Since the 1970s, the U.S. has had four liquefied natural gas (LNG) import terminals. Rising demand for natural gas in the past few years has resulted in the submission of more than 40 proposals to build new coastal LNG facilities around the country.
With federal regulatory agencies working under a presidential directive and legislation to expedite the approval of energy projects, coastal resource managers have been scrambling to determine potential environmental impacts and what their own role in the siting of these facilities should be.
The fact that since September 11, 2001, LNG tankers and facilities are considered by many to be potential terrorist targets only adds to the issue's complexity and controversy.
"We need enough natural gas to run our power plants, heat our houses, and cook our food," says Seth Kaplan, senior attorney with the Conservation Law Foundation, a New England environmental advocacy organization. "We need to site these facilities in a calm and deliberate manner that is sensitive to the natural environment and the concern about safety."
He adds, "Striking that balance is the job of federal regulators, coastal zone managers, state energy offices–all the different public officials whose job it is to watch out for the public interest."
Issues that LNG proposals may raise for coastal managers include dredging, impacts to wetlands and habitat, conflicting user groups, and ocean management questions.
Federal consistency increases the chances that coastal programs may play a key role in addressing LNG proposals in their states, and many suggest coastal managers can be a communication bridge between local and state officials and federal regulatory programs to help ensure local and state concerns are addressed.
Cooking with Gas
LNG is simply the natural gas that 60 million U.S. households use for heating and cooking that has been chilled to minus 260 degrees Fahrenheit to condense it into a liquid.
Changing the vapor into a liquid dramatically reduces its volume, making it economical to ship from sources around the globe. LNG import terminals turn the liquid back into vapor so that it can be piped into homes, factories, and power plants.
The country's rising demand for natural gas, which is clean-burning and relatively economical, is being met with limited domestic supplies, leading to soaring prices and the growing risk of heating-fuel shortages. Among those calling for more LNG import terminals to meet the country's energy and economic needs is U.S. Federal Reserve Board Chairman Alan Greenspan.
President George W. Bush signed an executive order in 2001 directing federal agencies to expedite their reviews of energy-related projects and to take other actions necessary to "accelerate the completion of such projects, while maintaining safety, public health, and environmental protections."
New England, which uses more LNG than any other part of the country, is particularly at risk. During a record cold snap in January, the region came close to exhausting its gas pipeline supply.
The country's oldest existing LNG import terminal is in Everett, Massachusetts, and the state is looking at proposals for two more LNG terminals–one onshore, one offshore.
Fear Factor
The Everett facility, built in 1971, operated with little notice until September 11, 2001, when safety concerns led the Coast Guard and industry to take new initiatives to secure LNG infrastructure.
Michael Shanahan, spokesperson for the American Petroleum Institute, points out that LNG has been delivered across the oceans for about 45 years without major accidents or safety problems and there has not been a serious accident at a U.S. onshore facility in 25 years.
Nonetheless, industry and academic experts have engaged in a very public disagreement over the potential threats to communities should there be an accident or attack. Government tests, so far, tend to back up industry claims that LNG risks are relatively small.
"What motivates people's concerns about LNG," Kaplan says, "is that the potential impact of an accident could be very, very bad. Our bottom line take on it is that the safety issue is credible enough to play a major role in determining the siting of these facilities."
While safety concerns are the number one issue with LNG proposals, Deerin Babb-Brott, assistant director of the Massachusetts Office of Coastal Zone Management (CZM), says it's not something the state's coastal program can directly address. "We're an environmental agency, but our enforceable policy does require that safety information be presented for others to assess."
Kaplan says that "safety is clearly the mandate of federal agencies, but considering that CZM conformity is a major tool states have in effectively permitting these projects, I think the folks who wield those tools need to include safety as part of what they look at."
One if by Land
The LNG proposal in Massachusetts that is furthest along in the regulatory process is an onshore facility in Fall River, located about 50 miles from Boston.
The proposal calls for turning a former oil-tank farm on the Taunton River into an LNG terminal. The site was one of nine identified a number of years ago by the state's designated ports program as appropriate for marine industrial use.
In July, the Federal Energy Regulatory Commission (FERC) issued its draft environmental impact statement (DEIS), which suggests "approval of the proposed project with appropriate mitigation measures as recommended would have limited adverse environmental impact."
The DEIS also serves as the draft environmental impact report required under the Massachusetts Environmental Policy Act (MEPA), which is the "mechanism by which we develop the necessary information to demonstrate consistency," says Babb-Brott.
The City of Fall River has hired two consultants, who after reviewing the DEIS disagree with its environmental and safety findings.
The city argues that the facility puts the thousands of residents living near the site at risk, would cause significant environmental damage, and does not fit into its current economic development plans. Officials complain that the terminal also would be an eyesore.
Carol Wasserman, director of regulatory strategies for the ESS Group, the city's environmental consulting firm, says the most significant environmental impact from constructing the Fall River facility would come from dredging.
Wasserman says that to remove the necessary 2 to 3 million cubic yards of sediment, dredging operations are proposed to function 7 days a week, 365 days a year, for three years.
The proposal also calls for using all the dredged material on the site, including filling several small salt marshes. She notes the Taunton River has been designated as essential fish habitat for 14 federally managed species and 4 endangered or threatened species.
"The designated ports program still has standards that have to be considered. It does not give license to fill salt marsh or do whatever you want to the environment," notes Wasserman.
In the Fast Lane
In addition to having environmental and safety concerns, Eric Poulin, project manager for the City of Fall River, says the city feels "steamrolled" by the expedited federal permitting process.
FERC, the lead federal agency in charge of onshore LNG projects, is working hard to quickly review proposals and still address all questions and concerns raised during the permitting process, says Mark Robinson, director of FERC's Office of Energy Projects.
"We try to as efficiently as possible make the judgment that is in the public interest," Robinson says. FERC tries to do its environmental impact statements in less than a year, but it solicits comments and recommendations at several points in the review process from federal, state, and local authorities, and members of the public, to get the broadest possible range of information and opinion.
Under the National Environmental Policy Act (NEPA), "every issue that is raised has to be addressed," Robinson says. "It doesn't mean that people always get what they want, but they are guaranteed that their issues will be addressed once, if not twice, formally by the commission."
While FERC and the U.S. Coast Guard are ultimately responsible for siting LNG import facilities, applicants typically anticipate getting at least 100 permits from many federal, state, and local authorities.
Siting of LNG import terminals must be consistent with the coastal zone management programs of the applicable states.
Two if by Sea
Public opposition to onshore LNG facilities has led some to argue that new import terminals should be built in the ocean.
Excelerate Energy, LLC, is building the first offshore LNG terminal in the world 116 miles off the coast of Louisiana. In January 2005, the same company is planning to officially submit a proposal for an offshore terminal 10 miles from the shoreline of Gloucester, Massachusetts.
While the Louisiana project generated little public debate, the Massachusetts proposal has already created controversy.
"I get the feeling that if it's offshore, everyone's a lot more relaxed," says Dale Brown the City of Gloucester 's community development director. "We don't feel more relaxed."
The company combines LNG shipping and regasification on a single oceangoing vessel. A submerged mooring buoy system anchored to the seafloor would allow LNG vessels to dock and connect to an existing pipeline in Massachusetts Bay.
Kathleen Eisbrenner, president of Excelerate Energy, says the offshore terminal will require little offshore development and is minimally intrusive to the environment. Placing the project miles away from neighborhoods and out of high- vessel-traffic areas ensures that risks are kept to a minimum.
The location they have chosen is out of state waters in a small triangle bordered by Stellwagen Bank National Marine Sanctuary, two state sanctuaries, and a dredge disposal site.
It also "happens to be a really good habitat for commercial fishing and is a traditionally heavily fished area," says Brown. "Our single biggest concern is how it's going to impact the fishing industry."
A major environmental concern with some offshore proposals is "open-loop" systems. These systems could impact fish populations by sucking in millions of gallons of relatively warm ocean water to regasify the LNG and then discharging cold water back into the ocean. The Gloucester facility would be a "closed-loop" system, thus avoiding this issue, Eisbrenner says.
Taking Sanctuary
The potential impacts of the proposed facility to Stellwagen Bank are unknown at this point but have raised some questions from the sanctuary's advisory council, says Craig MacDonald, sanctuary superintendent.
One concern is the required security exclusion zone around the LNG facility, which could potentially overlap the sanctuary, keeping out researchers, recreational and commercial fishermen, and commercial whale-watching vessels.
Eisbrenner says the company will include all stakeholders in determining "the right balance of safety, the environment, and business to ensure mutual satisfaction. If we can't come up with that, we won't build it."
Similar but Different
When the Deepwater Port Act was amended in 2002 to include offshore natural gas facilities, the primary responsibility for regulating offshore LNG facilities fell to the Coast Guard. The act establishes a specific time frame of 330 days after the application is deemed complete for the Coast Guard to approve or deny an LNG project.
The Coast Guard must comply with NEPA requirements within that time, notes Mark Prescott, chief of the Coast Guard's Deepwater Ports Standards Division.
Prescott says the Deepwater Port Act has two major provisions that deal with state involvement. "One is that it has to demonstrate consistency with the CZM plan for the state, and two is that the governor of the adjacent coastal state has outright authority to deny a project, or require that it meet certain conditions to make it in compliance with the state's environmental plan."
As a result, cooperation in the permitting process between local, state, and federal authorities is essential. As early in the project as possible, coastal managers should help coordinate efforts to develop information for the public and decision makers on various LNG issues and help coordinate a state's review of LNG terminal applications.
Finding the Energy
Although LNG is not new, it is a new issue on the plates of many of the country's coastalresource managers.
"Natural gas will remain the economic and environmental fuel of choice for this country," says FERC's Robinson. "A number of federal and state agencies all have a strong role to play in ultimately deciding if permitting a project is in the public's best interest."
For more information on LNG proposals in Massachusetts, contact Deerin Babb-Brott at (617) 626-1207, or deerin.babb-brott@state.ma.us. To receive a copy of FERC's DEIS about Fall River, call (202) 502-8371. To review the docket, go to http://elibrary.ferc.gov/idmws/docket_search.asp and type "CP04-36" in Docket Number. To learn more about local environmental concerns, contact Carol Wasserman at (781) 489-1124, or cwasserman@essgroup.com. For general information on the LNG industry, go to www.api.org. To view the Congressional Research Service report, "Liquefied Natural Gas (LNG) Infrastructure Security: Background and Issues for Congress" go to www.energy.ca.gov/lng/documents/CRS_RPT_LNG_INFRA_SECURITY.PDF.
