LNG Forum Abstracts & Presentations
PANEL SESSION 1: LNG: What is it, Where Does it Come From, and Why We Need it
PANEL SESSION 2: Risk Management
PANEL SESSION 3: Federal Safety and Security Requirements
PANEL SESSION 4: Siting and Environmental Review Processes
Abstracts
TOPIC: LNG Facts - A Primer
ORGANIZATION: LSU Center for Energy Studies
SPEAKER: Kristi A. R. Darby
This presentation will review the components of the natural gas industry, provide background information on liquefied natural gas (LNG) and highlight its significance, and identify LNG importers and facilities, both domestically and globally.
The natural gas industry is composed of producers, pipeline companies, and distribution companies. Natural gas is used by residential, commercial, and industrial consumers for various functions, including power generation and the production of household goods. LNG is natural gas that is turned into a liquid by cooling it. This process, liquefaction, reduces its volume more than 600 times, making LNG an economical way to transport natural gas.
Natural gas reserves are found worldwide, but often in areas such as Russia, where demand is low and supplies are plentiful. These countries produce the gas and liquefy it into LNG. The LNG is shipped to a country with high demand for natural gas, such as the United States, where it is regasified at a receiving terminal. The total investment required for all components within the LNG value chain (production, liquefaction, shipping, and receiving) can reach over $3 billion.
The last several years have seen dramatic changes in both the volatility and absolute level of natural gas prices in the U.S. Traditional supply response that has historically followed large price increases was substantially lacking, as producers are at the limits of production capabilities. LNG allows the U.S. to bridge the gap between dwindling U.S. natural gas supply and increasing consumption. Only 2% of U.S. natural gas needs are met with LNG imports. Asia imports the majority of its natural gas in the form of LNG and many European countries import 20% or more of their natural gas as LNG. The U.S. currently operates four onshore LNG import terminals and one offshore terminal in the Gulf of Mexico.
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TOPIC: U.S. Energy Supply & Demand
ORGANIZATION: Energy Information Administration (EIA), U.S. Department of Energy
SPEAKER: Phyllis Martin
EIA's "Natural Gas Outlook" focuses on its long-term projections of the natural gas market and the expected role of LNG under reference case assumptions. EIA's reference case includes projections of natural gas consumption, sources of supply, and prices through 2030. By 2030 consumption of natural gas is expected to increase by 20 percent, compared to the level in 2004. Domestic gas production is expected to increase more slowly than consumption over the forecast, and the U.S. will need additional imports. The entire increase in U.S. imports is expected to come from LNG, facilitated by expansion at existing terminals and construction of new facilities. For the New England states, most natural gas supply comes from domestic sources in the Southwest and Appalachian areas of the country. However, Canadian and LNG supplies contribute to the region's supply mix and this is expected to continue. LNG is an important part of the New England region's overall gas supply and is a critical component of natural gas supply during periods of peak consumption, accounting for as much as 29 percent of regional gas deliveries. EIA expects that LNG will be the marginal source of natural gas supply through 2030, under reference case assumptions.
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TOPIC: Economic Impacts - Risks and Rewards
ORGANIZATION: University of Texas at Austin, Center for Energy Economics
SPEAKER: Michelle Michot Foss, PhD
This presentation follows prior speakers who have set the stage for understanding basic facts about liquefied natural gas (LNG); the trends in supply and demand for energy generally, and for natural gas (and LNG) in particular; energy fuel price trends in recent years; and the outlook for increasing LNG imports to the United States in the future. It focuses on the economics of LNG as part of the nation's energy markets, starting with some basic information about the natural gas supply chain and the players in the natural gas industry.
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TOPIC: Managing Risk
ORGANIZATION: Sandia National Laboratory
SPEAKER: Anay Luketa-Hanlin
The increasing demand for natural gas in the U.S. could significantly increase the number and frequency of marine LNG (Liquefied Natural Gas) imports. While many studies have been conducted to assess the consequences and risks of potential LNG spills, the increasing importance of LNG imports suggests that consistent methods and approaches be identified and implemented to help ensure protection of public safety and property from a potential LNG spill.
While standard procedures and techniques exist for the analysis of the potential hazards from an LNG spill over land, no equivalent set of standards currently exists for LNG spills over water. This is due in part to the lack of large-scale data of LNG spills onto water, as well as the much more complicated physical and dispersion phenomena that occur when a very cold liquid such as LNG is spilled onto water. For that reason, the U.S. Department of Energy (DOE), Office of Fossil Energy, requested that Sandia National Laboratories (Sandia) develop guidance on a risk-based analysis approach to assess and quantify potential threats to an LNG ship, the potential hazards and consequences of a large spill from an LNG ship, and review prevention and mitigation strategies that could be implemented to help reduce the possibility and risks of an LNG spill over water.
To support this effort, Sandia worked with the U.S. DOE, the U.S. Coast Guard, LNG industry and ship management agencies, LNG shipping consultants, and government intelligence agencies to collect background information on ship and LNG cargo tank designs, accident and threat scenarios, and standard LNG ship safety and risk management operations. The overall role of the report is to provide guidance to communities and agencies dealing with the marine import of LNG on the general safety, security, and hazard issues associated with a potential LNG spill over water, and where to focus risk prevention and mitigation efforts to enhance the protection of people and property. An overview of those analyses and recommendations will be presented.
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TOPIC: Waterway Suitability Analysis and Operations
ORGANIZATION: U.S. Coast Guard
SPEAKER: TBA
This discussion will deal primarily with the Waterways Suitability Assessment (WSA) process detailed in the Coast Guard's Navigation & Vessel Inspection Circular 05-05 "Guidance on Assessing the Suitability of a Waterway for Liquified Natural Gas," in support of the Letter of Recommendation required for new shore-side LNG terminals. FERC is the lead Federal agency for reviewing/permitting shore-side facilities but rely on Coast Guard input in developing public safety portions of their EIS. The Coast Guard process utilizes the Guidance from the Sandia Report providing "guidance on risk analysis and safety implications of a large LNG spill over water." A discussion of the role of the local Coast Guard in completing the WSA, including engaging with local port stakeholders, identifying needed security resources, and existing/generic security programs in place for overall maritime transportation/port security. Discussion of general risk mitigation and security measures such as escorts, positive control boardings and security zones will be covered in this session.
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TOPIC: Prevention, Mitigation, and Response
ORGANIZATION: NASFM
SPEAKER: William Kramer, Jr. and David Butler
In 2002, the National Association of State Fire Marshals (NASFM) joined with the US Department of Transportation's Office of Pipeline Safety to help ensure that the individuals charged with responding to pipeline incidents (local firefighters) are properly trained and informed. Among the benefits of this training and education, the local fire service will be positioned to take a leadership role in further educating other government officials and the communities they serve as to what industry and government are doing to make pipelines safer.
This project has extended beyond the original focus on hazardous liquid and natural gas pipelines to encompass other vital and exposed components of the energy and pipeline infrastructure. One such component is liquefied natural gas (LNG). The safe handling of LNG is not well understood by many outside of the industry and parts of government and already has been the subject of controversy in several regions.
The program goal is to educate and otherwise prepare the fire service to take a leadership role in educating other local, county and state officials and the surrounding communities about LNG safety issues. The fire service in the states where LNG terminals exist or are proposed must become a resource to other officials and civilians in understanding LNG safety. This program does not intend to tell fire safety officials what to think about LNG terminals. Rather, it will equip them to understand how to evaluate the hazards of LNG terminals and tankers in the unique circumstances of their own communities.
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TOPIC: LNG Vessels
ORGANIZATION: U.S. Coast Guard
SPEAKER: TBA
This presentation will describe the basic design features of LNG carriers including MOSS, membrane containment systems and the historical safety record. What are the International requirements that carriers must comply with such as International Gas Carrier Code (see excerpt from web http://www.imo.org/Environment/mainframe.asp?topic_id=995); how does the US participate in development of rules and in enforcement of rules. It will describe the 96 hour advance notice of arrival requirements; what is reported, to whom and what is done with the information. It will discuss the USCG Port State Control program, including boarding program, Certificate of Compliance, and cargo monitoring programs, also discussion of manning and training requirements.
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TOPIC: Onshore LNG Terminals
ORGANIZATION: Pipeline and Hazardous Materials Safety Administration (PHMSA) in the U.S. Department of Transportation (DOT) and the Federal Energy Regulatory Commission
SPEAKER: Frank Licari and Chris Zerby
Three federal agencies address safety and security concerns at onshore liquefied natural gas (LNG) terminals: DOT's Pipeline and Hazardous Materials Safety Administration (PHMSA), the Federal Energy Regulatory Commission (FERC), and DHS's United States Coast Guard (USCG).
PHMSA prepares and enforces LNG safety regulations that govern these terminals under 49 Code of Federal Regulations (CFR) Part 193. Using these safety regulations, FERC then ensures LNG terminals are designed and constructed in a manner that does not jeopardize public safety or the environment. In conjunction with these efforts, the USCG performs Waterway Suitability Assessments and Marine Design reviews that prevent transportation, security, and unloading hazards. All three agencies routinely conduct operational inspections of a terminal after it is commissioned. As participating agencies for the safety and security review of LNG import/export terminals, PHMSA, FERC, and USCG jointly confirm terminals:
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comply with all federal safety requirements,
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are operating safely, and
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do not harm the environment.
PHMSA's regulations in Part 193 prescribe performance based, safety standards that govern LNG terminal design, construction, operation, maintenance, personnel qualifications and training, fire protection, and security. These regulations incorporate by reference the 2001 edition of National Fire Protection Association (NFPA) 59A in selective areas. Requirements for investigating and reporting safety related conditions and incidents are also delineated in this rulemaking.
When operators submit applications for LNG terminals, FERC verifies they are designed and constructed in accordance with Part 193, by conducting rigorous safety reviews of their project proposals. These safety reviews include FERC's Reliability, Safety, Operability, and Cryogenic Design evaluations of all terminal systems as well as USCG's marine safety reviews. Their findings are then incorporated into each project's Environmental Impact Statement (EIS) to inform stakeholders about adverse and beneficial impacts of the proposed project and its alternatives, and to recommend safeguards and mitigation measures.
Once these terminals begin operating, PHMSA, FERC, and USCG jointly inspect LNG onshore terminals and vessels - each focusing on its area of expertise. PHMSA examines operations and maintenance procedures and inspects protective systems and safety devices for their functionality annually. FERC inspects the effectiveness of the terminal's design vs. its operation, and confirms that all mitigation measures appropriately address safety and environmental concerns, identified in the project's EIS. USCG's inspections ensure that marine unloading/loading areas, operations, and vessels continue to comply with 33 CFR and 46 CFR requirements.
Collectively over the past 25 years, these three regulatory agencies and the LNG industry have demonstrated that LNG terminals have an excellent record of protecting the public and the environment within the United States.
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TOPIC: Offshore LNG Terminals
ORGANIZATION: U.S. Coast Guard
SPEAKER: TBA
This presentation will describe the various proposed technologies; the buoy or Submerged Turret Loading system (STL), Gravity Based Structures (GBS), Floating Storage and Regasification Units (FSRU), fixed platform and salt dome storage system. While in some ways unique, the technology is generally using or combining the use of systems that have been proven, either on land or for different products or evolutions. It will discuss the flexibility allowed in the law and the mechanism that would be used for conducting plan review and oversight, use of NVIC 03-05 and involvement of classification societies or certifying entities and role of Coast Guard in ongoing inspections. Brief discussions will be had regarding the inherent safety that comes with siting a facility a considerable distance offshore, the risk and consequence analysis work, and the reduction of vessel traffic in busy ports. Establishment of safety zones, requirements for operations and security manuals.
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TOPIC: Onshore LNG Terminals
ORGANIZATION: Federal Energy Regulatory Commission
SPEAKER: Lauren H. O'Donnell and Chris M. Zerby
The presentation by will focus on the role of the FERC in the siting process for onshore LNG facilities - starting with a description of the work the prospective project sponsors must complete prior to starting the pre-filing process, moving through the pre-filing process and the initiation of environmental review, and concluding with the review of an application that leads up to a decision by the Commission.
The Commission's pre-filing process involves starting the environmental review required by the National Environmental Policy Act prior to the sponsor's filing of an application with the FERC. While this process has been available to project sponsors since 2001 on a voluntary basis, the Energy Policy Act of 2005 made the pre-filing process mandatory for LNG projects. By 2004, the majority of major projects, including LNG projects, were using the process and the benefits to all stakeholders were well known.
During the pre-filing process the project sponsor is required to provide certain information that will allow the Commission staff to determine the readiness of a project to proceed with the NEPA review. The goal of the pre-filing process is to allow for maximum public involvement in the review of the project and to ensure that the project is designed such that the issues raised are identified and resolved to the extent possible. The result is that the project sponsor is in a position to file an application with the Commission that has been publicly vetted and is ripe for consideration.
The public participates in the pre-filing process through participation in meetings and providing written comments. Nearly all the material produced during the process is available for public review on the FERC's website and in public libraries located in the project area. Some material that is sensitive for resource protection or security reasons is available only by specific request based on a need to know.
Many federal and state agencies also provide input to the review of the proposal. The agencies that frequently participate as Cooperating Agencies are those that have permitting responsibilities under federal law or those with special expertise regarding aspects of a proposal, such as the U.S. Coast Guard, the U.S. Army Corps of Engineers, the Environmental Protection Agency, the U.S. Fish and Wildlife Service, NOAA Fisheries, and some state agencies with overarching permitting responsibilities.
One of the key areas covered in the Commission's NEPA review of an LNG import terminal is the cryogenic design and safety review. The environmental document presents the staff's exclusion zone calculations to determine compliance with the federal standards and a summary of the engineering findings based on the staff cryogenic design review. The staff analyzes engineering material and safety systems during the design phase, during construction and during operation. Inspections of the terminals will start during construction and continue for the life of the facility.
Once the application is complete and ready for processing, the Commission staff completes its NEPA review and issues its findings in the form of an Environmental Assessment (EA) or an Environmental Impact Statement (EIS). The document is subject to public review and comment, and comments are addressed by the staff before the findings are forwarded to the Commission. The EA or EIS, with the comments and responses, form a part of basis for the Commission decision on whether to authorize the project.
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TOPIC: Offshore LNG Terminals
ORGANIZATION: MARAD and U.S. Coast Guard
SPEAKER: TBA
MARAD
The Deepwater Port Act of 1974, as amended (DWPA, 33 U.S.C. 1501 et seq.) in 1984, 1996, and 2002, establishes a licensing system for ownership, construction and operation of liquefied natural gas (LNG) deepwater port (DWP) structures located seaward of the U.S. territorial waters. The DWPA authorizes the Secretary of Transportation, and by designation, the Maritime Administration (MARAD) in concert with the U.S. Coast Guard (USCG) to prepare a Record of Decision (ROD) for each application, and issue a license for the creation, operation, maintenance, and decommissioning of DWP.
MARAD and USCG process license applications in consultation with appropriate federal and state agencies, arrange public meetings in adjacent coastal states, and issue a ROD and License considering all inputs. The DWPA establishes a specific time frame of 356 days from receipt of a complete application for approval or denial of an application. The MARAD and USCG, in cooperation with other federal agencies, must comply with the requirements of the National Environmental Policy Act (NEPA, 42 U.S.C. 4332) within that time frame.
A decision for approval or denial of the application is primarily based upon the conditions set forth in the DWPA. The conditions that applicants must meet include financial responsibility, compliance with relevant laws and regulations, consistency with national interest and security, energy, and environmental policy goals, minimization of adverse impact on the marine environment, without interfering navigational safety. The DWPA also sets out detailed procedures for the issuance of licenses including submission of detailed plans for construction, operation and decommissioning of DWP, and prohibits the issuance of a license without the approval of the Governors of the adjacent coastal states. States must also demonstrate compliance with the Coastal Zone Management Act.
The public is informed of the entire process through publications in the Federal Register, as well as the posting of all public documents on the Department of Transportation's Docket Management System. The NEPA process, as well as other Federal statutes (e.g., the Coastal Zone Management Act) also provides for public participation.
In the post license phase, the DWPA also requires that a licensee comply with applicable Federal and Sate laws to obtaining various technical and environmental permits relative to the construction and operation of a DWP. Per ROD requirement, MARAD/USCG and applicants are working closely with National Oceanic and Atmospheric Administration (NOAA) Fisheries and National Academies of Sciences to develop environmental monitoring plan to assess, minimize, and mitigate impacts to marine environment.
USCG
This presentation will start with a brief discussion of the history of the Deepwater Port Act and changes that added natural gas to the law. What is a deepwater port? Discussion of the application review process in accordance with the DWPA and Coast Guard Regulation, including the following: meeting NEPA and producing a single EIS for all Federal permitting; extensive collaboration with multiple Federal agencies and the broad MOU developed; hiring/use of an environmental consultant; the role of the State and Governor's "veto"; the opportunities for public involvement/input; and the statutory timeline.
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TOPIC: State Siting Considerations
ORGANIZATION: Texas Railroad Commission
SPEAKER: Leslie Savage
This presentation provides an overview of Texas's permitting and environmental review process for liquefied natural gas (LNG) terminals. The presentation highlights the key areas of coordination among the federal, state and local review processes for both onshore and offshore facilities.
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