Energy Current: FERC doesn;t have last word on LNG terminal safety

[Hans Laetz, Newsgroup Editor]

[Editor's note: This article is from the Energy Current news site.
While it discusses FERC, the Federal Energy Regulatory Commission, it
does not address the two offshore LNG projects off California that are
under the jurisdiction of the U.S. Commerce Department's Maritime
Administration. The same points apply, however.

[The only California LNG terminal proposal under FERC jurisdiction is
the all-but-officiallly-declared-brain-dead SES project in Long Beach,
which is considered finished and rejected by Long Beach, the
California courts, FERC and everyone else except the good people at
MitsubishiConocoPhillips, who may file an appeal.]

By Energy Central staff / Houston TX

While the Federal Energy Regulatory Commission (FERC) says the Energy
Policy Act of 2005 gives it supreme authority over safety issues
surrounding liquefied natural gas (LNG) terminals, U.S. states
actually do have the legal authority through the National
Environmental Protection Act (NEPA) to prevent unsafe LNG terminal
siting, according to the LNG Terminal Siting Standards Organization
(LNGTSS).

In a recently published white paper, LNGTSS notes that shoreside LNG
terminal projects require permitting from several sources, including
FERC, state agencies, Army Corps of Engineers and, though not
technically a permit, the U.S. Coast Guard. States' permitting
authority is for air and water quality, as provided by NEPA, as well
as coastal zone management.

The air and water quality permitting are the trump cards that states
hold over terminal siting.

"FERC wants the public to believe that they are the ultimate
determiner of what new LNG facilities will be built. The truth is that
they are one of only many determiners," said Robert Godfrey, an LNGTSS
representative.

"While FERC may issue permits to construct LNG terminals, the fact is
that those terminals cannot be built without additional permits from
the state and from the Army Corps of Engineers."

Additionally, the Coast Guard must issue a letter of recommendation
regarding suitability of the waterway.

NEPA requires states to consider two issues that are of particular
importance, but are being overlooked, according to LNGTSS: need and
human environment.

LNGTSS notes in the paper that the U.S. already has 30 existing,
permitted, under construction or expanding LNG import terminals and
peak shaving facilities, far more than are needed, according to FERC
officials and LNG industry experts. Former FERC Chairman Pat Wood said
in 2005 that only seven to nine new LNG import terminals are needed,
along with the expansion of existing terminals and peak shaving
facilities.

"Since the need to further impact the environment no longer exists,
states can deny new permits on that basis, alone," LNGTSS states.

LNGTSS also notes that FERC ignores the world LNG industry standards
on safety as published by the de facto world authority on LNG terminal
siting, the Society of International Gas Terminal and Tanker
Operations (SIGTTO), thus doing an inadequate job of protecting the
human environment.

"Since FERC ignores need in its permitting, and fails to adequately
protect human environment, states can use the authority provided by
NEPA to establish a permitting threshold. If LNG terminal applicants
cannot satisfy SIGTTO LNG terminal siting standards, and prove need,
then there is an a priori failure to meet NEPA requirements. States
can refuse to allow the applicant to enter the permitting process, or
can issue a summary decision against the project."

LNGTSS concludes that, prior to subjecting citizens, communities,
states and the federal government to effort and great expense on
projects that may be superfluous or even harmful, FERC should be
required by Congress to recognize and respect these same issues. "It's
time for the public to demand that their federal delegates require
FERC to act responsibly regarding need and safety, and to adopt SIGTTO
LNG terminal siting standards."

In recent years, communities, environmentalists and government
officials have been voicing opposition to proposed LNG projects such
as the Broadwater Energy LNG project, which has sparked controversy
from environmentalists and state officials in New York and
Connecticut. Conn. Attorney General Richard Blumenthal has vowed to
fight FERC's approval of the Broadwater floating terminal LNG project
last week. The terminal will be sited in Long Island Sound.

While the project has FERC's approval subject to operator Broadwater
Energy LLC adopting over 80 mitigation measures to enhance safety and
security and ensure the project has limited environmental impacts,
Broadwater Energy LLC also must file with the New York Department of
State the determination of the project's consistency with the New York
Coastal Zone Managemnet Plan under the applicable provisions of the
Coastal Zone Management Act.

Additionally, Broadwater Energy must develop an emergency response
plan and coordinate procedures with the Coast Guard, state, county,
and local emergency planning groups, fire departments, state and local
law enforcement and appropriate federal agencies.

Blumenthal has called upon New York Gov. David Paterson, who recently
took office following the resignation of New York Gov. Eliot Spitzer,
"to drive a stake through this montser's heart."

"FERC never met an energy project it didn't like. FERC didn't even
wait for New York's decision, and the oil company sponsors are already
hawking the LNG to potential customers," Blumenthal said.

LNGTSS is an advocacy group based in Maine that promotes the position
that governments should require the existing SIGTTO LNG terminal
siting standards be held as the minimum threshold for local, state/
province, and federal application consideration.

SIGTTO is a London-based international body established for the
exchange of technical information and experience, between members of
the industry, to enhance the safety and operational reliability of gas
tankers and terminals. The Society publishes studies and produces
information papers and works of reference for the guidance of industry
members. It maintains working relationships with other industry
bodies, governmental and intergovernmental agencies, including IMO, to
better promote the safety and integrity of gas transportation and
storage schemes.