Environmental Protection

Agencies Release Pier 400 Environmental Documents

The Port of Los Angeles (POLA) and the U.S. Army Corps of Engineers recently released the Draft Environmental Impact Report and the Draft Environmental Impact Statement for Plains All American Pipeline's proposed Pier 400, Berth 408 petroleum terminal project.

"We believe that the Pier 400 project meets the letter and spirit of the POLA/Port of Long Beach landmark Clean Air Action Plan and is designed to be one of the most environmentally responsible projects of its kind in the world," said David Wright, company vice president and project manager for Pier 400.

The project, which will be designed and constructed by the company's subsidiary, Pacific L.A. Marine Terminal LLC, involves the construction of a new deep-water bulk petroleum import terminal at Pier 400 and Terminal Island in the POLA to handle marine receipts of crude oil and refinery feedstocks. As currently contemplated, the facility would have an initial throughput capacity of 350,000 barrels per day and is intended to accommodate the growth of crude oil import demand for the foreseeable future. The facility will also include 4 million barrels of storage capacity along with high-capacity transfer pipelines and other infrastructure to distribute the crude oil imports to area refineries. The current cost estimate for the company's portion of the project, which includes the "land-side" facilities, is approximately $468 million.

A deep-water petroleum import facility such as Pier 400 is already included in the POLA master plan and the harbor was previously dredged to accommodate deep-draft oil tankers. The POLA will also be making an investment in certain "water-side" improvements, such as a jetty, wharf, alternative marine power facilities, and other related items.

According to a mid-2007 study prepared by Baker and O'Brien Inc., the consumption of crude oil by California refineries is projected to increase from approximately 1.9 million barrels per day in 2007 to 2.3 million barrels per day in 2021. Due to declining California production, during this same time period, California's reliance on waterborne deliveries of crude oil is projected to increase by over 700,000 barrels per day, including an increase of over 460,000 barrels per day in Southern California.

According to a March 2008 report by the Los Angeles County Economic Development Corporation, the capacity provided by the Pier 400 project is critical to meeting Southern California's need for increased waterborne foreign imports.

The Pier 400 project will be one of the first projects designed to meet the goals and objectives of the POLA/POLB Clean Air Action Plan, which identified items necessary to improve overall air quality in the harbor area. Among the emissions-reducing measures being incorporated into the Pier 400 project are:

• Phased-in usage by vessels of low-sulfur fuels and alternative marine power (also referred to as "cold ironing");

• Slow steaming within 40 nautical miles of the port;

• Storage tanks equipped with the best available control technology;

• Electric-powered shore-side pumps to minimize the use of vessel pumps and reduce fuel usage and emissions;

• High-capacity pumps and large-diameter pipelines, which enable maximum offloading rates and minimize the time vessels remain in port;

• The ability to accommodate much larger vessels resulting in a more efficient facility, which will require fewer vessels to receive the same volume of crude oil; and

• The dock and shoreside facilities will comply with South Coast Air Quality Management District New Source Review permitting standards that require the facility to offset 120 percent of operational related emissions through the purchase of Emission Reduction Credits and to operate subject to emissions caps.

In addition to these and other emissions-related measures, the facility is designed to comply with stringent regulatory requirements for engineering and construction, safety, and security.

Several additional approvals must be obtained before construction of the project can commence. The public comment period related to the newly released documents will extend for at least 60 days after which a final review will be developed by the respective state and federal agencies. After the final review is approved by the POLA Board of Harbor Commissioners and the Corps of Engineers, Los Angeles City Council must give its approval.

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