The demand for liquefied natural gas (LNG) in the United States is rising rapidly, and the energy industry can demonstrate an operational record that is near perfect. Even so, the developments of mainland LNG import terminals are in most cases met with fierce local opposition due to safety concerns. This slows the growth of the importing, but does nothing to hamper the rise in demand for natural gas.
Liquefied natural gas is increasingly coming by the ship-load to the United States to meet a rapidly growing demand. Domestic production of gas and imports via pipelines from Canada is covering most of the current demand, but as energy consumption grows those sources cannot keep up. Price spikes and possible delivery shortages could be the result if nothing is done.
An LNG construction surge
Mark Robinson, director for the Office of Energy Projects at the US Federal Energy Regulatory Commission (FERC), knows the issues first hand. In fact, it is FERC that in the end gives the go-ahead to energy projects, such as a new LNG import terminal, on behalf of the US Government.
“We have four LNG terminals on the mainland, and an average of 1.7 billion cubic feet (60 million cubic metres) of gas per day is coming in to this country via LNG. A further five LNG projects are authorised and under construction. Together they will increase the potential import capacity substantially to above 10 billion cubic feet (330 million cubic metres) per day. Beyond that, six more LNG projects and three expansions have been approved, but they are not yet under construction. Yet another 12 projects, including two expansions, are under review right now. So it’s clear that LNG is going to take a much larger role in providing natural gas to this country,” says Mark Robinson.
Advocates instead of adversaries
Building substantial infrastructure, such as roads, energy plants or power lines, with its associated impact on the environment and possible disturbances to local residents, is difficult. FERC has therefore established a pre-filing process aimed at smoothing the process before the actual project is filed for approval with the Commission.
“We don’t want applications to come in that have a bunch of built-in objections, such as when a pipeline runs right through a wetland. If we can make sure that as many issues as possible are cleared beforehand, for example by simply moving a pipeline 500 yards (460 m), the filing process runs smoother and we save everyone time. We hope this builds advocates as opposed to adversaries,” says Mark Robinson.
Safety is number one
The energy industry works very closely with FERC when filing LNG projects. They have to meet stringent federal safety regulations and environmental impact requirements.
“We have only had one instance of turning down a project because we didn’t think it was safe enough. That was the Providence LNG project in Rhode Island,” says Mark Robinson.
The fact that only one LNG project has been turned down is exactly due to the pre-filing process. “Not only have we identified and mitigated a number of issues before the project is filed, but we have also addressed the number one issue, which is safety. Only when we have concluded that the sites can be run and operated safely do we move forward,” says Mark Robinson.
Turned down KeySpan in Rhode Island
KeySpan LNG, L.P. proposed a project for Providence, Rhode Island, that ultimately met with a thumbs-down from FERC. Patty Fairweather, Executive Counsel for the department of Environmental Management in Rhode Island, was advising the state government during that time.
“There was concern that industry was not interested in listening to legitimate concerns raised by public officials and the residents of Rhode Island. Similarly, there was a perception that Washington routinely approved applications without addressing legitimate safety and security concerns. Fortunately, we were in time able to convince FERC that siting a marine terminal facility in a densely populated area wasn’t safe and posed an unacceptable risk to life and property,” explains Patty Fairweather.
It’s not that the industry doesn’t care, she feels, but it appears that they fail to understand how important it is to approach stakeholders.
“Early in the process, perhaps even before application is made, the stakeholders must be approached on a grassroots level, like individuals with political aspirations might do to connect with their constituency before announcing their candidacy. The industry must be willing to invest the time and intellectual capital to get their message across. In the case of KeySpan they didn’t do the work that was necessary. They should have proactively embraced the message, simplified their communication and reached out to the stakeholders,” explains Patty Fairweather.
An acceptable risk
Had they made changes to satisfy safety and security concerns of stakeholders, and presented a compelling job and economic impact analysis, the outcome may have been different.
To provide an objective and reliable scientific basis for their decision, the state asked DNV to perform a consequence analysis for a worst case intentional gas leak for the existing KeySpan facility. Part of the Rhode Island State’s conclusion was that the local inhabitants’ proximity to the facility presented a level of risk. How much more of a risk if the facility was upgraded to accept marine deliveries of LNG, and whether that risk was acceptable, was debated heavily.
“It’s not that people aren’t willing to accept any kind of risk. We still work in tall buildings, drive cars and fly in planes. Yes, it’s true that LNG represents something unknown to many, and many respond emotionally to that. The best way to move forward with a project is to provide information in a format that is easily understood, accepted and supported by legitimate science, and that stakeholder arguments are given appropriate weight,” says Patty Fairweather.
No freeways
Back in Washington, Mark Robinson has many difficult pre-filings behind him and more to come. He feels that people’s attitude has worsened; “I have been siting infrastructure for 30 years, but now the attitude goes beyond even NIMBY (“Not in my backyard”). It’s almost to the point that people say ‘don’t even bother me or my life.’ There is no tolerance for any kind of disturbance from infrastructure developments. I’m afraid that if we were about to construct the interstate highway systems in the US in this negative climate, they would not have been built.”
Having said that, he immediately underlines again that safety is the number one issue, and that the regulations, standards and the industry itself continues to get better at raising the safety bar.
“I have had congressmen come into my office and ask me if I can guarantee that a project is 100% safe. The answer is of course no. All we can do is to continuously and vigorously work to improve the safety, and inform the public about the facts of LNG,” concludes Mark Robinson.