(Originally published Feb. 21, 2006 by the Pacific Coast Business Times. Re-published here with permission.)
The public relations battle over a liquefied natural gas facility in California has crossed two oceans.
Australian mining giant BHP Billiton was the seventh highest spender on lobbying in California during the same period that the company moved forward with its plan to build a liquefied natural gas facility off the coast of Oxnard, a project that would require public approval. Three other entities among the top 10 in 2005 also tried to influence LNG policies.
Filings with the California Fair Political Practices Commission show that BHP spent about $1.8 million on lobbying efforts in 2005. The company also contributed to an organization, the California Foundation on the Environment and the Economy, that paid to bring policymakers on a 12-day trip to Europe. BHP also sponsored a lunch and dinner for participants during the fact-finding trip to explore alternative and renewable energy projects on that continent.
CFEE’s board of directors consists of industry executives, including BHP LNG International President Renee Klimczak and a select group of environmentalists.
Kathi Hann, public affairs consultant for BHP Billiton LNG International, said Klimczak paid for 19 dinners overall, and that the company reported the meals as gifts to each politician as required by law.
“CFEE has been conducting these study tours for many years to help educate members of the legislature with industry practices and complex issues which may require policy decisions,” Hann said.
According to the reports, BHP lobbied the legislature on Senate Bills 426 and 1003 and Assembly Bill 993 in the second of third quarters of the year. In the second quarter, it also lobbied the State Lands Commission, the California Coastal Commission, the Public Utilities Commission, California Energy Commission, the Air Resources Board and Governor Arnold Schwarzenegger’s office.
Senate Bill 426 would require the governor to disapprove any LNG project unless it is evaluated by the energy commission for its ability to meet energy needs and mitigate environmental impacts. As of Jan. 12 the bill had gone back to the Assembly and was held at the desk. It has made more progress than the other, similar bills.
BHP, the largest mining company in the world, is continuing with its effort to get federal approval.
A revised environmental impact report on the LNG project off the coast of Ventura County is set to be released in March. After the report is issued, the U.S. Coast Guard will make a decision on whether or not to authorize the project. Other companies that have proposed LNG projects also lobbied the state government in 2005.
ConocoPhillips spent just over $423,000. That money was spent on the same bills as well as other matters related to the company’s other, non-LNG-related operations. Crystal Energy spent a little more than $48,000 during the same period. Both firms have also proposed LNG projects in California.
ConocoPhillips is working on a land-based importation facility in Long Beach. It has submitted an application to the Federal Energy Regulatory Commission, the authoritative body for land-based projects. The application is the only other complete permit application for an LNG project in California.
Crystal Energy’s plans for an LNG platform off the Santa Barbara Coast have not solidified beyond the conceptual phase. It has not submitted a permit application.
The Western States Petroleum Association, Edison International and subsidiaries, and the California Chamber of Commerce also lobbied officials on LNG issues. They were the second, fourth, and sixth highest spending lobbyist employers in 2005, respectively. These companies also hired lobbying firms to further persuade legislators and other public servants.
Timmerman and Co., one of the lobbying firms employed by Edison, also received $21,005.58 from Long Beach-based SES Terminal to lobby the legislature on the same bills in the second quarter.
SES Terminal is the Mitsubishi-owned limited liability corporation formed to build the Long Beach terminal with ConocoPhillips. Thomas Giles, the company’s chief operating officer and executive vice president, also serves on the CFEE board of directors.
The filings also show that BHP spent at least $1187.50 on a dinner in Belgium and $264 on a lunch in Ireland. California assembly members, senators, and members of the public utility and energy commissions participated in the dinners.
The meals took place during a Sept. 22, 2005 to Oct. 4, 2005 trip to northern Europe sponsored by CFEE. Costs for the trip itself and travel for participants were paid for by the foundation.
CFEE’s funds come from dues paid by its board of directors, which includes Klimczak. It also includes Crystal Energy President Paul Soanes. Soanes did not participate in the trip to Europe.
It has sponsored trips similar to the 2005 renewable energy trip for the past 27 years. Themes for the trips vary each year. The group also organizes a number of conferences each year that bring together policy makers and entities concerned with the organization’s priorities, which include air quality, energy, water, public infrastructure and telecommunications.
“We’re characterized by having a balanced, fair approach to these questions,” CFEE President Patrick Mason said. “We try to get the major proponents of competing ideas. We try to pick people that are the chairs of committees. We pick both parties. In an era of term-limits, it’s really important to pick people that are actually policy people.”
During the group toured a major LNG terminal, visited a wind turbine manufacturer, met with members of the German, Danish and Irish governments, and examined energy transmission systems.
Public Utility Commissioner Dian Grueneich was the only participant to reimburse BHP for the meals.
Mason said such meals are standard practice on this sort of trip. His organization only paid for travel and lodging, which generally included breakfasts. It was typical for individual members to pay for different portions of the trip.
Assemblyman Sam Blakeslee (R-San Luis Obispo) was the only legislator from the Tri-Counties to attend. State Senator George C. Runner, Jr. (R-Lancaster) represents a district covering the rural northern half of Ventura County, including the towns of Santa Paula, Fillmore and Piru.
Twenty-two people went on the trip, including BHP’s Klimczak and Sunne Wright McPeak, secretary of the state’s business, transportation and housing agency.
