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March 25, 2004


Why Calpine left


Now that the San Jose energy giant Calpine has packed up its bags and left town, the prevailing mood in some quarters is, if not anger, at least frustration. Why couldn't the project at least have been studied? Why are so many people in this community opposed to any kind of industrial development of Humboldt Bay? Why, to put it more directly, did naysayers win the day?

The answer, just like the answer to why wasn't Paul Gallegos driven from office, is simple: Because it was a bad idea.

How was it a bad idea? Let's look at just a couple of reasons.

First and foremost, liquefied natural gas is off the charts as a fire hazard, and for one reason: It's super-concentrated. Chilling it to 270 degrees below zero so that it condenses into a liquid makes perfect economic sense: Because gas in its liquid form shrinks in volume by a factor of 600, overseas transport is affordable. But placing such enormous amounts of natural gas in one place also makes it extremely dangerous.

Aside from a disastrous fire in Cleveland in 1944, and possibly an explosion earlier this year at an Algerian site, the LNG industry has had a pretty impressive safety record. So you could argue that those who fret about the safety of LNG are like so many chicken littles. But the consequences of an ignition of a large volume of LNG in a populated area are so appalling that the risk really can't be dismissed. That's why up until the late 1980s, the state of California had a law on the books banning the placement of LNG facilities closer than 4 miles to populated areas. Needless to say, the LNG import terminal Calpine had in mind for the Samoa Peninsula would have been well inside that zone.

A second factor is that the Calpine project would have dominated the bay. Two 900-foot tankers, each with a Coast Guard security escort, would have entered the bay every week. Roads would likely have been closed on the peninsula, and perhaps in the Eureka area, during transport, to prevent a terrorist from launching, say, rocket-propelled grenades at the ships. Other users of the bay, particularly commercial fishermen, would have suffered -- which explains why they eventually came out against the project.

We could cite other reasons. Frequent dredging would have been required to ensure that the tankers wouldn't run aground. And while the project did promise to generate substantial property tax revenue, the 60 to 100 full-time jobs that were promised didn't seem all that impressive -- especially when you consider the potential negative effect to other businesses.

So in our view there were plenty of reasons to pull the plug on the project at this point. Why study a project that is clearly unsuitable for a small, populated harbor such as Humboldt Bay?

Which brings us to why Calpine really left. Sure, they were no doubt taken aback by the overwhelming opposition to the project voiced at last week's meeting of the Eureka City Council. But what really bothered them, we suspect, was the prospect that they were going to lose control over the project.

If the council had postponed a vote on entering into an exclusive right to negotiate with Calpine on basing the terminal at the Eureka Municipal Airport, then the independent health and safety study that the County Board of Supervisors was pursuing would have taken precedence. Calpine, in that event, would not have been able to ignore whatever data the study generated as it went about seeking the various state and federal permits it would have needed to do the project. It was because the company wanted to make the study moot that it insisted the agreement with the city had to come first.

So to you folks who want to see more industrial development on Humboldt Bay, we say go for it -- but next time let's be sure it's not a bullet we're all going to have to dodge.





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