California Coastal Commission Requiring Carbon Mitigation Plans for Coastal Projects

One of the most contentious and controversial issues in the state is the development of LNG terminals off the California coast. What is the status of the proposals currently being considered?

The commission objected to the BHP LNG terminal off of Oxnard that came before the commission last year for all the reasons set forth in our staff report that is on our web site (www.coastal.ca.gov). I don't know what the status of that project is right now, but it was a unanimous objection. BHP tried to withdraw the project. They didn't have the authority to do that, in our view. As far as I'm concerned, that project is fatally flawed.

Then we have the project in Long Beach Harbor-the city pulled the plug on the review of the EIR and Mitsubishi sued. It's my understanding that that suit is not going favorably for the city. We thought that when the city pulled the plug on it, that that was the end of it, but apparently it's not. That project raises a whole host of very serious problems, just as BHP did, but public safety is a greater concern for the Long Beach Harbor.

Platform Grace has also been proposed by Crystal Energy. That one is proceeding through the regulatory process, but I can't tell you when we'll actually see that before the Coastal Commission-probably next year.

Another project called Woodside, which is 24 miles off of LAX, is proceeding on a fast track, but I'm not sure we're going to see it this year. We have met with the proponents of Crystal Energy and the Woodside folks, and expressed our concerns to them and what they needed to do to address our concerns. In terms of specific timing, we may see one of those in '08, but more likely in '09.

In November, the Coastal Commission gave approval to Poseidon Resources Corporation's plan for a demonstration desalination plant, with 20 conditions. What conditions need to be met for desalination to be acceptable to the commission?

We see desal as part of California's water future. It's not a matter of whether or not we'll have desal as part of the water portfolio of California, it's a question of where, how it's going to be done, who's going to do it, and under what terms and conditions.

The commission extended the approval of the pilot project for Poseidon at Carlsbad several times. But the permit for the actual project, not the pilot, was before the commission several months ago. The staff had recommended denial, but the commission approved it subject, to a variety of conditions. The two most important were that Poseidon had to come up with a plan to mitigate the adverse impacts on marine biological organisms as the result of the entrapment and killing of those organisms in intake of the water for purposes of desalination. That plan has to be prepared, and we've indicated to them that we're shooting to bring the plan back to the commission, assuming that we get all the information and work this through by July.

The second condition-and these are prior to issuance of the permit conditions, so they have to be met before we can issue them the approved permit-relates to the carbon footprint of the project. They argued that they were going to be carbon neutral; we felt very strongly that the greenhouse gas emissions of this project still needed to be addressed. A big topic of dispute before the commission was which conditions relative to greenhouse gas emissions were going to be used: the staff's recommended conditions (because we said, we're recommending denial, but if you're going to approve it, here are conditions that we would suggest that you attach) or Poseidon's suggested conditions. The commission adopted the staff condition.

Again, a plan that addresses the greenhouse gas emissions of the project must come back to the commission for approval before the permit can be issued. That plan, first of all, must address reduction of greenhouse gas impacts, which would be, for example, using renewable energy to the extent you can, and then, to the extent that you can't, requiring offsets or mitigations.

That Carlsbad project has been the subject of lawsuits by the Surfrider Foundation and the PCL. With this suit as an example, how difficult is it to get anything done on the coast?

These kinds of projects are very complex and have very significant impacts that raise a lot of issues for people who are concerned about the environment. Growth-inducing impacts from the new desalination project, for example, is one of the big concerns here. A primary reason for this plant is to accommodate new growth in the interior of San Diego County and Southern California. This would provide water for growth in the Inland Empire because the desal water will be used to provide water to these water districts on the coast, which will free up Metropolitan Water District water, which can then go to new inland communities that are being proposed but that don't now have water supplies. That's not our issue, but clearly, it's one of the main concerns that the environmental community had about the consequences of a project like this.

But clearly, the coast of California is a special place that a lot of people have a lot of interest in, so any time you propose development along the coast, especially with major projects like LNG projects, like new highways (i.e., the toll road), desalination, or new alternative energy projects like wave and wind energy, all of those are going to raise significant issues that people are going to vigorously debate.

We've got a case like that in Oxnard, where a peaker plant was proposed by Southern California Edison to handle peak use. It was denied by the city of Oxnard and it's been appealed to the Coastal Commission. (Denied energy projects can be appealed. Usually, it's only approvals that can be appealed, but in this case, the denial of an energy project can be appealed.)

We don't see major Coastal Act issues relative to that project. We're in the process of evaluating it and analyzing it, but, clearly, the people who live near the facility have concerns. The difference on the coast is that you've got the Coastal Act to apply, which you don't have in inland areas. That makes it much more complex and much more challenging, to develop any major project along the coast. That comes with the territory, because the public says that the coast, like San Francisco Bay and Lake Tahoe, is a special place that deserves special protection.

California is clearly in the lead in infrastructure investment and policy to reduce the carbon footprint from our economy. What is the appropriate role of the Coastal Commission in this statewide effort to accomplish these green objectives?

We're totally supportive of the initiatives of the governor and the state on greenhouse gas reductions. We're part of a task force within the resources agency that's addressing this issue. Our need is to get expertise and input from the agencies that are primarily responsible for working up a strategy for dealing with greenhouse gases in California. However, our dilemma is that we can't wait for CARB to come up with their guidance and their regulations because we are getting big projects before us now that we determined, several years ago, we were going to look at for their carbon emissions because of their significant impact on coastal resources, whether it's sea level rise, marine biological productivity, or impact on agriculture.

The variety of impacts from global warming on coastal resources was documented in our staff report on the BHP LNG terminal project. That was one reason why we recommended an objection to that and why the commission objected to it, because they did not address the greenhouse gas emissions. Greenhouse gases were clearly a major part of the commission's action on the Poseidon desalination facility and the toll road last month as well. We have raised and applied greenhouse gas impacts in our evaluations and recommendations on these three major projects.

One of the areas that we're pushing hardest in is the reduction of greenhouse gas emissions up-front, not focusing just on adaptation and offsets but reduction-how can you reduce the amount of greenhouse gases that your project is emitting in the first place? We are finding several agencies currently not addressing that issue. They are just dealing with adaptation and compensation or offsets.

We have not attempted to address this question relative to single-family homes or smaller projects. But we have told Caltrans, for example, that new projects (not projects already in the pipeline) are going to have to address greenhouse gas emissions and issues such as sea level rise. And we've told developers who are proposing major new development that they're going to have to address greenhouse gas emissions of large new development projects.

By and large, we have seen cooperation on this issue and an attitude of "lets figure out how to make it work." For example, for Woodside, the LNG project off of LAX, they have been very forthcoming and said, "Look, we understand we've got to address greenhouse gas emissions. Tell us what we should do."

What are the biggest regulatory challenges for the Coastal Commission going forward?

Our problem is that, with the budget crisis and the huge staffing cuts for the Coastal Commission proposed in the Governor's budget, we're not going to be able to meet the workload demands that we have, which are huge. Right now, we're down to one staff analyst on the North Central coast, which includes four counties: Sonoma, Marin, San Francisco, and San Mateo. That's just not workable.

I'm at a loss to be able to project how we're going to be able to meet the legitimate expectations of permit applicants to get their projects processed in a timely way. We're trying to find creative ways of doing that. We're going to spend more effort asking parties who have business before the commission to provide funds for staff support that we wouldn't otherwise have. We've done that on a few occasions, but we're going to have to do it a lot more, or else there will be even more inordinate delays in processing some of these major projects. To me, that's the biggest challenge that we're looking at right now: how we can do the public's business and carry out what the Coastal Act mandates with drastically reduced staffing levels proposed by the Governor.

Local governments are legitimately frustrated that we are not able to process their proposed amendments to their coastal plans because of lack of staff. It's not just delays in processing them; it's an inability to work with the local government up-front, early on, at the planning commission level, and at the local levels where you have workshops and where we should weigh in. We just don't have the staff resources to raise issues that we see under the Coastal Act in a timely manner. We should be there. We should be working with them. We're as frustrated as they are, but we're not able to. And then, when it comes to the Commission and we have to analyze what's before us because of the statutory time limits, we raise issues for the first time and the local government says, "My God, where were you when we were putting this together in the first place?" So there are major challenges on our plate and in our future, and they revolve primarily around the question of adequacy of funding.