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Public awareness and concerns about LNG

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Like many other types of energy and energy systems, the natural gas concerns and the use of LNG as a mode of transportation from distant sources have become the subject of public attention and controversy in recent years.

Thus, the range and diversity of views held by the people who will be affected by the use of LNG are important to Congress in its consideration of possible new legislation, oversight activities, and budget appropriations to Federal agencies involved in the regulation of LNG projects and facilities.

In order to provide Congress with information on these views, OTA conducted a public participation program in connection with this assessment of the transportation of Environmental Impact of Liquefied Natural Gas liquefied natural gas. The program consisted of a daylong workshop in Washington, D. C., a questionnaire/interview survey in relevant coastal areas, and a review of this draft report by members of the public.

These activities were designed to obtain information about the opinions and beliefs of the public in four areas:

  • the benefits and risks which various groups associated with the development of an LNG system or alternatives to that development;
  • concerns about marine transportation of liquefied natural gas and the siting of LNG facilities;
  • the adequacy of the decisionmaking and regulatory processes relating to LNG;
  • the need for Government action in the form of legislation, policymaking, or research.

More than 100 persons from gas utilities and related industries and financial institutions, organized labor, State and local agencies, and public interest groups were directly involved in the public participation program. Through them, OTA was able to identify the key issues which have been or will be raised in the public debate and which should be analyzed for possible Federal action. Through them, OTA was also able to appreciate the wide range of views on these issues and incorporate those views into its report to Congress.

Much of the discussion of LNG during the public participation program centered on specific LNG projects and the concerns which various interest groups have had about those projects. Public involvement with LNG projects has been limited to date, but has included participation in formal hearings before the FPC, legal action, and dissemination of information about the issues involved.

Although individual opinions on issues varied, it was obvious from the public participation program that there are three major issues in the consideration of LNG systems:

  • safety of LNG ships and terminals;
  • criteria for siting of LNG facilities;
  • public participation in decisionmaking processes.

The varied views of the public who worked with OTA in this effort are particularly reflected in the section, «Critical Review of Components of the LNG System». Their specific suggestions for action to help resolve major problems are itemized in the next section of this chapter. However, the public also expressed strong interest in several broader issues which are beyond the scope of this report. These broader questions which have not been answered to the satisfaction of many include:

  • Is there a need for LNG in the first place?
  • Will the development of LNG systems divert major amounts of capital and human resources away from the development of alternative types of energy?
  • Will the development of LNG systems produce unwarranted confidence in traditional energy supplies and prevent a major commitment to energy conservation?

On the other end of that concern, many asked about the impact of not developing LNG systems. They argued that not proceeding could result in «an unprecedented economic disaster» by creating shortages of energy in critical industries, decreasing possible contributions to the gross national product, and increasing unemployment.

Actions desired by gas utility companies

Gas company respondents included representatives of the:

  • American Gas Association;
  • Algonquin Gas of Massachusetts;
  • Columbia LNG Corp.;
  • Southern California Gas;
  • Central Power and Light Company in Texas;
  • United Gas Pipeline Company of Texas.

The respondents suggested the following:

  • The Federal Government should streamline the regulatory process by declaring policies on LNG pricing, LNG facility siting, and other important aspects of LNG development.
  • One Federal agency should coordinate all LNG procedures in order to accelerate the regulatory process and eliminate jurisdictional overlaps among the Federal Power Commission, the Office of Pipeline Safety Operations, and the US Coast Guard.
  • There should be Federal preemption on environmental and siting issues.
  • Ceilings on LNG imports should be avoided, but the security of supply and the possibility of overdependence on a single source should be addressed on a project-by-project basis.
  • The State and local approval processes should be consolidated where feasible.
  • The Federal Government should establish clear safety criteria on a generic, rather than case-by-case, basis.
  • The Federal Power Commission should approve a formula to allow companies to pass on escalations in the cost of foreign gas or transportation without new hearings.
  • The Federal Power Commission should allow rolled-in pricing.
  • The Federal Government should maintain existing financial incentives now available through the Maritime Administration and the Export-Import Bank.
  • Congress should adopt legislation providing for adequate insurance coverage by means of a fund supported by LNG sales.
  • The Federal Government should undertake additional studies of LNG safety, especially vapor cloud studies and risk analysis, with large-scale LNG spill tests to be carried out by the Coast Guard and the Energy Research and Development Agency.

Actions desired by organized labor groups

Respondents from organized labor groups included representatives of the AFL-CIO and other groups.

The respondents suggested the following:

  • Congress should adopt legislation to correct deficiencies in the LNG regulatory process and eliminate counterproductive time lapses and delays.
  • Ratesetting policies should not discourage the utilization of imported LNG.
  • Congress should adopt legislation to mandate the use of US flag ships with US personnel for LNG transportation in order to increase national security and ensure full compliance with construction and safety standards.
  • There should be a prompt decision on the gas transportation system to be used for North Slope Alaskan gas, including provision for a western delivery system.
  • Federal preemption should be used if necessary to arrive at early decisions on LNG issues, but there should also be maximum State, regional, and local involvement in decisions.
  • All Coast Guard procedures should be reviewed to determine the adequacy of ship traffic control and inspection of LNG tankers.
  • The Federal Government should require agencies involved in LNG approval processes to act on permit applications within a given time frame.
  • Additional studies should be undertaken to determine the capability of Coast Guard units assigned to aid LNG tankers and to assess the adequacy of equipment in use.
  • Studies should also be undertaken to determine what industries are compatible and could be located near LNG terminals.

Actions desired by state and local officials

Respondents from State and local offices included representatives of the Public Utilities Commission staffs in New Jersey, California, Rhode Island, and Massachusetts; representatives of the cities of Providence, R. I., Oxnard and Los Angeles, Calif.; and representatives of the New York Department of Environmental Conservation, and the Georgia Coastal Zone Management Office.

The respondents suggested the following:

  • The Federal Government, with the involvement of local interest groups and governments, should establish procedures for the selection of suitable locations for future LNG facilities.
  • The Federal Government should, where practical, eliminate overlapping jurisdiction with respect to siting, construction and monitoring of LNG facilities.
  • The Federal Government should expedite and consolidate the various permit processes required for approval of an LNG facility.
  • The Federal Government should proconsermulgate and enforce safety regulations and establish standards for transportation and storage of LNG.
  • Congress should adopt legislation which will ensure that the costs of shipping LNG by oceangoing vessels are just and reasonable.
  • Additional studies should be made of LNG spills on water, underground storage of LNG, and greater use of imported LNG as pipeline gas.
  • The Federal Government should also promote research into alternative fuels which might be more abundant and possibly less costly; research into conservation methods; and studies of the possibility of curtailing the sales activities of gas distributors.

Actions desired by related industries

Respondents from businesses and industries related to the LNG industry included representatives of shipbuilding companies and associations, gas pipeline companies, safety consulting firms, marine engineering firms, the industrial construction industry and financial institutions.

The respondents suggested the following:

  • The Federal Government should resolve the issue of who is in charge of siting and safety matters and should establish a «one stop» permit process.
  • Clearly defined policies and fair regulations should be adopted to accelerate the regulatory process.
  • The Federal, State and municipal permit processes should be coordinated.
  • The Federal Government should assist industry in meeting energy demands and in determining the safest, most viable means to transport, store, and distribute LNG in interstate commerce.
  • The Federal Government should ensure a smooth transition to the new Department of Energy.
  • The Federal Government should develop a pricing structure which will ensure adequacy of supply.
  • The Federal Government should adopt a clear policy on incremental and rolled-in pricing.
  • Additional study should be made of pipeline vs. LNG systems of transportation, including study of the political, security of supply, safety, and environmental issues.
  • Studies should also be made which would improve LNG vapor dispersion analysis and allow refinement of vapor dispersion models to take into consideration local topography and manmade obstructions.
  • Studies should be undertaken to identify the problems and solutions associated with transportation and distribution of LNG to and from inland base load and peak shaving plants (one respondent said further studies were not desirable because they would only cause additional delays in development of LNG).

Actions desired by public interest groups

Respondents from public interest groups included representatives of California-based national groups such as the Natural Resources Defense Council and the Sierra Club; Washington-based national groups such as the Environmental Policy Center; and local citizens groups in:

  • Maryland,
  • California,
  • Rhode Island,
  • New Jersey,
  • New York,
  • Massachusetts,
  • Texas.

The respondents suggested the following:

  • Congress should adopt legislation to restrict LNG storage tanks and terminals to isolated areas (Respondents varied in siting criteria. Some said LNG terminals and tanker routes should be at least 1 mile from populated areas. Other suggested distances ranging up to 25 miles from populated areas. Several said terminals should be restricted to offshore sites. One said terminals should be located in already industrialized areas with small populations).
  • The Federal Government should take a more active planning role in LNG terminal siting and should establish broad Federal policy on siting in advance of individual project decisions.
  • Federal siting policy should be developed through public hearings on generic safety and siting considerations.
  • The Federal Government, in conjunction with State and local groups, should identify and review available sites which could be potential LNG terminal locations without waiting for specific applications.
  • The Federal Government should act to ensure rational land-use planning by the States through the Coastal Zone Management Act or other means.
  • The Federal Government should determine whether and how much LNG is needed and limit LNG imports so that they do not become a major part of the US gas supply.
  • The Federal regulatory procedure should be improved to allow for timely selection of sites, if they are needed, with maximum public participation in the process.
  • The Federal Power Commission should mandate incremental pricing for LNG, and keep a close watch on price and supply.
  • Federal supervision of daily operations of LNG facilities should be increased.
  • Existing LNG tanks that do not meet new siting criteria should be phased out.
  • The Federal Government should set mandatory conservation standards and determine uses of natural gas in order to diminish reliance on natural gas.
  • The Federal Power Commission should develop procedures for ensuring effective public participation, including adequate notice of pending proceedings and payment of attorney and witness fees for intervenors.
  • The environmental impact statement process should be simplified and should include consideration of safety issues.
  • The Coast Guard should strictly control the movement of LNG tankers and other ship traffic on the LNG tanker route.
  • There should be intensive training of all personnel involved in the inspection and regulation of LNG tankers and facilities.
  • Transportation of LNG by truck should be controlled with procedures similar to those which regulate the movement of LNG tankers.
  • The Federal Government should mandate development of evacuation plans by local jurisdictions near LNG facilities and ensure that there will be adequate local firefighting capability.
  • Congress should adopt legislation to ensure that there will be adequate liability insurance which defines coverage and responsibility for accidents.
  • There should be additional studies of large marine spills of LNG, vapor dispersion, and other safety questions, including the consequences of large terminal accidents, the effect of such accidents on homes and industries supplied by the terminal, the time required to rebuild a terminal, alternate energy sources available after an accident, size of the area endangered, methods of combating LNG fires, and methods of protecting citizens in endangered areas.
  • Studies should also be made of LNG import projections under all regulatory circumstances (i. e., with and without import restrictions, with rolled-in pricing, with incremental pricing, etc.) and the economic consequences of LNG embargoes by producing nations.
  • Studies should be made to find appropriate alternatives to the development of LNG systems.
  • Siting of LNG facilities in areas which have prime ecological or aesthetic values should be avoided.

Congressional hearings conducted on liquefied natural gas

US Congress Senate Committee on Commerce. Hearing on S. 2064, 93d Congress, 2d session. 1974.

The Committee hearings were held on June 12, 13, and 14. The Bill was introduced by Senators Magnuson and Cotton June 25, 1973, to amend the laws governing the transportation of hazardous materials. The Bill:

  1. «Would provide additional methods of enforcement, extend regulatory coverage and remove existing restraints upon the Secretary of Transportation to delegate regulatory authority».
  2. Review hazardous material statutes and evaluate Federal agency responsibilities and jurisdictional overlaps concerning transportation of hazardous materials.

US Congress House Committee on Interstate and Foreign Commerce. Special subcommittee on investigations. Legislative issues relating to the safety of storing liquefied natural gas. Hearings, 93d Congress, 1st session. July 10-12, 1973. Washington, D. C., US Government Printing Office, 1976.

The hearings focused on the Staten Island explosion February 10, 1973. To obtain legislative information, the subcommittee investigated:

  1. the enforcement and adequacy of storage tank safety regulations;
  2. FPC and OPSO LNG safety responsibilities authorized by the Natural Gas Act of 1938 and the Natural Gas Pipeline Safety Act of 1968;
  3. the question: «Is the state-of-the-art of cryogenic storage sufficiently advanced to be safe?».

US Congress House Committee on Interior and Insular Affairs, Subcommittee on Public Lands. Alaska Natural Gas Transportation System. Hearings, 94th Congress, 1st session, October 9, 1975. Washington, D. C., US Government Printing Office, 1975. 340 p. serial no. 94-36.

This report delves into the land-use implications of the three proposed Usage of Equations of State in Liquefied Natural Gas Systems for Modeling Phase Behaviornatural gas systems. The environmental as well as social impacts of each of the applications are discussed.

US Congress Senate Committee on Interior and Insular Affairs/Committee on Commerce. The transportation of Alaskan natural gas. Hearing, 94th Congress, 2d session, part 1 and 2, February 17, 1976. Washington, D. C., US Government Printing Office, 1976. 1515 p. serial no. 94-29.

The purpose of the hearings was to explore energy, economic, and environmental policy issues in connection with the production and transportation of the Prudhoe Bay gas reserves. The discussion revolved around the necessity for additional gas, gas distribution, and financial arrangements for the proposed project.

US Congress Senate Committee on Interior and Insular Affairs/Committee on Commerce. The transportation of Alaskan natural gas, Hearings, 94th Congress, 2d session, part 3. March 24 and 25, 1976. Washington, D. C., US Government Printing Office, 1975. 2030 p. serial no. 94-29, (Commerce), 94-29 (Interior).

The hearings concentrated on four bills:

  • S. 2510,
  • S. 2778,
  • S. 2950,
  • S. 3167.

S. 2510 was introduced by Senator Gravel on October 9, 1975. The Bill requires that the FPC make a decision by June 30, 1976, on the applications posed by El Paso and Alaska Arctic Gas.

S. 3167 also introduced by Senator Gravel is another attempt to expedite an FPC decision on the gas pipeline proposals. S. 3167 directs the FPC to make a decision and transmit that decision to the President by January 1, 1977. By February 1, 1977 the President would have requested agency reports. The reports would be due by August 1, 1977, and the President’s decision forthcoming.

S. 2778, introduced by Senator Stevens, requires the FPC and other Federal agencies to approve only those gas transportation systems located in the United States or subject to international jurisdiction.

S. 2950 introduced by Senator Mondale requires that all appropriate agencies provide the necessary permits and approvals to authorize the construction of the Arctic Gas pipeline. The Bill waives NEPA procedural requirement.

US Congress House Committee on Interstate and Foreign Commerce. Subcommittee on Energy and Power. Transportation of Alaskan natural gas. Hearings, 94th Congress, 2d session. May 17-19, 1976. Washington, D. C. US Government Printing Office, 1976.

The hearings revolve around 14 separate bills which would either expedite administrative procedures for selecting a delivery system and limit agency judicial review actions or allow Congress to select the route.

US Congress House Committee on Interior and Insular Affairs. Subcommittee on Indian Affairs and Public Lands. Transportation of Alaskan natural gas. Oversight Hearings 95th Congress, 1st session. February 17, 1977 Part 1. March 17, 18 and 29, 1977 and April 5, 1977 Part 2. Washington, D. C., US Government Printing Office, 1977.

The purpose of the hearings was to gather detailed and comprehensive information on the three methods of transporting Alaskan natural gas. The three proposals are:

  • the El Paso Alaskan LNG project;
  • the Alaskan Arctic gas project;
  • the Alcan or Alaskan Highway project.

Representatives from the gas industry, American and Canadian labor unions, environmental organizations, public officials, academicians, and Canadian Indians presented their proposals and various arguments.

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Literature
  1. Transportation of Liquefied Natural Gas, September 1977.
  2. Federal Energy Administration, Monthly Energy Review, March 1977.
  3. US Department of the Interior, Bureau of Mines, World Natural Gas Annual (Washington, D. C.: US Department of the Interior, Bureau of Mines, 1975).
  4. «LNG Report», Pipeline and Gas Journal 204 (June 1977).
  5. Interview with Officials of Export-Import Bank of the United States, Washington, D. C., June 16, 1977.
  6. David Hawdon, World Transport of Energy 1975 to 1985 (London: Stanil and Hall Associates Limited, April 1977), p. 39.
  7. Federal Power Commission, «Table of LNG imports and exports for 1976», News Release, June 3, 1977, and Federal Energy Administration, Monthly Energy Review, March 1977.
  8. Office of Technology Assessment LNG panel meeting, Washington, D. C., June 23, 1977.
  9. Douglas M. Considive, cd., Energy Technology Handbook (New York: McGraw-Hill, 1977).
  10. American Gas Association, Gas Supply Review, 5 (February 1977).
  11. Federal Power Commission, Recommendation to the President Alaskan Natural Gas Transportation Systems (Washington, D. C.: Federal Power Commission, May 1, 1977) p. I-44.
  12. H. Magelssen, «LPG-Transportation Cost, Market Potential and Future Charterers», Gastech 76 Proceedings LNG and LPG Conference, New York, Oct. 5-8, 1976, (Herts, England: Gastech Exhibitions, 1977).
  13. Society of Naval Architects and Marine Engineers, Proceedings of Second Ship Technology and Research (STAR) Symposium (San Francisco, Calif.: May 25-27, 1977), p. 396.
  14. Telephone interview with staff of the Bureau of Mines, Pittsburgh, Pa., Sept. 7, 1977.
  15. Telephone interview with staff of Naval Weapons Laboratory, China Lake, Calif., Aug. 25, 1977.
  16. American Gas Association, LNG Information Book 1973 (Arlington, Va.: American Gas Association, 1973).
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  23. Interviews with Federal Power Commission staff, Washington, D. C., May 31 and June 24, 1977.
  24. Edward Faridany, LNG: 1974-1990 Marine Operations and Market Prospects for Liquefied Natural Gas, (London: Economist Intelligence Unit Limited, June 1974), p. 69.
  25. Interviews with Officials of Distrigas Inc., Boston, Mass., .June 15, 1977.
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  29. US Department of Commerce, Maritime Administration, Status of LNG Projects (Washington, D. C.: US Department of Commerce, Maritime Administration, September 1976).
  30. Interview with official of General Dynamics Company, Boston, Mass., June 15, 1977.
  31. General Dynamics Gets Tanker Job for $310 million, Wall Street Journal, July 28, 1977.
  32. «Subsidized Shipbuilding Contract Awards» Statistical Quarterly (First quarter 1977).
  33. Interview with officials of Export-Import Bank of the United States, Washington, D. C., June 16, 1977.
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  50. Interviews with officials of Distrigas Inc., Boston, Mass, June 15, 1977.
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  55. Interviews with officials of Distrigas Inc., Boston, Mass, June 1977.
  56. US Department of Commerce, Maritime Administration, Status of LNG Vessels.
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  59. Max Levy, «The Cove Point, Maryland LNG Terminal», Conference on LNG Importation and Terminal Safety, Boston, Mass., June 13-14, 1972.
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  69. Federal Power Commission, Recommendation to the President Alaskan Natural Gas Transportation Systems (Washington, D. C.: Federal Power Commission, May 1, 1977).

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