11/27/06 - NORTHERNSTAR HIRES ERNIE VILLEGAS

Ernie Villegas may be out of power, but he's not out of gas.

Villegas, the outgoing mayor of Fillmore, retired from 29 years at Southern California Edison only to be hired Nov. 10 by NorthernStar Natural Gas. He will help the Houston-based energy firm promote its proposed Clearwater Port project, which would turn an offshore oil platform in the Santa Barbara channel into a liquefied natural gas importation facility. Villegas will work with Jeff Gorell, Clearwater Port's director of government and community affairs.

Villegas, the outgoing mayor of Fillmore, retired from 29 years at Southern California Edison only to be hired Nov. 10 by NorthernStar Natural Gas. He will help the Houston-based energy firm promote its proposed Clearwater Port project, which would turn an offshore oil platform in the Santa Barbara channel into a liquefied natural gas importation facility. Villegas will work with Jeff Gorell, Clearwater Port's director of government and community affairs.

On Dec. 12 Villegas will hand over the gavel after four years on Fillmore's city council, the last two as mayor. He has already stepped down from the Ventura County Air Pollution Control Board, where he represented Fillmore.

Taking an opportunity offered by Edison to retire at 55, Villegas is also launching a new consulting business—the Paladin Principal Group—with Carpinteria Chamber of Commerce President and Chief Executive Office Lin Graf and Fred Trueblood, another retired Edison executive and an assistant to California assemblyman Keith Richman.

But Villegas' service to Clearwater Port will be an independent endeavor. He said his experience at Edison taught him the importance of LNG as an energy source for California—a number of other LNG facilities have been proposed in the state in recent years, including another project off the Ventura County coast proposed by Australian mining company BHP Billiton known as Cabrillo Port.

"In California, natural gas is probably the largest piece of the puzzle that we're able to utilize here," Villegas said.

According to a Sept. 21 presentation in Valencia by the California Energy Commission, the state's average daily natural gas demand is six billion cubic feet. That figure increases to 10 million in the winter. Currently, 87 percent of California's natural gas is imported from outside the state. If approved, Clearwater Port would be able to handle 1.4 billion cubic feet per day.

"For me the process of trying to secure additional natural gas is vital," he said. "I think it's something that we need to implement now. The reason is that it is going to take two to three years to actually have this done."

Even though a final decision may be near for BHP Billiton's Cabrillo Port, Villegas said that he is enthusiastic about promoting Clearwater because he views its design as a "much, much better fit for California."

If approved, Clearwater Port would actually be a conversion of Carpinteria-based Venoco's Platform Grace to an LNG importation facility. Once operational, Clearwater would pay more than $12 million a year to Venoco, on top of fees paid during construction. Villegas said Clearwater's strengths include the absence of an LNG storage facility on board the platform and the ability to adapt an existing structure for a new use.

"It's something that is sort of a win for everyone," Villegas said. "It deals with environmental issues by utilizing the corridors that are already there. And you don't have to have LNG storage [on the platform]."

The port was originally proposed by Crystal Energy, then abandoned when partner Woodside pulled out of the project to propose its own facility in the Los Angeles area. The project received new life in March when, through its Clearwater Port LLC, NorthernStar Natural Gas took over Crystal's lease with Venoco.

A new deepwater port license application was filed July 13 with the U.S. Coast Guard and the California State Lands Commission. However, on Aug. 22 the Coast Guard sent a letter to Clearwater stating that the application was incomplete. A renewed application has not yet been filed.

Much controversy has erupted around BHP's proposal, and Villegas will spend much of his time conducting outreach throughout Ventura County to try to differentiate Clearwater's LNG proposal.

Susan Jordan, the director of the California Coastal Protection Network—a major opponent of BHP Billiton's proposal—said that she would not take a position on Villegas' hiring or any other aspect of the Clearwater proposal until a completed application is submitted.

"I will say this: there is a very strong contingent in Santa Barbara and Ventura and perhaps beyond which has been looking forward to the day that oil rigs can be removed from the coastline," she said.

A board member of the Economic Development Collaborative and the Ventura Council of Government, Villegas has also served in leadership roles at the Channel League of California Cities and on the boards at a variety of community organizations. In a press release announcing Villegas' hiring, NorthernStar President Paul Soanes said he was selected because of his knowledge of the energy industry and his connections throughout Ventura County.

Villegas and his partners will also use their experiences to drive the growth of the new Paladin Principle Group. The new company will help companies and nonprofit organizations get their message out to the public. The company's first client is the Haggy Foundation, a nonprofit based in Fillmore that provides grants and other funding to local youth around that city.

"The benefit of our company is that we have a diverse set of skills," Villegas said.

NorthernStar also announced Nov. 21 that it hired Joe Desmond to serve as senior vice president for external affairs. Desmond served as chairman of the California Energy Commission from 2004 to 2006. He will provide consulting to NorthernStar for both Clearwater Port and another proposed LNG facility in Oregon.