Senator Reed's letter to KeySpan
Senator Reed's letter to KeySpan
January 31, 2005
Mr. William T. Orr
President
KeySpan LNG, LP
30 Kennedy Plaza
Providence , RI 02903
Dear Mr. Orr:
Thank you for the recent briefing and tour of KeySpan's liquefied natural gas (LNG) storage facility at Fields Point in Providence . I appreciated the opportunity to see the site firsthand, and I recognize the important role that KeySpan's peaking facility plays in meeting the energy demands of Rhode Island .
Regrettably, after much consideration and thorough consultation with federal, state, and local agencies, I cannot support KeySpan's proposal to develop an LNG marine receiving terminal at Fields Point. While I recognize that natural gas is an important and growing component of New England 's energy supply, I am extremely concerned about the safety and security risks associated with siting an LNG marine terminal in an urban community and requiring LNG tankers to pass by eleven Rhode Island towns and cities and more than 25 miles of densely populated coastline.
My colleagues and I have attempted to work with the Federal Energy Regulatory Commission (FERC) to identify safer ways to deliver LNG to our region. Unfortunately, at every turn, FERC has rejected our efforts. The Commission refused to consider a regional approach to LNG terminal siting, one that would step back and take a comprehensive look at all the options, including offshore terminals, remote facilities that are being built in Canada, and other sites in the northeastern United States that are not in the heart of densely populated urban communities.
Not only did FERC reject these considerations, the Commission even rejected our request to extend the public comment period on the Draft Environmental Impact Statement (EIS) for the KeySpan project, even though KeySpan did not object to the extension. Indeed, the 600-page document came out over the holidays, and the comment period closed on the day of a record -breaking snowstorm in New England .
FERC's approval process for LNG terminals is deeply flawed and leaves too many questions unanswered. We do not know exactly what impact the arrival and departure of fifty or more LNG tankers each year will have on recreational and commercial traffic on the Bay -- or whether any of our bridges will need to be closed during transits -- because the Coast Guard has not completed its safety and security reviews. I understand that the Coast Guard is working with KeySpan and with its state and local partners to complete those reviews, and I commend you and all the participants in the working groups for these ongoing efforts, but the Coast Guard has told my office repeatedly that it does not have the resources to adequately secure these LNG tankers and marine terminals while fulfilling its other post-911 responsibilities. This will require a whole new level of personnel and infrastructure, yet we have no cost estimate and no guarantee these new federal resources will be made available.
Similarly, a tremendous new burden will be placed on our state and local law enforcement and first responder agencies. I appreciate KeySpan's commitment in its recent filing before FERC to develop a mechanism to provide recovery of "direct transit-related costs" faced by federal, state and local agencies "on a per-transit basis." I disagree with your assumption, however, that other sources of funding will cover the bulk of additional costs associated with the security of the proposed KeySpan terminal. As stated above, the availability of new Coast Guard resources is very uncertain, particularly in the current federal budget climate. In addition, the federal grant programs KeySpan offers to help state and local agencies pursue are all facing dwindling resources, and at least one mentioned in your filing, the Urban Area Security Initiative , is not currently available to Rhode Island .
With all of these questions still unanswered, the public's opportunity to comment has now formally ended. FERC has informed my office that its staff is likely to go to print on the Final EIS sometime after February 15 th , in all likelihood prior to the completion of the Coast Guard's safety and security reviews. As you know, there is no public comment period on the Final EIS.
I am also concerned about the underlying safety standards for LNG facilities and the KeySpan proposal's compliance with those standards. The 1979 Pipeline Safety Act directs the Secretary of Transportation to consider the "need for remote siting" of LNG terminals, but the Department's safety regulations (49 CFR 193) fail to address this statutory requirement. Moreover, the National Fire Protection Association standards that DOT uses for LNG terminals (NFPA 59A) were written prior to September 11, 2001 and do not even mention a terrorist attack as one of the possible emergency scenarios. The DOT regulations and the NFPA standards do, however, require KeySpan and other LNG plant operators to have in place procedures that address an "uncontrollable emergency" and the "possible need for evacuation of the public in the vicinity of the LNG plant." What specific steps have been taken by KeySpan to comply with 49 CFR 193.2509(3), which calls for "coordinating with appropriate local officials in preparation of an emergency evacuation plan, which sets forth the steps required to protect the public in the event of an emergency, including catastrophic failure of an LNG storage tank."?
I am particularly concerned that KeySpan's facility, which has operated for 30 years under the grandfather provision of the Pipeline Safety Act of 1979, may be substantially modified to establish a marine terminal without bringing the plant up to current federal safety standards. Indeed, FERC's Draft EIS states that "the current proceeding provides the opportunity to re-evaluate the existing facility and to raise the level of safety to that required for new LNG facilities." I am disappointed that KeySpan's response to FERC argues that in virtually every area mentioned by the Commission, including Thermal Radiation Exclusion Zones, Vapor Dispersion Zones, Impoundment Capacity, Seismic Design Requirements, it would not be "practically or economically feasible" for KeySpan to comply with new construction standards.
I want to state again that I appreciate the important role KeySpan plays in Rhode Island 's energy infrastructure, and I look forward to continuing to look for alternative means to increase the supply of natural gas to our region. It is regrettable that the lingering questions about safety and security standards for LNG, as well as FERC's unwillingness to work with Rhode Island's congressional delegation on comprehensive, regional solutions to our natural gas supply challenges, have brought us to the point where I must oppose the proposed KeySpan marine terminal.
I look forward to working with you to explore other means, including offshore facilities, to bring more natural gas to our region while minimizing the risk to our citizens.
Thank you for your attention to this matter.
Sincerely,
Jack Reed
United States Senator
http://reed.senate.gov/LNG/LNGKeyspanLetter1-31-05.htm