Legislation Would Place New Limits on FERC's LNG Authority

Sen. Jack Reed (D-RI), who opposes two proposed liquefied natural gas (LNG) import terminals in New England, has introduced legislation that would give the states more power over the authorization of LNG terminals and would place significant new restrictions on the Federal Energy Regulatory Commission's (FERC) LNG authority.

The senator said the current process for approving LNG terminals "fails to properly balance the energy needs of the region with the safety of citizens." His bill would require FERC to work with states and the Coast Guard to pursue a regional approach to approving LNG terminals, including a review of alternative sites and a determination of how many LNG terminals a region needs. The legislation includes language that says FERC has no authority to preempt a state's ability to issue a permit under federal or state law.

It also would force FERC to delay issuing a final environmental impact statement (FEIS) on a proposed terminal until after the Coast Guard has completed its incident action plan, which provides a safety assessment regarding potential bridge closures and restrictions on commercial and recreational vessels along shipping routes. The legislation also requires FERC to incorporate the Coast Guard's recommendations, including all safety and security resource requirements, into the FEIS.

"The LNG terminal approval process is flawed," Reed said in a statement. "There is no regional approach to determine how many facilities a region needs and where they should be placed. Developers in the name of federal 'preemption' are challenging states' basic authority to approve permits for these facilities. And FERC has moved ahead with its process while the Coast Guard struggled to get its safety and security reviews completed. I am deeply troubled that FERC is not required to include the Coast Guard's safety and security recommendations in its decision process."

The legislation requires the Coast Guard to issue regulations establishing thermal and vapor exclusion zones for vessels transporting LNG, based on existing Department of Transportation regulations for LNG terminals on land. A recent report by the Department of Energy's Sandia National Laboratories found that an attack on an LNG tanker could produce a fire so hot it would cause second-degree burns and damage buildings a mile away. While thermal radiation and vapor exclusion zones exist for LNG terminals, they have not been established for LNG tankers.

Reed said vessels serving KeySpan's proposed Providence LNG import terminal in Rhode Island and Poten & Partners' proposed Weaver's Cove LNG terminal in Fall River, MA, would pass by 12 Rhode Island towns and cities and about 30 miles of populated coastline.

Reed's bill also would place new requirements on LNG terminal developers, requiring them to create a cost sharing plan describing how states and local agencies will be reimbursed for security and safety at the LNG terminal and along the shipping route. And it would require them to complete a facility security assessment and security plan before FERC issues an FEIS.

The bill also contains explicit language requiring FERC to comply with federal laws that may be enforced by states, including the National Historic Preservation Act, the Coastal Zone Management Act, the Clean Water Act and the Clean Air Act. (Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.