can make their concerns known, Bingaman said.

He and Domenici also suggested that while supporting Kohl's NOPEC amendment probably would seem popular with voters back home who are frustrated over higher oil and gasoline prices, the measure simply was an empty gesture that lacks any legal foundation but could create serious problems.

Kohl, who chairs the Judiciary Committee's Antitrust, Competition Policy, and Consumer Rights Subcommittee, disagreed. He said the sovereign immunity doctrine makes an exception for commercial enterprises, and that there has not been any retaliation in other cases where DOJ has prosecuted cases against other foreign cartels.

Contact Nick Snow at nsnow@cox.net.

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