Letter to Patrick H. Wood, Chair of the Federal Energy Regulatory Commission

September 15, 2004

The Honorable Patrick H. Wood
Chairman
Federal Energy Regulatory Commission
888 First Street, NE
Washington, D.C. 20426

Dear Chairman Wood:

I write to share with you my concern regarding the current process for approval of liquefied natural gas (LNG) marine terminals by the Federal Energy Regulatory Commission (FERC) and other federal agencies. In particular, I am concerned that the FERC may publish a Final Environmental Impact Statement (FEIS) for one or more LNG terminals in the Narragansett Bay area before the United States Coast Guard has issued a letter of recommendation certifying that all security issues have been fully addressed.

I recognize that there is no legal requirement that the FERC withhold approval of an LNG facility until the Coast Guard has acted, and that the Coast Guard will ultimately decide whether a facility can begin operating based on its authority under the Maritime Transportation Security Act (MTSA) and other federal maritime laws. It is troubling, however, that the FERC will likely complete the EIS processes on the Weaver's Cove and Keyspan projects-and the public's opportunity to comment will end-before the Coast Guard has completed an Incident Action Plan that will answer key questions regarding potential bridge closures and restrictions on commercial and recreational vessels along shipping routes. Moreover, it is my understanding that the Coast Guard and the developers will be hard pressed to finish even the Facility Security Assessments and Facility Security Plans required under the MTSA prior to FERC approval without some flexibility in FERC's anticipated EIS schedule.

I urge you to fully integrate the security and safety reviews of the Coast Guard with FERC's permitting process for the proposed LNG terminals in the Narragansett Bay area. You may also be aware that on September 14 the U.S. Senate approved my amendment to the fiscal year 2005 Homeland Security Appropriations bill to require the Department of Homeland Security (DHS) to provide a report to Congress on integrating the Coast Guard and FERC approval processes for LNG terminals. I urge you to work with DHS to explore every opportunity to coordinate the approval process with the Coast Guard so that the public can comment on proposed projects with a more thorough understanding of security protocols and the confidence that every security issue has been addressed.

Finally, I am concerned that the Coast Guard does not have adequate resources to complete the requisite safety and security reviews under FERC's approval timeline. In fact, in the long term there are serious questions about whether the Coast Guard and its state and local partners will have sufficient resources to manage the anticipated level of LNG vessel traffic associated with the proposed facilities. To what extent will FERC's approval process address federal, state and local costs related to securing LNG vessels and facilities, and will FERC's permit require the developers to contribute resources to the overall safety and security effort?

I appreciate your attention to this matter, and I will contact you this week to discuss these important issues.

Sincerely,

Jack Reed
United States Senator