FALL RIVER -- While
representatives from the Federal Energy Regulatory Commission, the
agency that will decide whether Weaver's Cove Energy, LLC can
construct a liquefied natural gas facility in Fall River, are in the
city today to tour the proposed site, during the past seven weeks
thousands of people have signed a petition opposing the
project.
The Coalition for the Responsible Siting of LNG Facilities, a local
group that formed to oppose Weaver's Cove's plan, last week sent
copies of 4,000 signatures to the FERC, Attorney General Thomas
Reilly, Gov. Mitt Romney and the local senatorial and congressional
delegation. "In the first three weeks we got the 4,000 and we
haven't even had time to make copies of the others," said Brian
Pearson, a spokesman for the coalition.
Though most of the signees are from the general vicinity, the petition
includes signatures from people who live throughout Massachusetts and
Rhode Island and as far away as Jacksonville, Fla.
Pearson and coalition president Joseph Carvalho said having
individuals from outside the immediate area sign petition is
consistent with the group's mantra.
"As you notice we are the Coalition for the Responsible Siting of
LNG facilities," Pearson said.
"People want to go on record in opposition to siting,"
Carvalho said. "Sometimes these" LNG proposals "show up
in the darndest of places and" signees from outside the area
"are saying (they) wouldn't want it in (their) residential
area."
Carvalho said opponents of the proposed facility are sending signed
petitions to the coalition every day.
Besides sending out the petitions, the coalition has also prepared for
FERC's arrival by joining forces with local residents to put up
anti-LNG signs.
"We got the signs made and they came in last week and we were
going to put them up no matter what," Pearson said. "So it
did work out well that they will be up when FERC comes
in."
Pearson said last weekend about 175 signs were put up. Many of the
signs are outside houses near the proposed site on North Main
Street.
Carvalho said members of the coalition will be joining FERC
representatives to tour the site today and will participate in a
rally, organized by Mayor Edward M. Lambert, to oppose the facility
prior to the tour.
The site visit, which is open to the public, will begin at 2 p.m. at 1
New St., the former Shell Oil site. The rally will commence at 1:30
p.m. and will take place in the same general area.
"It's really kind of an impromptu thing," Lambert said of
the rally. "It's really more about people gathering to show
their opposition."
Weaver's Cove Energy is a privately held company owned by Poten &
Partners.
FALL RIVER --
Representatives of the Federal Energy Regulatory Commission, the
agency that has the final say as to whether Weaver's Cove Energy,
LLC can construct a liquefied natural gas facility in the city, will
be in Fall River Tuesday to visit the proposed site.
The public is invited to the
tour which will begin at 2 p.m. at the entrance to the site on 1 New
Street. Prior to the tour, Mayor Edward M. Lambert, Jr., a staunch
opponent of the project, plans to hold a rally outside the site at
1:30 p.m. Lambert said he expects representatives of both U.S. Reps.
Jim McGovern and Barney Frank, D-Mass. as well as state and city
officials to attend.
"The point of (it) will be to help inform the opposition what the
status is," Lambert said. "It will give them a chance to
hear from elected officials ... who might want to be part of the
event. It's a way to continue to galvanize
opposition."
Besides coming to the rally,
Lambert said it's important for opponents of the project to also
attend the tour.
"FERC has said the public is invited and I hope the public takes
advantage of the opportunity to come out and express themselves to
FERC officials," Lambert said. "I understand it's not a
public hearing and the format is more of a site visit, but I think any
time you can take advantage of communicating in one form or another to
these federal officials you should do that."
According to FERC spokeswoman Tamara Young-Allen, while the public is
invited for the on-site visit, it won't be" a scoping session
where people can come and express their views."
"Anything you need to share you can submit in writing to the
commission," she said.
Young-Allen said at least one of the FERC representatives would be an
engineer who will be responsible for drafting the environmental impact
statement. The statement will play a significant role in FERC's
decision to approve or reject the project.
"Part of our environmental mandate is to go out and look at the
proposed sites and find out what potential environmental impacts there
will be if the project is certified," Young-Allen
said.
Though Young-Allen said the visit is for viewing purposes, she expects
the representatives will explain to the public why they are
there.
In addition to walking or driving around the site, Young-Allen said
the FERC would also do a fly over.
"They will eyeball what's there and take into account the
environment and that information will be used in our analysis of the
proposal," Young-Allen said.
While the FERC representatives are only scheduled to visit the site,
Lambert plans to ask them to tour the area around the site as
well.
"I don't think just visiting the site itself tells the whole
story about the project," Lambert said. "I think to fully
understand it, FERC officials should tour the neighborhood and I'd
be happy to take them on that tour."
Lambert said he would extend the invitation to the FERC prior to
Tuesday.
"They need to see how outrageous this proposal is and I hope with
some common sense they will review everything about this project,"
Lambert said. "Not just what they see on the site itself, but its
proximity to everything else."
Weaver's Cove Energy, LLC, is a privately held company owned by
Poten & Partners.
State Takes National
Lead in Opening Access to World's Natural Gas Supplies to Head Off
Looming Domestic Energy Crisis
Cheniere Energy Inc. (AMEX:LNG) Attending the Offshore Technology
Conference in Houston for meetings with the nation's oil & gas
executives, Louisiana's Governor, Kathleen Babineaux Blanco committed
her state's full support for Cheniere Energy's Sabine Pass LNG
Receiving Terminal in southwest Louisiana. Blanco's charge to her
state's agencies and to the Federal government to support the project
follows the overwhelming support from local communities nearby the
site where Cheniere Energy plans to build the nation's largest
receiving terminal to import over 2.6 billion cubic feet per day of
LNG (Liquefied Natural Gas).
Governor Blanco is leading Louisiana to the forefront in the race to
secure the nation's access to the world's abundant and cheaper supply
of natural gas -- the most environmentally friendly fuel supply. The
country's lack of access to wider supplies of natural gas and its
threat to our economy has been underscored repeatedly by Federal
Reserve Chairman Alan Greenspan in speeches and testimony before
Congress as the nation's industrial and power complex continue to lose
jobs, and consumers nationwide face ever higher energy bills.
Governor Blanco said that "Greater economic development for
Louisiana is the cornerstone of my administration and has been my
mission in public service. We are committed to ensuring access to
economic, safe and environmentally friendly energy supplies that will
not only create jobs in our state, but will keep jobs here."
Cheniere and its contractors will employ over 600 people during
construction of this facility and will create over 120 direct and
indirect jobs when operational.
A recently released report "Economic Opportunities for LNG
Development in Louisiana" by the Center for Energy Studies at
Louisiana State University concluded that development of a liquefied
natural gas infrastructure in the state could increase gas export
volumes through the existing pipeline system by over 237%, could
provide $398 million in annual gas expenditure savings, create over
13,000 jobs and preserve 11,600 existing jobs, and inject over $2.3
billion into the state economy.
Charif Souki, chairman of Cheniere, said, "We are thrilled by the
reception of the state of Louisiana and Cameron Parish to our project.
We are grateful to Governor Blanco for her leadership and support. We
look forward to making a positive contribution to the economy of the
state for many years to come."
The governor's staff noted that the plans for the terminal were
presented to local and adjoining community residents in March at a
widely attended Scoping Meeting conducted by the Federal Energy
Regulatory Commission (FERC), which oversees safety and coordinates
permitting of these facilities. FERC staff, there to introduce the
project were pleased to find our residents had been studying the
project since it was announced in 2001. A very loud chorus of support
was the message FERC took home to Washington, D.C.
Governor Blanco added, "The residents, our civic organizations
and I have written to FERC in support of the project and we will be
contacting them regularly to ensure they do everything possible to
satisfy our request to expedite Cheniere's permit. I also want to
recognize the efforts of Louisiana Economic Development in
facilitating Cheniere's choice to expand in Louisiana. We welcome
Cheniere to our State and to our community."
Cheniere Energy Inc. is a Houston-based developer of liquefied natural
gas receiving terminals and a Gulf of Mexico Exploration &
Production company. Cheniere is developing Gulf Coast LNG receiving
terminals near Sabine Pass, La., and near Corpus Christi, Texas.
Cheniere is also a 30% limited partner in Freeport LNG Development,
L.P., which is developing an LNG receiving terminal in Freeport,
Texas. Cheniere conducts exploration for oil and gas in the Gulf of
Mexico using a regional database of 7,000 square miles of PSTM 3D
seismic data. Cheniere also owns 9% of Gryphon Exploration Company,
along with Warburg, Pincus Equity Partners, L.P. which owns 91%.
Additional information about Cheniere Energy Inc. may be found on its
Web site at
www.Cheniere.com, by contacting the company's investor and media
relations department toll-free at 888-948-2036 or by writing
to:
Info@....
Photograph of Artist's Rendition of Cheniere Energy Sabine Pass LNG
Receiving Terminal available as JPEG on-line at
www.Cheniere.com
Except for the historical statements contained herein, this news
release presents forward-looking statements that involve risks and
uncertainties. Although the company believes that the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, it can give no assurance that its expectations will be
achieved. Certain risks and uncertainties inherent in the company's
business are set forth in the company's periodic reports that are
filed with and available from the Securities and Exchange
Commission. Contacts
State of
Louisiana Governor's Office
Denise Bottcher or Roderick Hawkins, 225-342-9037
The report entitled "Natural Gas Update:
Winter 2003-2004: U.S. Dependence on Imported Liquefied Natural Gas"
by Rich Ferguson, Research Director, Center for Energy Efficiency and
Renewable Technologies Sacramento, CA, discusses developments over the
last 16 months and points out that the U.S. is now effectively
dependent on LNG and will become increasingly more so unless strenuous
measures to reduce demand are taken. The
report can be found at
http://www.ceert.org/pubs/crrp/index.html
TransCanada eyes more sites for LNG terminal The Associated Press
http://www.projo.com/ap/ne/1083434302.htm
AUGUSTA, Maine (AP) - The company that had
eyed Harpswell as a port for a liquefied natural gas terminal until
voters said no is looking elsewhere in southern Maine, the state's
economic development chief said.
Officials of TransCanada Power met with state officials in
mid-April.
Economic and Community Development Commissioner Jack Cashman said
TransCanada Power, still working with ConocoPhillips, has identified a
handful of sites south of Rockland.
A new terminal would need facilities to dock 1,000-foot ships, offload
the frozen fossil fuel, reconvert it to natural gas, then pump it to
an existing pipeline.
TransCanada spokeswoman Heidi Feick said Friday that 27 potential
sites were identified before Harpswell. Many of those were
subsequently eliminated.
TransCanada did not inquire about the availability of state-owned
Sears Island in Searsport for a terminal, Cashman said.
Cashman said Gov. John Baldacci wants to see a match between a willing
host community and an LNG terminal.
Feick said TransCanada could not pledge to pursue a terminal project
only in a community that welcomes it, but "as an organization, we
are very committed to working with and building relationships with all
stakeholders."
No other companies have contacted the state with serious proposals,
Cashman said.
Thursday, April 29, 2004 - A new party has waded into the
debate over a proposed liquefied natural gas terminal in the Port of
Long Beach organized labor.
About one hundred members of the Building and Construction Trades
Council showed up to support the proposed terminal at an informational
forum Thursday at the Aquarium of the Pacific.
The forum brought together developers of the project, Port of Long
Beach officials, air quality regulators and environmentalists strongly
opposed to the terminal.
Sound Energy Solutions, a Long Beach-based subsidiary of Mitsubishi
Corp., is planning to build an LNG receiving terminal on Terminal
Island by 2008.
LNG is methane cooled to minus 259 degrees. Once chilled, it is a
colorless, odorless liquid that is easier to transport and store
because it is 600 times more concentrated than natural gas in its
vapor form.
It's estimated that the proposed terminal in Long Beach would bring in
enough LNG to provide for 10 percent of California's natural gas
demands.
Tom Giles, chief operating officer at SES, told the crowd Thursday
that natural gas from the terminal would be sold at a discounted rate
to Long Beach Energy, the city's independent electric utility
company.
Giles and Richard Slauson, representative for the Los Angeles/Orange
County chapter of the trades council, were cheered at nearly every
turn by the members of the trades council, who wore bright orange
stickers that read "Yes LNG.'
Giles has committed to using union labor on the terminal, which would
take three years to build if approved.
Slauson said members of the local trades council have extensive
experience in constructing natural gas pipelines and plants and would
welcome the project.
"We believe SES is committed to the same safety and environmental
concerns as the trades council is,' he said.
Meanwhile, opponents decried the project as either unsafe or
irresponsible because it continues reliance on fossil fuels from
overseas.
"We're doing this so the city can make income and we're doing it
at the expense of investing in renewable energy,' said Bry Myown of
Long Beach Citizens for Utility Reform.
About a quarter of the crowd wore anti-LNG buttons or toted signs
opposing the project.
Energy and air regulators also weighed in, saying that while LNG was
needed in California, the Long Beach project would have to meet strict
safety and environmental obstacles to be approved.
California and federal regulators have haggled for months over who has
jurisdiction over the project, with the Federal Energy Regulatory
Commission claiming that it is the lead agency.
Harvey Morris, an attorney with the California Public Utilities
Commission, said his agency would continue to fight that decision.
CPUC, he added, is concerned about several aspects of the project,
notably its proximity to population centers and 27 active earthquake
faults.
"These at least warrant hearings, not just environmental
reports,' he said. "If it's shown to be safe, we will certainly
certify it.'
The port, however, has claimed that it will cast the deciding vote as
it has yet to formally lease the land to SES. And Port planning
director Robert Kanter said the project will come before the Long
Beach Harbor Commission for four approvals, giving the public the
chance to voice its concern.
Giles said he hopes to have won approval from 20 federal, state and
local agencies by the end of 2004 so that the $450 million
construction phase can begin in January.
Elizabeth_Dorsey@...
04/30/2004
HARPSWELL - A group of Harpswell's former selectmen say the democratic
process failed on March 9, the day voters defeated plans for a
liquefied natural gas terminal on Harpswell Neck.
In a new program scheduled to air tonight on Harpswell Community
Television, a panel of nine former selectmen discuss the campaign
leading up to the LNG vote, an Election Day bomb threat, and whether a
re-vote would help or hinder a town struggling to heal after an
acrimonious seven-month campaign.
Voters defeated the proposed $350 million terminal project by a margin
of 56 percent to 44 percent.
Soon after, a group of Harpswell residents began circulating a
petition calling for a second vote on the LNG proposal.
Members of Yes! For Harpswell's Future, the group backing the
petition, produced the video as a way to drum up support for their
effort and to let residents know why they're doing it.
So far, they've collected "significantly over 1,000 and are still
focused on a goal of 2,000 plus" signatures, wrote group member
George Swallow, in an e-mail this morning.
"Unfortunately we are finding many people who support the re-vote
are wary of putting their signature on a piece of paper. This is the
prime reason for our petition. People should have no reason to be
afraid to state their position on an issue in this country,"
Swallow said.
The group has not decided when, or if, they will turn in the petition
to selectmen, but a decision is likely to come during the next month,
group members said.
"This is not about LNG at all. This is about the democratic
process," said Chris Heinig, a member of the group's steering
committee.
"We want to help the public realize they can speak their minds no
matter what side of the issue they are on," added Debora
Levensailor, who helped produce the video. "It's not about
Fairwinds. It's about having a fair vote."
During the first vote, held at Harpswell Islands School, an anonymous
caller told police that someone had planted a bomb at the polling
place, the town office and on the Mountain Road bridge. Some say the
prank disenfranchised voters, who were intimidated by the heavy police
and media presence at the school.
Some also say voters were afraid to come to the polls even before the
bomb threat.
In the days leading up to the vote, residents on both sides of the
debate reported incidents of vandalism and personal threats. Angry
campaign signs sprouted around town and misinformation abounded.
Controversy erupted over every aspect of the LNG issue, including a
failed attempt to have three separate polling locations, a plan aimed
at making it more convenient for voters to get the polls.
People polarized to opposite sides of the debate before all the facts
came to light, and lawyers, pollsters and big advertising budgets
clouded the prospects for a cordial debate among neighbors in a
thoroughly un-Harpswell-like manner, said some of the panelists on the
video.
All of these factors combined to create a cloud of fear that might
have kept some people from casting their votes March 9, said some
panelists.
"The whole campaign, right from the beginning, was like a street
fight more than a debate," Swallow said during the taped
program.
Ed Johnson, a 76-year-old former selectman, said he's never seen such
a bitter campaign in all his years in Harpswell.
A majority of the former selectmen said a re-vote would help restore
the town's faith in the democratic process. Even if the vote turns out
the same, a re-vote would be worth the trouble, said some former
selectmen.
"If only one vote was not cast, it was not fair," said
former Selectman Bob Webber.
But the selectmen were not in unanimous in that
sentiment.
"I don't know a single person who was turned away because of the
bomb scare," said David Chipman, noting that 72 percent of
registered voters cast their ballots, more than voted in the last
presidential election. "I think the vote accurately depicts the
temperature of the town. The people voted it down and we should let it
stay that way," he said.
Others, however, said they had expected even more people to come to
the polls given the enormity of the issue.
The program also contains testimonials from citizens who have already
signed the petition. None made much mention of the merits of having an
LNG terminal. Instead, they spoke about the trampling of voter rights,
the atmosphere of intimidation and their fear that what happened
during the LNG campaign will happen again.
"The next time we have a vote, who's to say it's going to stop?"
asked resident Andrew Schaedler.
The program currently is scheduled to air tonight at 7 p.m., 1 p.m. on
Monday, 7 p.m. on Wednesday and 1 p.m. on Thursday.
The Pacific
Coast Terminal project said yesterday it is moving to Stage 2 in its
plans to develop a privately funded $300 million liquefied natural gas
(LNG) receiving terminal at the Port of Kitimat. Once constructed, the
facility would become an energy supply source for the Pacific North
West by importing LNG and then delivering gas into the Pacific
Northern Gas pipeline and into the Westcoast Transmission system. Over
the next four months, the project will solicit long-term commercial
contracts. Assuming permitting approval, the terminal will be in
commercial operation by November 2008. The project says it will
generate 700 construction jobs and 50 permanent jobs once the facility
is in operation.
Hi all,
I just wanted to let you all know that I have changed some of the
settings so that the archives of all the messages posted on this list
are now open to all. If you have people who might be interested in
joining but want to know what they are getting themselves into they
can visit the group's website at:
http://groups.yahoo.com/group/LNGsafety/ and view all the messages
posted to date.
The archive is also a good place to find articles that you remember
reading that you may be looking for at some point in the future.
There is a search function to the archive as well as being able to
narrow it down by month.
People can join be sending a blank email to:
LNGsafety-subscribe@yahoogroups.com
Please pass this along to others you know who may be interested.
All members can post by sending their message to:
LNGsafety@yahoogroups.com , so please start sending articles,
documents, discussion items, etc. As I said the other day the first
time you post a message there may be a delay in it showing up on the
list because I will need to approve your first message to make sure
you are not a bulk spammer trying to dump on us all.
Thanks
Have a wonderful weekend! The weather is just gorgeous here in
Bellingham today.
Carl
Besides the obvious problems associated with potentially damaging the end user equipment, like power plant turbines and most of you home user furnaces, water heaters etc, from large variations in BTU content, liquid “condensate” slugging associated with “rich” gas supplies can plan real havoc with end users (as well as pipelines) if they don’t have the right knock out equipment (most don’t). In addition, various off spec contaminants can accelerate the reaction kinetics for pipeline internal corrosion rather quickly (And I better not hear that a gas velocity factor provides adequate protection for this new major risk factor of concern).
A reading of the NTSB report on the Carlsbad pipeline failure should give one a better appreciation of what happens when some contaminants from gas production “facilities” are not properly specified or properly monitored, or enforced, on gas streams entering gas transmission pipelines. This issue is really a gas supply cost matter as producers/suppliers (i.e. many foreign LNG suppliers) try to cut their capital and operating costs (avoiding proper treating equipment while shifting failure risks to the pipeline operator and associated public under the guise of “free market enterprise.” It especially becomes a risk factor when gas prices are spiking for what ever reason.
I come from the old school: the transmission pipeline sets the proper specs via public tariffs and enforces these with a vengeance with little patience for “monkey business”. Unfortunately too many pipeline companies may be influenced by the incestuous relationships between gas producer, pipeline company, and electric power plant generator that can remove common sense from the ultimate risk management decision. This wacky experiment at trying to get more BTU energy into the gas system of this country has serious risks associated with it if not properly thought out, spec ed out, and implemented. In gas producer land we call this go for the short term bucks approach “blow and go.” In gas transmission pipeline land we call the same approach “go and blow.” This definitely is a pipeline and general public need to know and understand issue.
On 4/29/04 1:20 PM, "Carl Weimer" <carlw@...> wrote:
Hi all,
It is my understanding that this inconsistent quality of gas can be a major problem with maintaining pipelines properly, and that the rise in the use of LNG will exasperate this problem. Does anyone know if that is true, or can enlighten us on this?
It used to be that natural gas producers would strip out traces of propane and butane before piping the desired fuel -- primarily methane -- to power plants and utilities. The impurities were actually worth more than the natural gas itself, so collecting them gave producers a nice side business.
But today, with gas supplies tight and valued at twice their historical average, many producers want to pump as much as they can -- impurities included. The result is a fuel cocktail that many power plants and home appliances weren't designed to handle, presenting a number of safety, environmental and reliability concerns.
Industry officials frustrated by the increasingly inconsistent quality of natural gas have warned federal regulators about potentially dangerous levels of carbon monoxide emissions in homes, increased pollution from power plants and needless wear and tear on gas turbines and home appliances.
With as much as a third of the natural gas from the lower 48 states no longer processed to remove propane, butane and other liquid hydrocarbons, "it can lead to a number of consequences -- all of which are bad," according to Keith Barnett, vice president of fundamental analysis at American Electric Power Inc., one of the largest producers of electricity.
In New York, the utility KeySpan Energy was forced to shut down a plant several times in 2003 after receiving unprocessed fuel that differed significantly from "what the plant was originally designed to handle," according to a filing with the Federal Energy Regulatory Commission.
The characteristics of natural gas are also changing as high prices attract more imports and domestic drillers find new sources of fuel in unconventional geologic formations once deemed too costly to tap.
Such is the case in Utah, where Quester Gas Co., has been urging some customers to spend upwards of $100 per home to adjust settings on older furnaces and water heaters. The company is concerned that the carbon-dioxide rich gas it is siphoning out of coal seams might emit dangerous levels of carbon monoxide without the changes.
Several industry officials said it is too soon to know just how widespread and severe the problems may be. However, around the country power producers and utilities are facing higher maintenance costs and have, at times, been forced to cut off service to clean equipment.
"This is not a panic situation by any stretch of the imagination," insisted Lori Traweek, senior vice president of operations and engineering at the American Gas Association, which represents local gas distribution companies. "There has to be comfort in knowing that this issue is being addressed."
Yet other industry officials were more cautious in their analysis, stressing the need for more research into the potential safety and reliability risks.
"We're still in the learning phase," said Mark Kendall, vice president of technical affairs at the Gas Appliance Manufacturers Association, an Arlington, Va., trade group that will hold a conference on the issue in June. Concerns at GAMA, Kendall said, are excessive carbon monoxide emissions, as well as excess soot and other damage to gas stoves, water heaters and furnaces that could reduce their lifespans by as much as 50 percent.
Robert D. Wilson, director of environmental operations at KeySpan Energy, told FERC in a March 22 filing "the assumption that existing appliances will not be significantly impacted by gas quality variability would not be prudent and additional technical evaluation is needed prior to drawing any conclusions."
Meanwhile, the National Petroleum Council, a consortium of energy executives that advises the Energy Department, urged the government last September to address the issue of natural gas standards in preparation for rising imports of liquefied natural gas, or LNG.
FERC held a conference on the matter in February after it began to see a growing number of legal disputes over gas specifications between natural gas suppliers and pipeline owners.
While the problems associated with inconsistent fuel quality have been known for decades, they are more relevant now as the industry tries to keep up with rising natural gas demand.
In the past, suppliers had an economic incentive to strip out most impurities from the methane, creating a relatively uniform product from year to year. But in recent years it has made more financial sense for suppliers to leave them mixed in the gas stream, boosting overall volume and revenue by about 5 percent, as well as eliminating the need for expensive processing plants.
Trouble is, a natural gas stream with a heavier concentration of liquid hydrocarbons can damage equipment that isn't properly calibrated ahead of time.
The industry has safeguards to prevent "slugs" of liquid from gumming up gas turbines and appliances, but executives acknowledged these protections don't always work. In fact, some protective equipment was taken out of the system in the 1990s when it seemed that natural gas would remain cheap and uniform in quality.
"There have been instances where these liquids get carried all the way to the turbines, which damages them and sometimes shuts them down," said AEP's Barnett, who estimated it would cost several hundred thousand dollars per power plant to make highly sensitive equipment more flexible to different gas varieties.
Without these adjustments the "wet" unprocessed gas, which burns hotter, could also cause power plants to unintentionally spew more pollutants than they are allowed to under laws set by the Environmental Protection Agency, Barnett said.
Another trend drawing attention to the chemical characteristics of the nation's natural gas supply is the increase of LNG being imported to make up for declining domestic production. Much of that fuel, shipped to the United States in refrigerated tankers from as far away as Qatar and Nigeria, burns hotter, just like the "wet" gas, and thus has the potential to cause similar problems.
In spite of the potential problems, industry officials said they are equally concerned about regulatory changes that could limit the supply of natural gas. For now, FERC is giving the industry time to work up a collaborative solution -- probably a combination of new standards for producers and end-users, as well as methods for adhering to them.
A fix will likely require extra spending on gas processing and new equipment, and a portion of those costs is expected to be passed along to consumers. Yahoo! Groups Links
It is my understanding that this
inconsistent quality of gas can be a major problem with maintaining
pipelines properly, and that the rise in the use of LNG will
exasperate this problem. Does anyone know if that is true, or can
enlighten us on this?
Thanks
Carl
Inconsistent
quality of natural gas raises safety and reliability
concerns
http://www.mlive.com/newsflash/business/index.ssf?/newsflash/get_story.ssf?/cgi-free/getstory_ssf.cgi?f0169_BC_NaturalGas-QualityCon&&news&newsflash-financial
By BRAD FOSS
The Associated Press
4/29/04 1:42 PM
It used to be that natural gas producers would strip out traces of
propane and butane before piping the desired fuel -- primarily methane
-- to power plants and utilities. The impurities were actually worth
more than the natural gas itself, so collecting them gave producers a
nice side business.
But today, with gas supplies tight and valued at twice their
historical average, many producers want to pump as much as they can --
impurities included. The result is a fuel cocktail that many power
plants and home appliances weren't designed to handle, presenting a
number of safety, environmental and reliability concerns.
Industry officials frustrated by the increasingly inconsistent quality
of natural gas have warned federal regulators about potentially
dangerous levels of carbon monoxide emissions in homes, increased
pollution from power plants and needless wear and tear on gas turbines
and home appliances.
With as much as a third of the natural gas from the lower 48 states no
longer processed to remove propane, butane and other liquid
hydrocarbons, "it can lead to a number of consequences -- all of
which are bad," according to Keith Barnett, vice president of
fundamental analysis at American Electric Power Inc., one of the
largest producers of electricity.
In New York, the utility KeySpan Energy was forced to shut down a
plant several times in 2003 after receiving unprocessed fuel that
differed significantly from "what the plant was originally
designed to handle," according to a filing with the Federal
Energy Regulatory Commission.
The characteristics of natural gas are also changing as high prices
attract more imports and domestic drillers find new sources of fuel in
unconventional geologic formations once deemed too costly to tap.
Such is the case in Utah, where Quester Gas Co., has been urging some
customers to spend upwards of $100 per home to adjust settings on
older furnaces and water heaters. The company is concerned that the
carbon-dioxide rich gas it is siphoning out of coal seams might emit
dangerous levels of carbon monoxide without the changes.
Several industry officials said it is too soon to know just how
widespread and severe the problems may be. However, around the country
power producers and utilities are facing higher maintenance costs and
have, at times, been forced to cut off service to clean equipment.
"This is not a panic situation by any stretch of the
imagination," insisted Lori Traweek, senior vice president of
operations and engineering at the American Gas Association, which
represents local gas distribution companies. "There has to be
comfort in knowing that this issue is being addressed."
Yet other industry officials were more cautious in their analysis,
stressing the need for more research into the potential safety and
reliability risks.
"We're still in the learning phase," said Mark Kendall, vice
president of technical affairs at the Gas Appliance Manufacturers
Association, an Arlington, Va., trade group that will hold a
conference on the issue in June. Concerns at GAMA, Kendall said, are
excessive carbon monoxide emissions, as well as excess soot and other
damage to gas stoves, water heaters and furnaces that could reduce
their lifespans by as much as 50 percent.
Robert D. Wilson, director of environmental operations at KeySpan
Energy, told FERC in a March 22 filing "the assumption that
existing appliances will not be significantly impacted by gas quality
variability would not be prudent and additional technical evaluation
is needed prior to drawing any conclusions."
Meanwhile, the National Petroleum Council, a consortium of energy
executives that advises the Energy Department, urged the government
last September to address the issue of natural gas standards in
preparation for rising imports of liquefied natural gas, or LNG.
FERC held a conference on the matter in February after it began to see
a growing number of legal disputes over gas specifications between
natural gas suppliers and pipeline owners.
While the problems associated with inconsistent fuel quality have been
known for decades, they are more relevant now as the industry tries to
keep up with rising natural gas demand.
In the past, suppliers had an economic incentive to strip out most
impurities from the methane, creating a relatively uniform product
from year to year. But in recent years it has made more financial
sense for suppliers to leave them mixed in the gas stream, boosting
overall volume and revenue by about 5 percent, as well as eliminating
the need for expensive processing plants.
Trouble is, a natural gas stream with a heavier concentration of
liquid hydrocarbons can damage equipment that isn't properly
calibrated ahead of time.
The industry has safeguards to prevent "slugs" of liquid
from gumming up gas turbines and appliances, but executives
acknowledged these protections don't always work. In fact, some
protective equipment was taken out of the system in the 1990s when it
seemed that natural gas would remain cheap and uniform in quality.
"There have been instances where these liquids get carried all
the way to the turbines, which damages them and sometimes shuts them
down," said AEP's Barnett, who estimated it would cost several
hundred thousand dollars per power plant to make highly sensitive
equipment more flexible to different gas varieties.
Without these adjustments the "wet" unprocessed gas, which
burns hotter, could also cause power plants to unintentionally spew
more pollutants than they are allowed to under laws set by the
Environmental Protection Agency, Barnett said.
Another trend drawing attention to the chemical characteristics of the
nation's natural gas supply is the increase of LNG being imported to
make up for declining domestic production. Much of that fuel, shipped
to the United States in refrigerated tankers from as far away as Qatar
and Nigeria, burns hotter, just like the "wet" gas, and thus
has the potential to cause similar problems.
In spite of the potential problems, industry officials said they are
equally concerned about regulatory changes that could limit the supply
of natural gas. For now, FERC is giving the industry time to work up a
collaborative solution -- probably a combination of new standards for
producers and end-users, as well as methods for adhering to them.
A fix will likely require extra spending on gas processing and new
equipment, and a portion of those costs is expected to be passed along
to consumers.
Government:
Possible terrorist link to LNG stowaways http://www.seacoastonline.com/news/04292004/south_of/13366.htm By Lolita C. Baldor
Associated Press Writer
WASHINGTON - The
government for the first time said Wednesday that illegal immigrants
who slipped into Boston on liquefied natural gas tankers in the 1990s
may have had terrorist connections.
The Department of
Homeland Security, in a memo made public by Rep. Edward Markey,
D-Mass., said preliminary analysis shows the immigrants may have been
connected to terrorists indicted in a 1999 plot to blow up Los Angeles
International Airport.
"The Homeland
Security Department has provided a chilling confirmation that
individuals with possible terrorist connections may have entered the
U.S. onboard LNG tankers that docked in Everett," said Markey,
adding that it underscores the need for greater security at the port
of Boston.
Sen. Edward M.
Kennedy, D-Mass., said the information "demonstrates the
appalling lack of communication between federal agencies and Boston
officials. It's far from clear that those problems are being solved
satisfactorily."
Suggestions that the
LNG tankers were used by terrorists to enter the United States first
came to light in former White House adviser Richard A. Clarke's
recently released book. Since the book _ "Against All Enemies"
_ came out in March, federal, state and local authorities have largely
denied knowledge of such a terrorist connection or declined to comment
on it.
But in a letter to
Markey, Homeland Security Assistant Secretary Pamela J. Turner said
that in "early 2001 there was some suspicion of possible
associations between stowaways on Algerian flagged LNG tankers
arriving in Boston and persons connected with the so-called Millennium
Plot."
The department, in a
separate memo, said officials received information about a possible
terrorist connection in 2000 and 2001, but authorities are still
investigating the matter. The department did not return calls for
comment.
"This
information is largely derived from what these individuals told law
enforcement," the memo said. "The department has not been
able to verify what the associations, intentions or operational
activities of these individuals were when they entered the United
States."
Last month the head
of Boston's FBI office said the agency had investigated the tanker
situation and "came to the conclusion they were not being used to
transport terrorists into our country."
Special
Agent-in-Charge Kenneth Kaiser said authorities had concluded that one
1995 LNG stowaway, Abdelghani Meskini, later convicted in the
"Millennium Plot" did not have terrorist links when he
arrived.
Boston FBI
spokeswoman Gail Marcinkiewicz said Wednesday the agency knew
stowaways were coming in on tankers "and that's why we initiated
an investigation."
Doug Bailey, a
spokesman for Distrigas of Massachusetts, which owns and operates the
LNG tankers, said he believes the report suggests ships other than the
LNG tankers could have been used by stowaways with terrorist
links.
And, he added,
"we are working with authorities, and we maintain the highest
standard of safety and security." Also, no Algerian tankers have
been allowed in Boston since May 2001, and increased security and
intelligence measures have been implemented to protect the
port.
Lawmakers have been
asking for more information on what the government knew about the link
between Boston and possible stowaway terrorists ever since Clarke's
book was released.
In his book, the
former counterterrorism chief said that al-Qaeda operatives had been
coming into Boston on Algerian natural gas tankers.
His deputy, Roger
Cressey, in published reports, later said more than a dozen stowaways
with al-Qaeda ties came in via the tankers.
Letter confirms
suspicions of smuggling on LNG ships
Federal authorities have suspected since 1995 that illegal aliens from
Algeria were sneaking into the United States aboard liquefied natural
gas tanker ships, according to a newly re leased U.S. Department of
Homeland Security document.
In May 2001, officers from the U.S. Coast Guard, the Federal Bureau of
Investigation and other federal agencies boarded an Algerian liquefied
natural gas tanker arriving in Boston and discovered a large cache of
U.S. currency and illegal drugs, according to the April 15 letter from
Homeland Security to U.S. Rep Ed Markey, D-Mass.
The letter was written in response to Markey's inquiries concerning
allegations in former U.S. terrorism chief Richard Clarke's book,
"Against All Enemies." In his book, published this year,
Clarke claimed that federal officials knew prior to the terror attacks
of Sept. 11, 2001, that "al-Qaida operatives had been infiltrat
ing Boston by coming in on liquid natural gas tankers from
Algeria."
In March, FBI officials publicly denied Clarke's assertions, although
they acknowledged that at least one Algerian who secretly entered
aboard an LNG tanker is under federal indictment for allegedly
planning to blow up Los Angeles airport as part of al-Qaida's
"Millennium Bombing Plot."
The letter that Homeland Security sent Markey also revealed that the
U.S. Coast Guard, the Customs Service and the Immigration and
Naturalization Service suspected Algerian LNG tankers of smuggling
drugs and illegal aliens as early as 1995. The letter said that
federal agencies are still investigating links between the Algerian
stowaways and Islamic fundamentalists.
"Preliminary analysis shows a handful of illegal migrants may
have had indirect associations with those indicted for the Millennium
Bombing Plot," the letter said. It also said that federal agents
had recovered "substantial amounts of U.S. currency and illegal
drugs" from an LNG tanker.
Markey said Wednesday in a written statement, "This information
would seem to confirm statements made in former counter-terrorism Czar
Richard Clarke's recent book indicating that LNG tankers entering
Boston Harbor may have been used by terrorists as a means of
infiltrating into our country."
Many of the 11 hijackers boarded the airliners used in the terror
attacks at Boston's Logan International Airport.
Markey, a senior member of the House terrorism committee, whose
district is home to Boston Harbor's LNG import terminal, has demanded
to know why federal security officials told him repeatedly that there
were no known terror threats related to the LNG tankers that had been
arriving in Boston.
There is no evidence, according to FBI statements in March, that
Abdelghani Meskini, the Algerian stowaway who has been indicted in the
airport plot, had terrorist ties when he arrived in this country.
It was unclear from FBI statements whether officials believed Meskini
became involved with terrorists after arriving in the United
States.
Concerns about potential terror attacks on LNG tankers have arisen in
Mobile, where ExxonMobil Corp. and Chenier Energy Inc., have proposed
building LNG docking terminals on Mobile Bay, one near downtown and
one in the Hollinger's Island area just south of Mobile. The tankers
deliver a super-cooled liquid form of natural gas, which is later
converted back to the convention vapor form used for residential
purposes and for electricity generation.
Officials from the Department of Energy and the Federal Energy
Regulatory Commission downplayed any possible terrorist threat in
Mobile during public meetings last year, though scientists have said
that an attack at either of the two proposed Mobile Bay sites could
devastate surrounding communities. Scientists and federal documents
suggest that a terror attack on an LNG ship could result in a fire
over a mile wide capable of burning people two miles away.
"The Homeland Security Department has provided a chilling
confirmation that individuals with possible terrorist connections may
have entered the U.S. onboard LNG tankers," Markey said in his
Wednesday statement. "This underscores the need for the federal
government, as well as state and local governments to maintain the
strongest possible security precautions for all LNG shipments entering
the Port of Boston."
Markey and a delegation of Massachusetts safety officials requested
increased federal funding to secure LNG tankers as they moved through
downtown Boston, but were rebuffed by Homeland Security in March.
Algerian-flagged tankers have been banned from Boston since May 2001,
but routinely arrive at an LNG facility in Cove Point, Md., which is
located next door to a nuclear power plant.
Debate Of LNG Heats Up By Kurt Helin
Editor
http://www.gazettes.com/grunionlng04292004.html
Long Beach CA
While it will be several months before any official hearings are
conducted or votes take place about the proposed Liquid Natural Gas
terminal at the Port of Long Beach, there still has been a flurry of
action around the topic.
In the past couple of weeks:
* Representatives from 15 local environmental groups have joined
together to start working on ways to block the terminal from being
built and ways to rally support to their cause.
* Sound Energy Solutions (SES), the company that wants to build the
terminal, has released results from a survey it had done that says 56%
of Long Beach residents support the project and only 26% oppose it.
However, opponents say surveys paid for by companies looking to build
projects often are not accurate barometers of public opinion.
* Politicians, especially those up for election and trying to get
voters' attention, have started to bring the issue forward. For
example, tonight (Thursday) Betty Karnette, the state Senator who is
running for a Long Beach state Assembly seat, will conduct a public
forum on the issue at the Aquarium of the Pacific.
All the uproar is because SES, a subsidiary of Mitsubishi Corp., plans
a 27-acre, $400 million liquid natural gas terminal that could open in
2008. The terminal could handle up to 68 million barrels of liquid
natural gas a year. Liquid Natural Gas (LNG) is the same gas used in
homes for cooking and heating, but chilled to minus 260 degrees, which
turns it into a clear liquid that can be stored in large quantities in
tanks. The gas can be reheated and used in homes.
SES is currently at the start of the complex approval process. The
project will need approvals ranging from federal to local, including
votes by the California Coastal Commission, the Long Beach Board of
Harbor Commissioners and, likely, the City Council.
Already there has been an aggressive opposition from environmentalists
and others, who have safety concerns about the terminal. The critics
question what would happen if there were an explosion at the terminal,
something that could potentially cause deaths in a two-mile radius,
according to studies promoted by the environmentalists. That radius in
Long Beach would include some homes and most of the very busy
ports.
SES officials have responded saying the plant will be completely safe
and that extensive precautionary measures will be built into the
design, as will be shown in the approval process.
They also are now promoting a survey of 725 randomly selected Long
Beach residents that shows a majority think the terminal would be a
good idea.
The survey found that 41% of the people interviewed had already heard
of the project, with just less than 20% saying they had heard a lot
about it. Also, 56% said they strongly or probably favored the
project, as opposed to 26% strongly or probably opposed.
However, while the results of the survey were released, the survey
itself has remained private. What the exact questions or statements
about the project were given to the 752 people surveyed is not
known.
Politicians are just starting to talk about the project and some are
hosting forums to hear from constituents and those involved with the
proposal. Karnette's forum from 6 to 8 p.m. tonight at the aquarium
is open to the public, but people are asked to RSVP by calling
997-0794.
City Council members are not taking formal positions so far, but
informally many seem to be opposing the project. For example, Second
District Councilman Dan Baker was asked about it by a supporter on his
election night; his response was that he would not take a position
until all the information was in front of him. However, he said, his
job was to represent the people of his district and that he had not
heard anyone supporting it.
Currently, an Environmental Impact Report for the project is being
done. When it is completed there will be a number of public hearings
about the project and the EIR.
http://www.bangornews.com/editorialnews/sections.cfm?cat=179
By Rich Hewitt, Of the NEWS Staff e-mail Rich
Last updated: Thursday, April 29, 2004
Critic: LNG plant would hurt economy
DEER ISLE - A liquid natural gas plant in Searsport would threaten the
regional economy, particularly the fishing, boating and tourism industries,
according to one opponent of such a project.Astrig Tanguay, a Searsport
businesswoman and a member of Stop Liquid Natural Gas, or SLNG, and the
Friends of Sears Island, presented a wide range of information to a handful
of island residents on Wednesday. While other opponents are focusing on
environmental issues, Tanguay said she and other business owners in the area
have concentrated on measuring the potential economic impact.
She stressed that although the state is looking at Sears Island in
Searsport as a potential site for the LNG plant, the effects of such a plant
will be felt throughout the entire Penobscot Bay region and beyond. That was
one of the reasons local residents Jane McCloskey and Lori Connor organized
the presentation.
"People need to know that it's not just a Searsport issue," Connor
said.
The state had been invited to send someone to the meeting, but did
not, Tanguay said.
Part of the economic concern stems from the tankers that would bring
the LNG from overseas sources to the port, Tanguay said. The tankers are
four football fields long and about 12 stories high, and, because they are
considered a potential terrorist target, they require stiff security
measures. Those include a security zone two miles ahead of the tanker, one
mile astern and 500 yards on either side of the vessel, she said.
In Boston, where LNG tankers arrive about twice a week, security
concerns force the temporary closure of the Tobin Bridge, U.S. Route 1 and
Logan Airport, Tanguay said.
"Imagine the impact if they closed Route 1" in Searsport, she said.
"Who's going to come to the area?"
The narrow passages on the eastern shipping channel between
Lincolnville Beach and Islesboro and Northport and Islesboro could pose a
security risk for the vessels, she said.
The moving security zone would move all vessels out of the area and
would have a negative impact on recreational and commercial boating in the
area, including local fishermen along eastern Penobscot Bay, as well as
other fishermen from the surrounding area, Tanguay said.
She also disputed state officials who have touted an LNG project as a
boon to Maine's economy that would create jobs. The Halliburton firm is
building most of the LNG plants that are in the works. The Sears Island
plant, she charged, would likely be built by out-of-state workers.
Tanguay noted that Halliburton is currently being investigated for
bribery in connection with an LNG plant in Nigeria, which is where the LNG
would likely come from.
The plant would provide just 50 permanent jobs, she claimed, with no
increase in tourism jobs and the potential for some losses.
In return, the Sears Island site would become a heavy-use industrial
site, she said, charging that once the plant was built, more related
industries would follow.
That change would result in a drop in property values along the
surrounding coastline as well as inland from the site, she said. In
addition, the fishing, recreation, tourism and real estate industries would
be changed, Tanguay said, as would the demographics of the county. Any
benefits would be temporary, because the plant will only be viable for 50
years, she said.
SLNG and other groups are trying to rev up opposition to the plant
before a formal proposal is presented to the state. By raising the alarm,
they hope to drive potential developers away.
"These companies don't want a big public relations fiasco," she said.
"They'd rather find someplace that's easier to go."
SUMMARY: The
Federal Energy Regulatory Commission(Commission) is issuing this final
rule establishing a procedure for gaining access to critical
energy infrastructure information (CEII) that would otherwise not be
available under the Freedom of Information Act (FOIA). These
restrictions and the final rule were necessitated by the terrorist
acts committed on September 11, 2001, and the ongoing terrorism
threat. The final rule adopts a definition of critical infrastructure
that explicitly covers proposed facilities, and does not distinguish
among projects or portions of projects. The rule also details which
location information is excluded from the definition of CEII and which
is included. The rule addresses some issues that are specific to state
agencies, and clarifies that energy market consultants should be able
to get access to the CEII they need. Finally, the rule modifies the
proposed CEII process and delegates responsibility to the CEII
Coordinator to process requests for CEII and to determine what
information qualifies as CEII.
The final rule
will affect the way in which companies submit some information, and
will add a new process in addition to the FOIA for requesters to use
to request information that is not already publicly available. These
new steps will help keep sensitive infrastructure information out of
the public domain, decreasing the likelihood that such information
could be used to plan or execute terrorist attacks.
EFFECTIVE
DATE: The rule will become effective April 2, 2003.
GLOBAL LNG SUMMIT Tuesday, June 1, 2004 8am-5pm Joan Kroc Institute for Peace & Justice University of San Diego, San Diego, California
The Global LNG Summit will bring together international activists to discuss environmental issues surrounding the rapidly expanding world of Liquefied Natural Gas (LNG) production, shipping, and use. Where is the best place to locate the LNG infrastructure? Do we need it? Can we get ahead of the power curve and set the agenda on these basic questions surrounding LNG? Case studies of successful opposition to badly planned LNG projects will be presented. Our goal is create virtual teams of activists to address all aspects of the LNG “supply chain,” from the gas field to the ultimate user on the other side of the world, for each proposed LNG project as it arises. The 1-day Global LNG Summit will precede the International Waterkeeper Alliance Annual Conference to be held June 2-4, 2004 in San Diego.
June 1, Morning:Global LNG Summit presentations from diverse international speakers will address: 1. Where does LNG come from? Gas production and liquefaction perspectives from Peru, Indonesia, Sakhalin (Russian Far East) and Australia. 2. What about the boats? LNG tankers - safety, fuel use, air emissions 3. Where does LNG go and who are the end users? LNG receiving terminals - safety, marine and air impacts, and reasons why so many LNG receiving terminals have been rejected in the U.S. and Mexico. 4. Do we need it? The case for renewable energy and energy conservation as alternatives to LNG.
June 1, Afternoon: Interactive breakout sessions will provide for in-depth discussion of LNG impacts at the source and receiving points of the LNG supply chain. This will be the opportunity for you to relate your experiences and learn from others facing the same challenge. The Global LNG Summit will conclude with a plenary forum on a possible joint declaration on LNG.
The Global LNG Summit registration fee is $25 (US) payable at the door by cash or check. Lunch is included. The registration fee will be waived for cases of financial hardship. Attendance is limited to 200 participants. Please RSVP by May 10, 2004 to Laura Silvan at laurie@... and to Anna Dorian at lngsummit@.... Information on lodging is available upon request.
Organizations involved: Amazon Watch Border Power Plant Working Group EPIC Global Green Grants Fund Greenpeace Grupo de Cien Pacific Environment ProPeninsula Vallejo CPR Waterkeeper Alliance Wildcoast
Tuesday, April 27, 2004 - A source in Boston, familiar with the
comings and go ings of liquid natural gas tankers, says the ship
arrivals have be come disruptive - and costly to taxpayers.
Although the source does not share the view of LNG opponents who
believe it is highly dangerous, he does say that each arrival of a
tanker represents "a huge expen diture of money and people."
The tankers arrive about every five days, he says.
The LNG terminal in which the ships dock is actually on the Mys tic
River in Everett, a Boston sub urb, but ships must traverse Bos ton
harbor to reach it. An LNG terminal currently is being pro posed for
Long Beach harbor.
Because of security concerns, my source says, each tanker arriv al in
Boston has become a virtual law-enforcement event. ''On land, there
are probably 40 police cars. On the water, there are probably six or
seven vessels. A floating se curity zone is set up around the
tanker."
Much of the harbor's traffic is curtailed during the arrivals, and the
nearby Tobin Bridge, a major artery, is closed to traffic heading into
Boston.
"Everybody knows when the ships come in," my source
says.
The law involved include the Boston police, state police, harbor
police, U.S. Coast Guard and envi ronmental officers.
It is not clear if the security is prompted by concerns of possible
terrorist attacks on ships or by al legations that terrorists have en
tered the United States via the vessels, or both.
He says that for a time, imme diately after the Sept. 11, 2001,
attack, no tankers came in. There was a second stoppage later on,
apparently during a high security alert.
Says the source, "There's talk of a new LNG port in Maine, in a
much more secluded area." How ever, some citizens in the vicinity
of Belfast, the area where the ter minal is proposed, are opposing the
plan.
Tom Hennessy's viewpoint appears
Sunday, Tuesday, Thursday and Friday. He can be reached at (562)
499-1270 or by e-mail at Scribe17@....
Hi all,
I have received requests from a couple of you about what the
eligibility is for getting on this list.
I am of the opinion that this is not a secret strategy list, but a
list for people around the country dealing with LNG expansion to
learn from each other, and what is going on in other parts of the
country. With luck this may help our individual battles, or bring
together some coalitions.
If real secret strategy needs to happen it should be between specific
people, not on a fairly public list such as this. Hopefully this
list will introduce you to some new folks, doing similar work, you
might want to strategize with. The golden rule here should be "Don't
give away your secrets, but do give your facts and opinions."
So it is hereby declared that this list is open to anyone who wants
to sign up, and learn/discuss about LNG issues. I will
monitor/approve the first couple of postings from people to make sure
they are not spammers, and I am merciless in restricting people who
get too far off subject or become inappropriate.
So if you know of others that would like to get these news postings
and discussion feel free to invite them to sign up.
You can either send me their emails and I will invite them, or they
can sign up themselves by sending a blank email to:
LNGsafety-subscribe@yahoogroups.com
Let me know if anyone has problems.
Thanks
Carl Weimer
SAFE Bellingham
>What are the requirements to get on this list? I have about 20 names of
>people who might be interested.
Given all the misinformation given out at the Federal level about LNG, the activity described in today’s LA Times attached below comes as no surprise. I have found that the State and Local governments take their charters to protect their citizens very seriously especially when the Feds “miss the boat.” After all, the locals usually end up being the first responders having to clean up the mess driven by less than properly informed Federal agencies (more on this later as I get caught up).
Oh by the way from where I stand, the CPUC was one of the first agencies to spot something was rotten in the Western power grid front during the debacle of 2000-2001. My impression is that it wasn’t until it became clear that the CPUC was going to “nuclear weapons” in response to extreme corporate malfeasance that FERC reluctantly capped power prices and really started serious investigation of the power and gas pipeline manipulation in the western grid. Go figure!
While I believe the West Coast could use at least 3 world scale LNG facilities (maybe 4 with the 4th a highly speculative economic risk), the LNG facilities mentioned in this article aren’t the needed sites. Blowing aside public concerns and open discussion about this very sensitive LNG infrastructure in not the way to get such equipment quickly sited or regain public confidence. http://www.latimes.com/news/local/la-me-lng28apr28,1,1361189.story
LOS ANGELES
State Seeks Rehearing on LNG Projects
By William Wan
Times Staff Writer
April 28, 2004
California officials wrangling with federal regulators over who has the power to approve the building of controversial energy terminals in the state are trying to force that fight into the courts.
In a petition filed with the Federal Energy Regulatory Commission, state officials said the agency erred when it gave itself sole authority over the construction of liquefied natural gas terminals. The petition, filed Friday, asked the commission for a rehearing.
If the rehearing is denied, that would clear the way for the state's Public Utilities Commission to sue FERC in federal court.
In addition, the PUC approved a measure last week that may give it a way to bring the issue before state courts.
For months, the fight between federal and state agencies has raged on paper, spawning reams of memos and procedural filings. The bickering paused last month, when FERC declared itself the sole authority over the siting and construction of LNG terminals, including a proposed facility in Long Beach.
"FERC's ruling was basically a power grab" for state gas operations, said PUC Commissioner and former president Loretta Lynch. By filing for a rehearing on the Long Beach proposal, PUC resumed the fight.
But PUC officials feared FERC would simply sit on their request for rehearing, Lynch said.
Such a move would prevent California officials from taking the issue before a federal court.
So, PUC members voted last week to force the company behind the Long Beach project to apply for a state permit. If the company — Sound Energy Solutions, a Mitsubishi subsidiary — refuses, PUC could sue for compliance in a state Superior Court.
Either way, the PUC wants the issue before a judge, Lynch said, noting several previous court cases led to rulings in her agency's favor on a variety of energy-related issues.
FERC officials responded Tuesday, saying their agency would seriously and quickly consider the PUC's request for a rehearing.
Four LNG plants exist in eastern and southern states. Companies have proposed three in California — in Long Beach, Humboldt Bay and off the Ventura coast.
Companies want to build more because the fuel cuts cost and increases capacity. When chilled at minus 260 degrees Fahrenheit, natural gas turns into liquid and shrinks to a fraction of its original size. Companies then can easily haul large quantities by ship.
But critics say the highly flammable liquid makes an LNG terminal at Long Beach a dangerous proposition. In January, an explosion at an Algerian LNG plant killed 27 people. Last month, safety concerns crushed plans for LNG terminals in Eureka, Calif., and Harpswell, Maine.
Since FERC's March 24 declaration of sole authority over LNG plants, several other groups have entered the brawl, laying their own claims to authority over the Long Beach project.
Agencies — regulating areas from fish and game to water quality — have filed petitions with the federal government, asking for a rehearing or clarification of FERC's ruling.
One of them, South Coast Air Quality Management District, recently filed a report, stating that the LNG plant in Long Beach could worsen pollution, adding 15 tons of microscopic particles to the air each year.
Sound Energy has fought its critics with a study of its own, releasing a poll this month that says a majority of Long Beach registered voters — 56% — want the LNG project.
But opponents, including environmental activists, raised doubts about the poll.
"This poll looks like what you would use to sell this project to the people of Long Beach," said Susan Jordan, director of the California Coastal Protection Network. "My interpretation of their numbers is that the majority of people in Long Beach simply don't know anything about this project."
Despite months of wrangling between government agencies, she said, ignorance among Californians about the project remained the biggest problem in the debate. "California should be in the driver's seat. It should be up to Californians if, where and when we have LNG plants."
If you want other stories on this topic, search the Archives at latimes.com/archives.
For decades, the LNG industry has maintained
secure operations around the world, including areas where terrorism is
a concern. As a result, secure operations were a priority in the
United States even before 9/11. However, since those attacks,
companies have worked closely with the U.S. government to review and
strengthen security. The result is an extensive system of safeguards
for protecting LNG facilities and ships from terrorists1:
* Oil and natural gas companies are
implementing new industry guidelines designed to enhance security at
all facilities, including LNG facilities. They are working closely
with government agencies, such as the Homeland Security Department, to
ensure LNG facilities and vessels are well protected.
* The Maritime Transportation Security Act of
2002 required all LNG ships and terminals to submit security
plans to the federal government before the end of 2003.
* Measures industry has taken to prevent
terrorism include improved inspections and patrols, action plans for
security breach, emergency communication systems, and intelligence
gathering. Companies tightly control access to facilities through
gated security and continuous surveillance monitoring. Personnel
receive identity and background checks. Supplies and equipment are
inspected before entering facilities.
* Many companies have contracted with
international experts to test their plans, procedures, people and
training.
* The U.S. Coast Guard carefully screens LNG
ships that enter U.S. waters and boards ships prior to entry into U.S.
waters if it deems the ship a security risk..
* Federal regulations authorize security zones
to safeguard vessels, harbors, ports, and waterfront facilities
against terrorism. These zones are determined on a case-by-case basis
as part of a facility security plan to minimize vulnerability. In
addition, regulations requiring safety zones around LNG facilities to
protect people and property from accidents also enhance security and
minimize the likelihood of a terrorist attack.
* LNG facilities are robustly
constructed to help avoid accidents. This also helps provide
protection against a terrorist attack.
* Because LNG is stored at atmospheric pressure, the major hazard is
fire, not an explosion. A major incident resulting in a large release
of LNG would most likely result in a fire. Emergency fire detection
and response would be used in such an event. Danger to the public
would be reduced or eliminated by the separation distance between the
facility/ship and surrounding community.
1Two publications produced in 2003
by the University of Houston Law Center's Institute for Energy, Law &
Enterprise provide most of the source material for this document. They
include: Introduction to LNG: an overview on liquefied natural gas
(LNG), its properties, the LNG industry, safety considerations and LNG
Safety and Security.
--
LNG FACILITY
SAFETY
LNG facilities have a good track record. Their safety is a product of
advanced technology, well-trained professionals, a thorough
understanding of LNG risks, virtually fail-safe safety systems and
procedures, and rigidly adhered to standards, codes and
regulations.1
Safety record
In the early years of the industry, isolated accidents at a few
onshore facilities occurred, which resulted in more stringent
operational and safety regulations. No death or serious accident
involving an LNG facility has occurred in the United States in 25
years.
U.S. LNG facilities
The United States has substantial experience operating and regulating
LNG facilities, including marine terminals for receiving imported LNG,
liquefaction facilities, and storage facilities. The four
marine terminals are located in Lake Charles, Louisiana, Everett,
Massachusetts, Elba Island, Georgia, and Cove Point, Maryland. Most
LNG facilities are in the Northeast. Approximately 55 local utilities
own and operate LNG plants as part of their natural gas distribution
networks. Stored LNG helps utilities meet peak demand during
particularly hot or cold weather. A facility in Alaska converts
natural gas into LNG for export.
Facility placement and construction
Federal Energy Regulatory Commission (FERC) regulations require safety
zones around LNG facilities. Setback distances must be great enough so
that flammable vapors will not reach facility property lines.
Sophisticated containment systems provide additional protection.
Recently designed tanks have double walls. In essence, such a tank
consists of a container within a container, with the outside wall able
to hold the entire contents of the inner container should it fail.
Single-wall tanks are surrounded by embankments to contain any leakage
in the unlikely event of tank failure. No incident has ever occurred
at any facility around the world requiring a secondary containment
system to hold liquid.
A crack or puncture of an LNG tank is unlikely. Tanks constructed of
nine-percent nickel steel have never had a crack failure in their
35-year history. LNG is not stored under pressure. Should a tank ever
fail and a leak result, fire is possible, but only if there is the
right concentration of LNG vapor in the air and a source of ignition.
Since such a combination rarely exists, explosions are highly
unlikely. According to FERC, "LNG is not explosive. Although a
large amount of energy is stored in LNG, it cannot be released rapidly
enough to cause the overpressures associated with an explosion."
FERC adds, "LNG vapors (methane) mixed with air are not explosive
in an unconfined environment."2
Design requirements set forth by the National Fire Protection
Association address the protection of facilities from earthquakes. No
LNG storage tank failures have occurred due to seismic activity. This
is true even in Japan, which relies on LNG to meet all of its natural
gas needs and is one of the most seismically active areas in the
world.
Safety systems and procedures
High-level alarms and multiple back-up safety systems, which include
emergency shutdown (ESD) systems, are core components of LNG
facilities. ESD systems can identify problems and shut down
operations, limiting the amount of LNG that could be released. They
are normally linked to automated gas, liquid, and fire detection
equipment. There are also detectors for monitoring LNG levels and
vapor pressures within storage tanks and closed-circuit television
equipment for monitoring all critical locations of LNG facilities.
Facility safety systems combine with special operating procedures,
training, and equipment maintenance to minimize risks of an
accident.
Government oversight and industry best practices
FERC is responsible for permitting new LNG onshore import and export
terminals and ensuring their safety through inspections and other
oversight. The U.S. Department of Transportation prescribes safety
standards concerning the location, design, installation, construction,
initial inspection, and testing of new onshore and offshore LNG
facilities.
The LNG industry follows additional codes, rules, regulations and
standards established by organizations such as the Society of
International Gas Tanker and Terminal Operators, the Gas Processors
Association, and the National Fire Protection Association.
------------------------------------------------------------------------
1Two publications produced in 2003 by the University
of Houston Law Center's Institute for Energy, Law & Enterprise
provide most of the source material for this document. They include:
Introduction to LNG: an overview on liquefied natural gas (LNG), its
properties, the LNG industry, safety considerations and LNG Safety and
Security.
Two liquefied natural gas deepwater port facilities are being
proposed off our Malibu, Oxnard, Ventura and Santa Barbara shores, and
many people are concerned about the financial liability for an LNG
disaster to our communities.
Unfortunately, the existing laws protect the foreign LNG vessel
owners and the corporate LNG deepwater port operators, rather than the
living and breathing American citizens who could potentially be
incinerated.
All LNG vessel owners are protected by the Limitation of Vessel
Owner's Liability Act, 46 U.S.C. 181, et seq.; and the owner's
liability is limited to the value of the vessel and value of its cargo
contents remaining after a calamity occurs.
The U.S. Supreme Court has long held that where a ship sinks
after a calamity, the sinking is the termination of the voyage and the
value of the vessel -- thus the limitation of the ship owner's
liability.
Ironically, the more damage that occurs to the vessel and its
cargo, the lower the liability for the vessel owner. This means that
an LNG tanker disaster resulting in the total loss of the vessel and
total loss of its cargo would result in minimal financial liability
for the LNG vessel owner -- even where the disaster incinerates an
entire coastal community -- killing 100,000 people, injuring 50,000
others and destroying billions of dollars of property and
infrastructure.
Shockingly, the vessel owner's financial liability in such a
scenario for all property damage would be absolutely zero, and for
loss of life and bodily injuries would be limited to just $420 per
vessel ton.
Protecting vessel owners was established by the act in 1851, and
our Supreme Court has long held that the owner's duty is essentially
satisfied when he properly equips the vessel and selects competent
crew to operate it, and neither the vessel, nor her owners are
responsible for damage or loss resulting from faults or errors in
navigation or in the management of the vessel.
All LNG deepwater port facility operators are protected by the
Deepwater Port Act's financial liability limitation of $350 million,
and the U.S. Coast Guard may even lower this amount.
Originally, this limitation was created for offshore oil ports
contemplating sufficient liability for an oil spill and cleanup costs.
Now, protecting operators processing and storing millions of gallons
of the ultrahazardous LNG, that upon release, could incinerate entire
communities -- the $350 million limitation is totally inadequate.
Losses from mounting wrongful death claims, serious burn victim
claims, medical costs, loss of earnings, destruction of homes, cars,
businesses, stores full of inventory, and community infrastructure
could run into the billions.
Destruction of Point Mugu or Port Hueneme and their contents
could run into the billions.
LNG proponents throughout America constantly hype LNG's alleged
safety record; and they proclaim their LNG facilities and LNG tankers
will operate and deliver safely -- without accident, human error, or
defect and will be impervious to natural calamity and terrorism.
They should pay the price for such claims, and be held strictly
liable for their ultrahazardous activities -- without any financial
limitations.
The current laws protect foreign interests and the very few
importers of LNG, while at the same time they expose American citizens
and local government facilities and infrastructure to devastation
without adequate recourse for recovery.
Next time you have breakfast with an LNG deepwater port applicant
-- there are approximately a half-dozen in America -- ask them to
stipulate to strict liability and waive the financial liability
limitations. Also, ask them to indemnify LNG vessel owners for all
damages caused by LNG vessels coming to or from their deepwater
ports.
Or, you can simply suggest they put their money where their mouth
is, and get out of town.
http://www.chicagotribune.com/business/chi-0404240338apr25,1,3016648.story?coll=chi-business-hed Advertisement
By Melita Marie Garza
Tribune staff reporter
April 25, 2004
Escalating energy costs--especially for natural gas--are causing U.S.
companies to close plants and move overseas.
The movement offshore is most acute in the chemicals industry because
it uses natural gas for heating, to generate electricity and also as a
primary raw material.
Natural gas prices have tripled since early 2002. The price has been
hovering around $6 per million British thermal units on the New York
Mercantile Exchange, and closed Friday at $5.57.
"The competitiveness that we once enjoyed is no longer there,"
said Greg Lebedev, the American Chemistry Council's president and
chief executive. "So rather than go out of business, our folks
are going to go away. They can leave. They are already global
companies," Lebedev said.
"Unless the natural gas situation--the other energy crisis, as it
is being called--is addressed, we are just going to have a continual
migration out of the country," he said.
Efforts to ease the supply crunch with imported liquefied natural gas,
known as LNG, have been ramped up. But new LNG terminals are at least
three years away from becoming operational.
"The chemical industry doesn't necessarily have
three
years--companies are making
investment decisions now," Lebedev said.
In the interim, companies are shuttering plants. Some recent examples
include Dow Chemical Co. and Flexsys America LP.
Dow has closed four plants in North America in the last two years,
while making major investments in five foreign countries.
What did Kuwait, Argentina, the Netherlands, Malaysia and Germany have
that the old plant locations in Texas, Louisiana and Alberta, Canada,
lacked?
"All of these countries have lower energy costs than the U.S.,"
said Bill Jewell, vice president, energy, for Dow
Chemical.
"These jobs did not leave the U.S. in search of cheaper labor or
to escape taxes," Jewell said. "These actions were taken to
get lower energy costs. U.S. labor is very competitive in our
industry."
The Dow closures resulted in the loss of about 400 plant jobs, part of
90,000 chemical industry jobs lost in the last five years, according
to the American Chemistry Council, a Washington, D.C.-based industry
group.
The offshore trend has a ripple effect.
"The real job loss for the U.S. was in the lack of capital
investment that came with building the new plants," Jewell said.
He said that amounted to about 10,000 good-paying jobs over a
four-year period.
"When Germany is a more competitive platform for production than
Louisiana, something is seriously out of whack," said Lebedev,
the American Chemistry Council's chief executive. "We are
effectively being uninvited to maintain our plants
here."
In contrast, European policymakers' decision to pursue North Sea oil
and gas production have made the continent more inviting for
businesses.
"Power in Germany is lower cost than the U.S. as it is heavily
based on coal. And natural gas is also cheaper than in the U.S. even
though it is supplied from Russia and shipped very long distances,"
said Dow's Jewell. "Gas is also supplied to Germany from
environmentally sound and publicly-accepted offshore production from
Norway."
So far, the impact of high natural gas prices has been minimal in
Illinois, the 6th-most-important state in terms of chemical industry
employment, with 54,800 employees. The average annual pay is $60,800,
36 percent higher than the state's average manufacturing wage and 53
percent higher than the state's overall wage for other
industries.
The Illinois chemical industry is less vulnerable to high natural gas
prices because generally it is less reliant on natural gas as a
primary raw material. But the state is a big producer of surfactants,
a primary ingredient used to make detergents, and natural gas heating
bills for surfactant plants have doubled to an average $4 million to
$6 million.
"There comes a point where your options are pretty limited in
cost cutting," said Mark Biel, executive director of the Chemical
Industry Council of Illinois.
"Are you going to continue to operate in Illinois or move
elsewhere in the world? Especially since Illinois is one of only two
states that taxes natural gas use by industrial facilities," Biel
said. "And as the industry's customers move production overseas
it will be easier for companies in Illinois and the rest of the
country to build plants abroad as well."
In the short-term, Illinois chemical manufacturers' location at a
major transportation hub helps keeps the industry viable particularly
as manufacturing continues to rebound, he said.
"In the long-term, over the next 10-15 years, if the cost of
natural gas continues to be high, you will see the gradual migration
of these facilities offshore," Biel said. Yet lower energy costs
do not guarantee that American plants will prosper.
The Flexsys America LP plant, in Nitro, W. Va., celebrated its 75th
anniversary last month, but is in the process of being fazed out as a
maker of chemicals found in everything from tennis balls to tires.
Clean-out and demolition of the plant is under way, and its 205
workers will lose their jobs. A Flexsys sister plant in Brussels, will
take over the manufacture of the chemicals.
While Flexsys' electricity costs in West Virginia were much lower than
at the Brussels plant, the European facility built a cogeneration
plant to provide its own heat and electricity. The plant then sold
excess electricity at a profit.
"They made significant money from the sale of electricity,"
said Jon McKinney, the West Virginia Flexsys plant manager. "They
turned what should have been a disadvantage to them into an
advantage."
McKinney says energy was the nail in the coffin for the Flexsys plant,
which also had to contend with demands to lower pricing by its main
customer, Goodyear Tire and Rubber Co.
"The biggest issue for us is the globalization of everything,"
McKinney said. "If you look at everything that is happening
across the chemical industry today, you are having to compete with
people in China and people in Eastern Europe.
"Goodyear is able to control the marketplace, and even though our
plant did exceptionally well in controlling costs, we couldn't
compete," McKinney said.
Some companies continue cost-cutting efforts, but do not plan to add
new plants in the U.S.
In the last two years Bayer Corp. has reduced manpower by almost 10
percent at its U.S. plants, without curtailing production.
"You don't give up plants very lightly, both from an economic
point of view and a social point of view," said Attila Molnar,
president and chief executive of Pittsburgh-based Bayer
Corp.
But Bayer has made no secret that its future plant investments will be
in Asia. The Bayer decision is in line with U.S. chemical makers,
which are increasing investments in emerging Asian and Latin American
markets.
At the same time, U.S. companies are striving to reduce their reliance
on natural gas.
For example, Dow decreased the amount of energy it uses by 20 percent
per unit of production between 1990 and 1995. By 2005, it hopes to cut
energy used per unit of production by another 20 percent, said Jewell
of Dow.
Dow is reducing energy use through more efficient power generation and
machinery, as well as simple things like turning off motors, lights
and computers not in use. The company also hedges gas purchases to
reduce the volatility in energy prices.
Still, Dow reported a $2.7 billion increase in its global energy costs
in 2003.
Jewell believes that liquefied natural gas could bring some price
relief. The U.S. has only four LNG receiving terminals. Some 30
projects have been announced, though only a handful are likely to
obtain financing and site approval.
In February Dow signed a contract with the Freeport LNG LP terminal in
Freeport, Texas, which is expected to start up in 2007.
Donald Felsinger, group president, Sempra Global Enterprises, whose
San Diego-based company has permits to build two LNG terminals, said
he believed that LNG, if developed in sufficient quantities, could
bring prices down by as much as $1 per million British thermal
units.
"The jury is still out on
what heavy industry will remain in the U.S. even with natural gas
prices at $3.50-to-$4.50 per million Btu," Felsinger said.
"Will that be a sufficient reduction to cause them to remain on
shore? That's a big question. We've already seen large segments of the
chemical industry move offshore. Those plants probably won't come
back."
HOUSTON, Apr. 23 -- LNG undoubtedly will play a pivotal role in
the coming years in bridging the ever-widening gap between natural gas
supply and demand in North America. Currently, dozens of industry
collaborative ventures are vying to be among the first to propose,
license, and construct LNG regasification facilities in the US and
Mexico that will take on future deliveries from the burgeoning global
LNG market.
But issues such as long development cycles for receiving terminals,
complex permitting requirements, environmental concerns, and the
public's misconception about LNG and its safety continue to impede
even the most fervent players' plans to capitalize on North America's
need to increase gas imports to meet rising demand, particularly in
the US Northeast and West Coast.
These were some of the trends outlined by industry panelists Tuesday
at the North American Gas Strategies Conference presented by
Calgary-based Ziff Energy Group in Houston. Panel members, each of
whom held a different stake in the developing North American LNG
market, did concur that only a fraction of the currently proposed LNG
receiving terminals in North American eventually would reach
completion.
Of the roughly 30 LNG import terminal projects now proposed for North
America, only about one third will be built, the panelists said. A
high prediction came from Jim Heavner, senior vice-president,
upstream, for Aliso Viejo, Calif.-based Fluor Corp., who estimated
that by the end of the decade, 10 LNG import terminals would reach
operational status.
Meanwhile, Rob Bryngelson, senior vice-president, Excelerate Energy
LLC, The Woodlands, Tex., reckoned that only six LNG terminals would
be constructed during that timeframe, distributed evenly among three
areas of the US¿two on the East Coast, two on the Gulf Coast, and
two in Baja California, Mexico, or off California.
LNG's new era
The North American gas supply gap is expected to grow "quickly
and significantly," said Robert Wilson, senior vice-president,
commercial, with Tractebel LNG North America LLC. Demand from
gas-fired electric power generation is estimated to increase
1.2%/year, which will be offset only slightly by a decrease in
industrial demand, he noted.
With North America's gas supply "flat to declining," the gas
market has already seen the doubling of demand prices from a long-run
average of about $2.50/MMbtu to a "new era level" of
$4-5/MMbtu, Wilson said. And even as large North American gas reserves
remain, "they are increasingly more expensive, less accessible,
and smaller" than in the past, he added.
In Wilson's view, LNG projects should, however, get a boost from
widespread vocal support from the US federal government and other
entities, including the US Federal Energy Regulatory Commission, the
US Department of Energy, Federal Reserve Bank Chairman Alan Greenspan,
and the National Petroleum Council.
Wilson noted that Standard & Poor's of New York reported that
there are sound reasons behind energy investors providing financial
backing for LNG projects. Sponsors for such projects typically have
strong balance sheets, he said.
Also, the physical infrastructure supporting LNG operations is not
subject to obsolescence, he said. "Basically the process that is
being used today is the same process that's been used over 30 years in
creating LNG and vaporizing [it]. I think the only real improvements
are the scale, and the efficiency of the component pieces,"
Wilson said.
Global LNG suppliers
In 2002, the global supply of 114 million tonnes of LNG was produced
in 71 LNG trains, Wilson said, adding that the average size of an LNG
train was 1.5 million tonnes/year (t/y). "That contrasts with the
3-5 million [t/y] trains that you've heard about and even larger
trains being proposed. Qatar has got a total of four, 7.8 million t/y
trains proposed," Wilson noted.
The three top suppliers of LNG in 2002 were Indonesia, Algeria, and
Malaysia. Collectively, these three producers account for about 56% of
the world's LNG during that year. During that year, Indonesia produced
28 million t/y of LNG from 14 trains; Algeria, 20 million t/y from 21
trains; and Malaysia 16 million t/y from 8 trains.
Wilson stated however that Qatar, now the fourth largest LNG producing
country, will be the "supplier to watch" in coming years.
Qatar has proposals in place for a total of 13 trains, which will
produce a total of 69 million t/y of LNG by 2009, he said.
"Interestingly, not all of that supply is destined for the US,"
he added.
Siting challenges
When it comes to siting LNG terminals, Excelerate's Bryngelson said
that "no place is a good place," mimicking the phrase
commonly vocalized by environmentalists as well as the general
public.
Bryngelson fears that the result of this mindset will be that,
"Facilities will continue to be located away from demand."
Also, since developers are having an easier time siting facilities
along the Gulf Coast, LNG supplies there will likely evolve into a
"gulf glut."
Bryngelson also said that regulators and politicians in the US listen
closely to the public with regard to siting issues. This might result
in LNG terminals ending up being built in the easiest areas to permit,
rather than in the best places to serve markets.
To meet public demand, industry has come up with several new concepts
for LNG facilities. For example, Excelerate is in the process of
constructing the world's first offshore LNG terminal in the Gulf of
Mexico, which is slated to come online by yearend with first gas
deliveries expected in January 2005, Bryngelson said.
Other concepts, explained Fluor's Heavner, include gravity-based
terminals, floating storage and regasification units, and salt cavern
storage.
An Alaska
Department of Revenue memo says proponents of a state- or municipally
owned North Slope natural gas project could be basing their pipeline
tariff estimates on faulty assumptions, missing the real cost of
service by more than $1 per thousand cubic feet.
A leading advocate of a publicly owned project strongly disputes the
memo's numbers.
But, if true, such a significantly higher tariff could seriously
damage the project's chances for success in the highly
price-competitive Pacific Rim market for liquefied natural gas.
The memo said the economic models used by advocates of a publicly
owned project could be seriously underestimating debt and
transportation costs and overestimating any tax benefits of public
ownership. The memo also questions several of the non-tariff
assumptions such as gas supply costs and reserves, market demand and
prices.
"There may ultimately be a role for LNG or public ownership in
commercializing North Slope gas," the memo said. "However, such a
project should be based on solid commercial principles." Tax
Division petroleum economist Roger Marks prepared the nine-page
analysis from research with financial consultants and using a tax and
tariff model he developed. (See sidebar on the memo with this
story.)
LNG advocate says memo 'flawed'
"I think there are many points that are flawed," said Fairbanks
North Star Borough Mayor Jim Whitaker, a board member of the Alaska
Gasline Port Authority. The authority wants to build and operate a
municipally owned pipeline and LNG project for commercializing the
more than 35 trillion cubic feet of stranded North Slope natural
gas.
The purpose of the late-March report is not to pronounce judgment on
either project - the Alaska Gasline Port Authority or the
state-owned Alaska Natural Gas Development Authority - said Steve
Porter, deputy commissioner at the Department of Revenue, who reviewed
the memo.
"The focus of that memo is to identify those areas that need further
research," he said in an April 8 interview. "We've got to make
sure we fine tune all these feasibility issues."
Porter told the state gas authority board of directors last fall that
the department would review the economic assumptions behind the
authority's business plan. The state authority, created by Alaska
voters in 2002, has based its plan on financial models promoted by the
municipal port authority and Yukon Pacific Corp., which in 2001 shut
down its 20-year effort to develop a privately owned Alaska LNG
project.
"These models conclude that the project is economic," Revenue's
memo said of the Yukon Pacific and port authority assumptions embraced
by the state gas authority. But, the memo advised, "Many critical
assumptions in the model are uncertain and should be
researched."
Memo lists items that need more study
"The memo provides information Š justification for items we ought
to study," said Harold Heinze, chief executive officer of the state
gas authority. The Legislature has appropriated a total of $1 million
for the authority to hire consultants to help answer questions as the
board puts together its development plan for a state-owned pipeline
and LNG project.
Rather than rely on North Slope producers to develop the companies'
preferred gas pipeline through Canada to serve North American markets,
supporters of public ownership say the state or municipalities should
take on the job.
The major North Slope producers have done their own financial analysis
of exporting Alaska LNG to U.S. West Coast or overseas markets and
determined the project is not commercially feasible. But proponents of
a publicly owned project say tax and financing savings could give
their proposal a competitive advantage in the marketplace.
However, the Department of Revenue memo said possibly faulty tax and
financing assumptions in the LNG supporters' models could mean they
are underestimating the pipeline tariff by up to $1.34 per mcf. Plus
the memo also questions the assumptions on tanker charges, saying the
additional cost of U.S.-built and U.S.-crewed tankers, as required by
the federal Jones Act, could add at least another 55 cents to the
tariff for serving the California market.
Higher tariffs could be a problem
Those numbers, if the Revenue memo is correct, could result in tariffs
to move Alaska LNG to California at almost double the amount estimated
by the municipal port authority or state gas authority.
Finding a market for at least 2 billion cubic feet of Alaska LNG also
could be a faulty assumption, the memo said. The U.S. West Coast
doesn't need that much gas, and it would be difficult for Alaska to
compete with less expensive LNG supplies closer to Far East markets.
The cost of an arctic pipeline also puts Alaska LNG at a disadvantage,
the memo said.
Those statements prompted a strong reaction from Whitaker. "It is
near ludicrous to suggest a market does not exist," the mayor
said.
But the memo's statements make sense to Larry Houle, general manager
of the Alaska Support Industry Alliance, who sent copies of the memo
to all of his directors. "It just sort of validates what I put
together in the past," said Houle, who opposed the 2002 voter
initiative that created the state gas authority.
Regardless of the serious questions raised by the memo, Houle
doesn't expect it will change many minds among supporters of a
publicly owned LNG project. "The true believers are so committed out
there," he said.
Port authority moving ahead with project
On the other side is Mayor Whitaker, who said the memo's statements
questioning the port authority's tax status and benefits are
"ill-informed and incorrect." The authority, created in 1999, is
comprised of the Fairbanks borough and the city of Valdez.
"We are well beyond memos in moving our project forward," the
mayor said. The authority is talking with potential buyers for its
gas, while it investigates financing options and looks for ways to buy
gas from North Slope producers.
A key part of both the port authority's plan and the state gas
authority's model is borrowing all of the billions of dollars needed
to build the pipe, liquefaction plant and terminal at Valdez and, for
the state authority, even the LNG tankers.
But that likely will be a problem, the memo said.
"It is difficult to find any similar, single-purpose commercial
endeavor that has been financed at 100 percent debt," the memo said.
"The reasons are clear. Š Equity is the shock absorber for
financial distress. Otherwise, if something goes wrong, the debt is at
risk. In addition, equity contributions make creditors comfortable
that project sponsors are serious.
"The more risky the project, the more debt holders want additional
equity in the project. Typically, LNG projects have 70 percent debt,"
the report said.
"This report highlights that projects like this are not 100 percent
financeable," Houle said.
--
State memo
questions assumptions of LNG project proponents
Larry
Persily
Petroleum News government affairs editor
An Alaska Department of Revenue memo released in late March reviewed
several assumptions underlying the feasibility models used by
proponents of a publicly owned North Slope natural gas pipeline
project.
Many of the issues are already on the Alaska Natural Gas Development
Authority's assignment list for consulting contracts, as the
authority works to put together its development plan for a state-owned
natural gas pipeline.
The memo raised several issues, not all of which would apply to every
proposed project development plan:
Market size and timing issues
With Shell, BP and Sempra Energy already committed to supplying the
U.S. West Coast with 1 billion cubic feet per day of Indonesian,
Australian and/or Russian LNG, the market has room for no more than an
additional 1 bcf/d, the memo said. For Alaska LNG to capture all of
that remaining market "would be challenging," considering that
supply competitors do not need to build an 800-mile arctic pipeline to
tidewater.
"Moreover, this market will grow incrementally, not all at once.
Getting the entire 1 bcf/d into the market at once will be
particularly difficult."
Taking Alaska LNG to Far East buyers also could be a problem, the memo
said, considering the distance and the reality of lower-cost, nearby
producers chasing the same customers.
The memo estimates the additional cost of phasing Alaska LNG into the
markets with a longer ramp-up period - six years instead of two
years - could add 48 cents per thousand cubic feet to the cost of
service, as the project developer would need a higher tariff to make
up for smaller returns in the early, low-volume years.
Supporters see the market differently, and believe they could sell
enough LNG without undue delays.
LNG market prices
LNG project supporters point to high prices the past couple of years
as a good indicator of where the market is headed. But, the memo said,
"if prices are high, they are high for everyone - they do nothing
for making the project more competitive, and in fact bring forth more
competition."
Price volatility is a constant worry, the memo said, especially for
Alaska projects that must compete with low-cost suppliers. "The
excess supply of potential LNG for Asia is already pushing prices down
to the cost of marginal supply. Indonesia recently made a 15-year deal
with China to supply LNG at $2.90."
Federal Jones Act a problem
The Jones Act requires the use of U.S.-built and U.S.-crewed ships for
moving goods between domestic ports. The memo, which recommended
further research into how the law applies to Alaska LNG shipments to
U.S. West Coast ports, said using U.S. ships instead of foreign
tankers to carry the gas from Valdez could add at least 55 cents per
mcf to the cost of delivering 2.2 bcf/d to California.
Project supporters have said perhaps Alaska could obtain a
congressional waiver from the Jones Act.
Memo questions 100% debt financing
Though advisers to the municipally owned Alaska Gasline Port Authority
and state gas authority have indicated either could obtain 100 percent
debt financing for a gas line project, the memo challenges that
assumption. "It is difficult to find any similar, single-purpose
commercial endeavor that has been financed at 100 percent debt."
Building the project with 30 percent equity and 70 percent debt is a
more likely assumption, the memo said.
And since equity investors demand a higher return than lenders -
since lenders get paid first and therefore equity investors take more
risk of not getting paid - the return on equity investment would add
an estimated 69 cents per mcf to the tariff, the memo said.
Cost of borrowing
The port authority and state gas authority have underestimated by 2
full percentage points the interest rate they would need to pay for
borrowed money to build the project, the memo said. "With no assets,
no collateral, borrowing by a public entity (not backed by the full
faith and credit of the state) of any amount will be difficult,
especially for the commercialization of an asset with so much price
volatility."
The higher-cost debt could add 29 cents per mcf to the tariff, the
memo estimated.
Tax-free debt
The state has been looking the past couple of years at perhaps issuing
tax-exempt bonds for a natural gas project through the Alaska Railroad
Corp., pointing to a provision in the federal law that transferred the
railroad to the state that allows for tax-exempt financing. However,
the provision does not explicitly allow for financing of non-railroad
projects, and the memo recommends that advocates of a publicly owned
LNG project research the issue further before counting on the
savings.
Tax-exempt bonds generally carry a lower interest rate than taxable
bonds. The higher cost of taxable bonds could add 21 cents per mcf to
the cost of an Alaska LNG project, the memo estimated.
Federal income tax status
Project supporters have relied on a 2000 letter from the Internal
Revenue Service, stating that the Alaska Gasline Port Authority would
be exempt from federal corporate income tax on its profits, but the
Department of Revenue memo questions that assumption.
The IRS based its ruling on statements that most of the gas would be
used in-state.
"However, it appears that given the rather limited opportunities for
in-state use of gas, most of the port authority's revenues would be
derived from the commercial sales of gas to either East Asia or the
West Coast," the memo said.
"This distinction may be very significant for the (IRS) ruling,"
and could jeopardize the port authority's reported tax-exempt
status, the memo said, estimating that federal taxes on equity
investment in an LNG project could add 15 cents per mcf to the tariff
(assuming the project is financed 30 percent with equity and 70
percent debt).
Are we surprised that a report commissioned by the developers of the
proposed liquefied natural gas terminal in Long Beach found
overwhelming support for the project among city residents surveyed?
Not really; if the results had come out the other way, they wouldn't
have been released.
Are we surprised that critics of the LNG terminal called the survey
results into question? Again, no.
We are surprised, though, that the developer refused to release the
contents of the survey when they were requested by a Press-Telegram
reporter. How else could a newspaper, and more importantly, the Long
Beach community, assess the credibility of the survey? The study is
important because it has the potential to help shape public and
political opinion about the LNG project.
Thomas Giles, the chief operating officer of Sound Energy Solutions,
the Mitsubishi subsidiary that is seeking to build the LNG terminal on
land owned by the Port of Long Beach, told the Press-Telegram's Eric
Johnson that the survey was internal, and therefore the details would
not be released to the press. Yet, the company did release the
results, in which 56 percent of respondents said they favored the
project, 26 percent opposed it, and 14 percent said they needed more
information.
Two critics of the LNG terminal, who were surveyed, said the questions
were biased and misleading. SES defended the study, citing the
credibility of the research firm, Santa Monica-based Fairbank, Maslin,
Maullin and Associates.
If the study is indeed credible and defensible, then why not show it
in its entirety? Partial disclosure of selected findings is no way to
approach any aspect of the controversial and important issues
surrounding the proposed LNG terminal.
CAMDEN (April 12): Here are some facts about the nature, shipping
and storage of LNG.
* Natural gas is composed primarily of methane (typically, at least 90
percent), but may also contain ethane, propane and heavier
hydrocarbons. Small quantities of nitrogen, oxygen, carbon dioxide,
sulfur compounds and water may also be found in "pipeline"
natural gas.
* The gas becomes LNG when it is liquefied for transporting by cooling
to a temperature of minus 260 degrees Fahrenheit, which reduces its
volume by 600 times. Though highly concentrated, it still weighs only
45 percent as much as water. Neither LNG nor its vapor can explode in
an unconfined environment, though it can burn dramatically. LNG is
different from compressed natural gas, which is used in some welding
processes, and liquid petroleum gas, which we know as propane, though
all are natural gas products.
* LNG is shipped in seamless pipelines and by large tankers that are
always of double-wall construction with extremely efficient insulation
between the walls. LNG must be maintained cold (at least below minus
117 F) to remain a liquid, independent of pressure.
* The insulation, as efficient as it is, will not keep the temperature
of LNG cold by itself. LNG is stored as a "boiling cryogen,"
or at its boiling point for the pressure it is being stored. Stored
LNG is analogous to boiling water, only 470 degrees colder. The
temperature of boiling water, 212 F, does not change, even with
increased heat, as it is cooled by evaporation (steam generation). In
much the same way, LNG will stay at near constant temperature if kept
at constant pressure. This phenomenon is called
"autorefrigeration."
* According to a fact sheet prepared by CH-IV International, an LNG
company, "before the storage of cryogenic liquids was fully
understood, there was a serious incident involving LNG in Cleveland,
Ohio in 1944. This incident virtually stopped all development of the
LNG industry for 20 years. The race to the moon led to a much better
understanding of cryogenics and cryogenic storage with the expanded
use of liquid hydrogen (minus 423 F) and liquid oxygen (minus 296 F).
LNG technology grew from NASA's advancement."
* In 1979 the director of the General Accounting Office told the U.S.
Senate, "We believe remote siting is the primary factor in
safety" for an LNG terminal. Despite that, New England's only
terminal is located in Everett, Mass., which is upriver from Boston
Harbor. Following 9/11, LNG shipments to Everett were stopped for a
month as a safety precaution. In his new book about terrorism,
"Against All Enemies," former counter-terrorism director
Richard Clarke said Algerian operatives entered the U.S. on LNG
tankers arriving in Boston. The FBI investigated the charge and issued
a denial. But safety from terrorism is a major argument of anti-LNG
activists.
Sources: CH-IV
International, Federal Energy Regulatory Commission, news
accounts.
Sempra
Energy yesterday added a third liquefied natural gas receiving
terminal to its plans, announcing that it hopes to build a $600
million LNG facility in Port Arthur, Texas.
Sempra said it has filed with the Federal Energy Regulatory Commission
for approval to build the new terminal on 3,000 acres it has owned for
15 years along the Port Arthur ship canal.
Darcel Hulse, president of Sempra Energy LNG, said the company's
experience in pursuing terminal projects for Baja California and
Louisiana had convinced it another terminal was viable.
"We feel (Port Arthur) would be an ideal spot to import LNG
because of the infrastructure," said Hulse, referring to natural
gas pipelines at the location.
Sempra, parent company of San Diego Gas & Electric Co., hopes to
win regulatory approval that would allow it to begin construction of
the Texas terminal by 2006 and complete it by 2009.
Sempra and other energy companies are scrambling to build LNG
facilities to fill what they predict will be a growing shortfall of
natural gas in North America in coming years.
The Natural Gas Supply Association reports that about 40 receiving
terminals have been proposed around the country, though far fewer are
expected to be built.
"I don't think anyone has the magic number for how many terminals
will be needed," said Mark Stultz, spokesman for the
association.
LNG is a condensed form of natural gas.
Through LNG technology, companies can extract natural gas from foreign
fields, cool it to a liquid state and transport the fuel aboard
specialized ships to receiving terminals in the United States. There
it can be regasified and moved through the nation's network of natural
gas pipelines.
The United States now receives about 1 percent of its natural gas from
LNG. Some experts project that North American production will fall and
that as much as 25 percent of the natural gas needed will have to be
imported within two decades.
LNG supporters note that natural gas burns more cleanly than coal or
oil and that LNG imports will be a key to keeping prices of natural
gas low. But proposals for LNG terminals have sparked opposition in
communities where they would be built. Residents fear the hazards of
the facilities that process the highly flammable fuel and say they are
targets for potential terrorism.
An explosion at an LNG plant in Algeria this year killed 30 people and
heightened those concerns.
Environmentalists say that LNG imports will continue U.S. dependence
on diminishing and increasingly expensive fossil fuels. They urge
conservation and development of renewable energy sources instead.
Donald Felsinger, group president of Sempra's non-utility businesses,
said Sempra had gained valuable experience in seeking permits for its
Cameron terminal in Louisiana, noting that it was the first LNG
project in more than 20 years to win approval in the United
States.
He said during the permitting process for the Port Arthur project,
Sempra will seek contracts with customers to move gas through the
planned facility.
Sempra says its LNG facility planned north of Ensenada in Baja
California has won all necessary approvals. The Mexican project is a
50-50 joint venture with Royal Dutch/Shell.
The company hopes to begin construction of that facility and the one
in Louisiana later this year and complete both projects by 2007.
BELFAST (April 21): Seven full-time fishermen from Harpswell who
came together to help defeat a proposed $350 million liquefied natural
gas (LNG) receiving terminal and regasification plant in their
community shared their experiences, their strategy and their advice
Sunday at a forum in Belfast sponsored by Friends of Sears
Island.
Along with the
recently formed SLNG (Stop LNG), the friends group is working to
defeat similar but at this point still nebulous proposals for Sears
Island, which has apparently become prime focus of LNG developers
since voters at Harpswell denied a lease March 9 to a consortium of
ConocoPhillips and TransCanada Pipelines Ltd. operating under the name
of Fairwinds.
The fishermen,
who were quick to agree fishermen are an unlikely group to agree on
anything, expressed deep satisfaction with the bonds that grew between
them and with the apparent final outcome of their efforts. But they
also cautioned those in the Midcoast area prepared to oppose LNG
development they shouldn't underestimate the considerable economic
forces and resources they'll have to take on, the frequently active
compliance of the state and even local officials with richly funded
corporate efforts and the sheer personal effort and sacrifice they
must be prepared to make.
Finally, they cautioned, those opposing LNG development will find the
promises made by "smiley-faced" industry representatives
will have a divisive effect in their communities, that the
polarization of groups that may already exist will be exploited by
these forces to their own ends and that new polarizations will be
created.
"Eight months ago I had no idea I'd be doing what I'm doing now,"
Jim Merryman, whose livingroom became a weekly gathering point for the
fishermen, told the approximately 80 people who attended Sunday's
presentation at the Troy Howard Middle School. "About all I knew
about LNG was one of those letters stood for 'gas.'"
Merryman said the battle to keep 1,000-foot LNG tankers with their
heavy security and zones of exclusion out of their fishing grounds
"raised a lot of quality of life issues and we liked life the way
it was."
He said the fishermen's effort in Harpswell against LNG development,
which was conducted in parallel but separate from a local citizens'
group, Fair Play for Harpswell, may or may not have application to
what people in the Midcoast are facing. "You can take from it
what you want," he said.
Even though it later turned out selectmen had been meeting months
earlier with Fairwinds representatives, even conducting inspection
tours of the municipally owned former U.S. Navy fuel depot where the
facility could be built, Tony Pierce said the proposal was sprung on
the general community with no advance notice.
When the proposition was announced Sept. 18, he said, "We'd never
heard of or met anyone. They called themselves Fairwinds," which,
he added, turned out to consist of "two multi-billion-dollar
energy companies."
"They presented us with a memorandum of understanding and three
months to the day after that we were going to have a vote. That was
way too fast, we had questions." Pierce described the Fairwinds
representatives as "nice smiley people, who had answers to the
first tier of questions, all rehearsed answers." But when
townspeople came to "the second-tier questions" when they
asked for pertinent and critical details of the plan, they were
stonewalled, he said. "'When are we going to find out?' is what
we asked them and the answer was 'after the vote.' It seems funny,
doesn't it? But it wasn't funny then."
When answers weren't forthcoming, they started doing their own
research. That's when they learned about security exclusion zones
around the big tankers and how they would be prevented from hauling
their gear and would have difficulty jumping through hoops to make
claims for lost and damaged gear.
Because LNG tankers contain so much stored up potential energy - a
typical load has the thermal equivalent of three-quarters of a million
tons of TNT or about 55 Hiroshima - type atom bombs - and because of
the heightened fear of a terrorist incident in the wake of the events
of 9/11, the Coast Guard is very serious about these exclusion zones,
Pierce said. "I believe the word was 'dismantle' anyone who
violated this zone. It's not anything we wanted to get involved
in."
Frustrating the fishermen's efforts to get answers and look out for
their traditional interests, Pierce said, was "our selectmen
didn't seem interested in our concerns. They wanted the money."
Fairwinds was offering a package of about $8 million annually to lease
the former fuel depot for up to 50 years and, he said, it was a
compelling offer for many in town.
Residents began receiving all sorts of literature from Fairwinds in
their mail promising a bright and prosper ous future for the town. It
was, Pierce said, "smiley talking heads telling us how it would
be." When the company ran into snags as some people pressed for
answers and guarantees and questioned the effect the development would
have on the safety and ultimate welfare of their town, the vote was
pushed back twice and then the company abruptly canceled negotiations,
he said.
"But we stayed together and raised money," Pierce related.
"What we saw was there was a big machine of power and influence
and money." The governor, who reportedly promised to stay out of
the issue, endorsed the project on the eve of the vote, a move the
fishermen regarded as a deep betrayal. They also heard ringing
endorsements from a former governor and from former selectmen
"saying it will be fine. We don't know what you're complaining
about."
"We went door-to-door because we realized we had to go
door-to-door," Pierce said. "We're not experts. We went out
and tried to get information ourselves. The companies didn't like
that." The selectmen, whom the fishermen initially thought were
on their side, "accused us of fear mongering and giving out false
information."
Pierce advised the gathering, "Find out as much information as
you possibly can before they do that. We were naive and we didn't do
that. Luckily, we were able to raise some steam quick."
Tom Allen said there was a lot of talk in town about "whining
fishermen." At first, he admits, it was "a pocketbook issue"
for many of them, faced as they were with tankers moving through fixed
gear and the effect a gas pipeline to be laid across the floor of the
bay to Yarmouth would have on lobster migration in one of Maine's
richest fishing grounds.
"Those two issues alone were enough to get us involved,"
Allen said, but then as the fishermen learned more about the
ramifications of an LNG development they realized everyone in town
wold be severely affected. He referred to a couple of gas storage
tanks "13 stories tall and about 300 feet across containing
highly, highly flammable gas."
"We said, wait, they want to do this in a residential
neighborhood. This is three-quarters of the way down a peninsula. My
kid goes to school at a primary school at the other end."
The group began asking Fairwinds about worst-case scenarios and they
were attacked for doing so. But, Allen said, "worst-case
scenarios are what we're going to take into account, what I've got to
work on. We're not going to take a chance the company is not going to
make a mistake."
Also, he went on, "Developments of this kind quickly become other
developments," changing a local way of life. Inevitably, the
fishermen's research showed, industrialization would follow and
increasingly undesirable environmental, public safety and aesthetic
considerations would escape local control. Allen referred to one such
example, how once an LNG facility was approved at Shreveport, Texas,
Dow Chemical Co. announced it would build a plant there. "We're
going to have our fate determined by bureaucrats in Washington,"
he said.
"If I were to sum up into a sound bite what to do," Allen
continued, "it's about a way of life. The number one issue people
voting against this said was the quality of life."
The advice from Fairwinds and their local allies was to trust what the
company promised. "They told us, wait, vote us in and then we'll
tell you what we're going to do," Allen said. "What did we
do to fight this? Darn near everything. If you can think of one we
didn't try I'll shake your hand."
That effort included starting a couple of websites. Also, "we
were media mavens. When something happened we were all over them like
stink on a skunk, we used the press as a forum to disseminate
information. Letters to the editor, op-ed pieces. Every event was
taped. Everybody in Harpswell gets the local community station,
Channel 14. We had call-in shows, programs with aerial shots of the
affected area. Interviews with dozens and dozens of people. HCTV
[Harpswell Community Television] was the battle ground. You just can't
underestimate the power of television, but it was a tough
job."
Dave Moody described how Fairwinds took advantage of the fact
Harpswell has two peninsulas whose respective inhabitants have
generally different concerns. The peninsula where 60 percent live
wouldn't have been as deeply affected. "Fairwinds thought they'd
use that to their advantage. I don't think it worked out quite that
way but it turned it into something that was not too friendly,"
he said.
"The gas company found fishermen to support them and they spent a
lot of money on propaganda but people seemed to rally around the idea
of if it's going to hurt the fishermen they didn't want it. There was
a media blitz from them. It was in credible. I hope it doesn't get as
nasty as it was for us. If you guys decide to fight it, keep in mind
it might get nasty," he said.
Chris Tucker noted how Harpswell voters at least had the opportunity
to vote and that this was not a privilege enjoyed by surrounding
communities, some of whose residents stood to suffer as much or even
more from an LNG development. "We told people in Harpswell when
you vote remember you're voting on behalf of three, four, five, six
other people who don't get a chance to vote on this."
The experience impressed upon Tucker that, "We could see where
the priorities of the state are. They're really with big business."
He said Chebeague Island fishermen faced a serious impact to their way
of life if a pipeline were laid across the bay floor, yet they had no
say in whether the development would arrive.
"In my mind," Tucker said, "this was unfair to the
neighboring towns." Referring to the significant amount of lease
money promised to his own town, he said, "We were going to get $8
million a year. They were going to get a boot up their caboose and
zero dollars."
Paul Hickey said, "What I wouldn't do if I were going to do it
again is under-estimate the commitment in time it took to fight this.
Also, we weren't prepared for how nasty it gets. I wouldn't have
believed it if I hadn't lived through it and some times I still can't
believe it. Money corrupts and Harpswell is the proof of it.
"We kept the high road but we were really dragged through the mud
over this," he said. "We tried to give the facts, stay
positive and not throw mud at anyone. I think that got us a lot of
respect."
In the end, Hickey said, Fairwinds "had all the money in the
world but they couldn't argue with the truth."
Since the attachment apparently didn’t get stored at this new site here is the email again with the CPUC announcement included. Again I commend the state for taking the higher ground to insure a proper procedure to protect their citizens.
California Public Utilities Commission 505 Van Ness Avenue, San Francisco, CA 94102 News Release California Public Utilities Commission 04/22/04 FOR IMMEDIATE RELEASE
Media Contact: Terrie Prosper – 415.703.1366 – news@...
PUC ORDERS SOUND ENERGY SOLUTIONS TO OBTAIN
STATE APPROVAL FOR LNG PROJECT;
SEEKS REHEARING OF FERC’S SOLE JURISDICTION RULING
SAN FRANCISCO, April 22, 2004 – The California Public Utilities Commission (PUC)
today opened an investigation into the proposal of Sound Energy Solutions (SES) to construct a
liquefied natural gas (LNG) facility in Long Beach and ordered SES to file an application for a
Certificate of Public Convenience and Necessity (CPCN) if it intends to pursue construction of
the project. The Commission also voted to seek rehearing of a ruling by the Federal Energy
Regulatory Commission (FERC) stating that FERC has sole jurisdiction over where an LNG
facility is located in California and the safety requirements each facility must have. The
Commission’s request for rehearing also challenges the FERC’s order, because FERC has no
basis for preempting the State’s environmental requirements with regard to the proposed LNG
facilities. In addition to the Commission, other state and local agencies have become concerned
about the extreme position that FERC has taken.
California is actively seeking new and diverse energy resources, among them, natural gas
supplies. The Commission recently opened a rulemaking (R.04-01-025) to pursue strategies for
development of natural gas resources in California. LNG is among the promising options the
Commission has identified for importing natural gas supplies. In California, several projects are
under consideration for various sites along the coast.
The proposed LNG project, as described by SES, would be an LNG storage and
regasification facility situated on 25 acres at the Port of Long Beach. LNG would be shipped to
California aboard ocean-going LNG carriers from gas-producing regions abroad. The LNG
would be stored and then either regasified for sale to natural gas customers in California or sold
as a liquid for use in LNG-powered vehicles in California.
California Public Utilities Commission 04/22/04 SES has applied to FERC for authority to construct the LNG facility. The Commission
has filed pleadings regarding SES’ proposal at FERC addressing jurisdictional and public policy
issues. The Commission is a “responsible agency” under the California Environmental Quality
Act, which implies certain obligations to protect the public. Significantly, the Commission has
the exclusive statutory duty over safety and siting of natural gas facilities in California.
Because SES would use the proposed LNG facilities to sell natural gas into California’s
natural gas markets, SES would be a public utility under California Public Utilities Code. As a
public utility, SES must apply for and receive a CPCN from the Commission prior to
commencement of construction of its proposed facility.
The investigation opened today formalizes the Commission’s statutory obligation to
oversee SES’ proposed project and its impact on California customers, residents, and businesses.
SES was informed of the Commission’s interest in the matter and jurisdiction over the
project in a letter dated Oct. 30, 2003. The letter advised SES that it would have to apply for and
receive a CPCN from the Commission in order to construct and operate its facility legally.
To date, SES has not applied for any authority from the PUC. In order to avoid delay of
PUC review of this project, the Commission will not wait for a final resolution of jurisdictional
questions SES has posed to FERC, choosing instead to conduct a review of relevant issues by
opening this investigation.
The Commission may ultimately support the project or some modified version of it
because it would provide some of the state’s near-certain need for future natural gas supplies.
But the Commission has a responsibility to assure that if the project is ultimately approved and
constructed, it does not unduly compromise public safety or the effective and efficient operation
of California energy markets.
The schedule in this proceeding will depend in part upon the date SES files its application
at this Commission.
For more information on the PUC, please visit www.cpuc.ca.gov.
Given FERC’s extreme position and their past track record to base LNG siting decisions on misinformation or less than complete info, today’s attached CPUC announcement comes as no surprise. Should be most interesting to uncover just how much information about the proposed Long Beach LNG facility will get out for public review and discussion.