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#30 From: "Carl Weimer" <carlw@...>
Date: Tue May 4, 2004 7:30 pm
Subject: Thousands speak out against proposed LNG
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Thousands speak out against proposed LNG
DANIEL FOWLER , Herald News Staff Reporter      05/04/2004

http://www.heraldnews.com/site/news.cfm?newsid=11433652&BRD=1710&PAG=461&dept_id=99784&rfi=6


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.

Daniel Fowler may be reached at dfowler@....

#29 From: "Carl Weimer" <carlw@...>
Date: Mon May 3, 2004 4:24 pm
Subject: FERC to tour proposed LNG site
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FERC to tour proposed LNG site

DANIEL FOWLER , Herald News Staff Reporter      05/03/2004
http://www.heraldnews.com/site/news.cfm?newsid=11427416&BRD=1710&PAG=461&dept_id=99784&rfi=6

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.

Daniel Fowler may be reached at dfowler@....

#28 From: "Carl Weimer" <carlw@...>
Date: Mon May 3, 2004 4:16 pm
Subject: Louisiana Governor Endorses LNG Receiving Terminal
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May 03, 2004 10:59 AM US Eastern Timezone
Louisiana Governor Blanco Endorses Cheniere Energy Sabine Pass LNG Receiving Terminal
HOUSTON--(BUSINESS WIRE)--May 3, 2004--
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20040503005684&newsLang=en

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

#27 From: Carl Weimer <carlw@...>
Date: Mon May 3, 2004 6:31 am
Subject: U.S. Dependence on Imported Liquefied Natural Gas
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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
-- 

#26 From: Carl Weimer <carlw@...>
Date: Sun May 2, 2004 5:27 am
Subject: TransCanada eyes more sites for LNG terminal
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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.

-- 

#25 From: "Carl Weimer" <carlw@...>
Date: Fri Apr 30, 2004 8:40 pm
Subject: Union backing LNG plans
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Long Beach Press Telegram

Union backing LNG plans
Opponents cite safety concerns
http://www.presstelegram.com/Stories/0,1413,204~21474~2117739,00.html

By Eric Johnson
Staff writer


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.

"The longer it goes, the more it costs,' he said.


#24 From: "Carl Weimer" <carlw@...>
Date: Fri Apr 30, 2004 8:38 pm
Subject: New video makes case for new LNG vote in Harpswell
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New video makes case for new LNG vote in Harpswell
http://www.timesrecord.com/website/main.nsf/news.nsf/0/C0924AEC8012435005256E860060725D?Opendocument

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.

#23 From: "Carl Weimer" <carlw@...>
Date: Fri Apr 30, 2004 7:31 pm
Subject: LNG terminal moving to Stage 2
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British Columbia
Energy: LNG terminal moving to Stage 2
http://www.canada.com/search/story.html?id=9eb4080a-d1b8-45cb-a50b-e0da40f16cb4

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.

#22 From: "Carl Weimer" <carlw@...>
Date: Fri Apr 30, 2004 6:12 pm
Subject: Archives should now be available
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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

#21 From: Richard Kuprewicz <kup@...>
Date: Thu Apr 29, 2004 9:38 pm
Subject: Re: Inconsistent quality of natural gas raises safety concerns
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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?

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.


Yahoo! Groups Links



#20 From: "Carl Weimer" <carlw@...>
Date: Thu Apr 29, 2004 8:20 pm
Subject: Inconsistent quality of natural gas raises safety concerns
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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?

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.

#19 From: "Carl Weimer" <carlw@...>
Date: Thu Apr 29, 2004 7:00 pm
Subject: Government: Possible terrorist link to LNG stowaways
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This is reassuring!


4-29-2004
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
http://www.al.com/news/mobileregister/index.ssf?/base/news/1083231941233390.xml
Thursday, April 29, 2004

By BEN RAINES
Staff Reporter

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.

#18 From: "Carl Weimer" <carlw@...>
Date: Thu Apr 29, 2004 6:54 pm
Subject: Long Beach Debate Of LNG Heats Up
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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.

#17 From: "Vivian Newman" <newviv@...>
Date: Thu Apr 29, 2004 4:17 pm
Subject: Critic: LNG plant would hurt economy
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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."

#16 From: Carl Weimer <carlw@...>
Date: Thu Apr 29, 2004 6:01 am
Subject: FERC RULE RESTRICTING ACCESS TO ENERGY INFORMATION.
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BELOW IS THE SUMMARY OF THE FERC RULE RESTRICTING ACCESS TO MUCH ENERGY INFORMATION.

The whole document can be found at:
http://www.fas.org/sgp/news/2003/03/fr030303.html

Federal Register: March 3, 2003 (Volume 68, Number 41)
Rules and Regulations            
Page 9857-9873                     

=======================================================================

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 375 and 388

[Docket Nos. RM02-4-000, PL02-1-000; Order No. 630]

 
Critical Energy Infrastructure Information

February 21, 2003.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

-------------------------------------------------------------------

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.
-- 

#15 From: "Vivian Newman" <newviv@...>
Date: Wed Apr 28, 2004 9:59 pm
Subject: GLOBAL LNG SUMMIT
newviv@...
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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

************************
 

#14 From: "Carl Weimer" <carlw@...>
Date: Wed Apr 28, 2004 8:46 pm
Subject: LNG terminal a clog in Boston
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LNG terminal a clog in Boston
By Tom Hennessy
Staff columnist, Long Beach Press Telegram
http://www.presstelegram.com/Stories/0,1413,204~23168~,00.html

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@....

#13 From: "Carl Weimer" <carlw@...>
Date: Wed Apr 28, 2004 7:10 pm
Subject: What should the eligibility requirements be for this list?
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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.

#12 From: Richard Kuprewicz <kup@...>
Date: Wed Apr 28, 2004 3:01 pm
Subject: No Surprise Here!
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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.

Article licensing and reprint options



Copyright 2004 Los Angeles Times

#11 From: Carl Weimer <carlw@...>
Date: Tue Apr 27, 2004 3:36 am
Subject: Industry's side of the story
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From the Center for Liquefied Natural Gas
http://www.lngfacts.org/facilities/ship_security.html

LNG FACILITY & SHIP SECURITY
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.

2FERC website, http://www.ferc.gov/industries/gas/indus-act/lng-safety.asp.

#10 From: "Carl Weimer" <carlw@...>
Date: Mon Apr 26, 2004 10:26 pm
Subject: (No subject)
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April 25, 2004
Ventura County Star
Liability for LNG vessels is limited
By Tim Riley
 
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.
 
-- Tim Riley, of Oxnard Shores, is a consumer protection advocate and personal injury attorney. He hosts TimRileyLaw.com, a Web site on the risks and danger of liquefied natural gas.
 
Copyright 2004, Ventura County Star. All Rights Reserved.

#9 From: Carl Weimer <carlw@...>
Date: Mon Apr 26, 2004 1:10 am
Subject: Energy costs an offshore factor
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Energy costs an offshore factor
Chemical firms flee for fuel relief
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."


-- 

#8 From: Carl Weimer <carlw@...>
Date: Sat Apr 24, 2004 10:27 pm
Subject: Only fraction of proposed LNG terminals will be built in North America
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Ziff: Only fraction of proposed LNG terminals will be built in North America
 
Steven Poruban
Senior Staff Writer

http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=GenIn&ARTICLE_ID=203439

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.

Contact Steven Poruban at Stevenp@....
-- 

#7 From: Carl Weimer <carlw@...>
Date: Sat Apr 24, 2004 10:23 pm
Subject: Alaska LNG may be too costly
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Alaska LNG may be too costly
http://www.petroleumnews.com/pnnew/510863908.html

Larry Persily

Petroleum News Government Affairs Editor


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).

#6 From: "Carl Weimer" <carlw@...>
Date: Fri Apr 23, 2004 3:57 pm
Subject: Long Beach LNG Survey questioned
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About that LNG survey

Developers should release contents, not just results.
http://www.presstelegram.com/Stories/0,1413,204~21479~2101652,00.html

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.

#5 From: Carl Weimer <carlw@...>
Date: Fri Apr 23, 2004 5:57 am
Subject: Learning about LNG
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Learning about LNG
ByJay Davis


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.
This story was printed from
http://rockland.VillageSoup.com/Business/Story.cfm?storyID=21882
-- 

#4 From: Carl Weimer <carlw@...>
Date: Fri Apr 23, 2004 5:53 am
Subject: Sempra seeks to build LNG plant in Texas
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Sempra seeks to build LNG plant in Texas
http://www.signonsandiego.com/news/business/20040422-9999-1b22sempra.html

By Craig D. Rose 
UNION-TRIBUNE STAFF WRITER

April 22, 2004

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.



------------------------------------------------------------------------

 Craig Rose: (619) 293-1814;
craig.rose@...
-- 

#3 From: Carl Weimer <carlw@...>
Date: Fri Apr 23, 2004 5:40 am
Subject: Harpswell fishermen discuss their fight against LNG
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The Waldo Independent

Harpswell fishermen discuss their fight against LNG
ByPeter Taber

http://belfast.villagesoup.com/Government/Story.cfm?StoryID=22101

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."
-- 

#2 From: Richard Kuprewicz <kup@...>
Date: Fri Apr 23, 2004 1:08 am
Subject: Attachment imbedded
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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.


#1 From: Richard Kuprewicz <kup@...>
Date: Fri Apr 23, 2004 12:05 am
Subject: Not A Surprise
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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.

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