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Woodside Natural Gas OceanWay Secure Energy Project, CA

STATUS:  Killed

TYPE: Natural Gas

OPPOSITION:  U.S. Rep. Jane Harman; Sierra Club; Center for Biological Diversity;  Ratepayers for Affordable Clean Energy (RACE); Santa Monica Baykeeper; City of Malibu; City of Santa Monica


BACKGROUND:  In August 2006, Woodside Natural Gas submitted an application to develop an offshore natural gas delivery facility, the OceanWay Secure Energy Project.  OceanWay, as designed, would not require an onshore LNG terminal or offshore platform; instead, Australian LNG would be converted to regular natural gas on specially-designed ships as was transported to U.S. waters, where it would be securely connected to an undersea pipeline and then connected to the Southern California Gas Company system.  The proposal would process an annual average of 0.4 billion cubic feet per day (bcf/d) of natural gas, with subsequent future phases of the project increasing capacity to 0.8 and 1.2 bcf/d, subject to market demand.  Woodside did not provide construction cost estimates for the project.

OceanWay is a particularly tragic case: Woodside sought to jump through every single hoop placed before it in order to pacify environmental groups and local residents, yet still saw its project fail.  The project was designed to “minimize environmental disturbance, maximize the distance from residential areas, and ensure the site is a sufficient distance from shipping lanes and marine preserves,” according to a Woodside press release.

Yet environmental groups almost immediately sought to kill the OceanWay project.  They seemed to come up with every possible reason to oppose the project—at times bordering on the absurd—arguing that:  the project was economically hazardous for residents; California doesn’t need an LNG import terminal; OceanWay increases the risk of a terror attack; LNG is not a clean fuel; it will increase dependence on foreign energy (Australia!); OceanWay threatens marine life; it raises the risk of damage from earthquakes; it is not sensitive to environmental justice concerns; it would create a noise problem; and OceanWay undermines renewable energy development.

Woodside submitted applications to the Coast Guard for a Deepwater Port license and to the City of Los Angeles for a pipeline franchise permit.  It began the National Environmental Policy Act review process with the Coast Guard as lead agency, and California Environmental Quality Act review process with the City of Los Angeles as lead agency.  Opponents challenged each of these applications.  In late 2007, the Coast Guard put a hold on the OceanWay application pending the collection of additional information, including climate change impacts of LNG.

In the end, OceanWay’s opponents prevailed.  On January 15, 2009, Woodside officially pulled the plug on the project.  Woodside cited “changed market conditions,” but environmental groups immediately issued press releases congratulating themselves for killing the OceanWay project.

SOURCES:  Woodside Natural Gas (http://www.woodside.com.au/NR/rdonlyres/B4D149F8-D357-4731-B88D-BA69DD039E8E/0/WoodsideSuspendsOceanwayDevelopment.pdf;
Malibu Surfside News (http://malibusurfsidenews.com/blog/2009/01/woodside-scraps-plans-for-oceanway-lng.html; http://www.malibusurfsidenews.com/blog/2007/11/feds-stop-clock-on-woodsides-oceanway.html);
Rigzone (http://www.rigzone.com/news/article.asp?a_id=48351;
RACE (http://www.lngpollutes.org/article.php?id=525;
California Energy Commission (http://www.energy.ca.gov/lng/documents/ocean_way/2007-09-05_OCEANWAY_DEEMED_COMPLETE.PDF)     

Last Updated:  November 18, 2010