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Reed Introduces Legislation Limiting FERC's Authority in Approving LNG Terminals

By: Jack Reed
By: Jack Reed
Date: March 17, 2005
Issues: Energy


Reed Introduces Legislation Limiting FERC's Authority in Approving LNG Terminals

Thursday, March 17, 2005

Stating that the Federal Energy and Regulatory Commission's (FERC) process for approving Liquid Natural Gas (LNG) terminals "fails to properly balance the energy needs of the region with the safety of citizens," Senator Jack Reed (D-RI) today introduced legislation requiring the Federal Energy Regulatory Commission (FERC) to work with states to pursue a regional approach to approving LNG terminals, include the Coast Guard's safety and security concerns in FERC's final consideration and give states more authority in the permit approval process.

The legislation makes it clear that FERC has no authority to preempt a state's ability to issue a permit under federal or state law and requires the Coast Guard to issue regulations establishing thermal and vapor exclusion zones for vessels transporting LNG, based on existing DOT regulations for LNG terminals on land.

A report by the U.S. 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. Vessels serving the proposed KeySpan and Weaver's Cove LNG terminals would pass by twelve Rhode Island towns and cities and about 30 miles of populated coastline.

Reed stated, "The LNG terminal approval process is flawed. 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 included the Coast Guard's safety and security recommendations in its decision process."

In January Reed announced his opposition to LNG terminals in Providence and Fall River .

Reed's legislation requires:

• FERC to work with states and the Coast Guard to pursue a regional approach to LNG terminals, including a review of alternative sites and a determination of how many LNG terminals a region needs;

• FERC to delay issuing a Final Environmental Impact Statement (FEIS) 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;

• LNG developers 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;

• LNG developers to complete a facility security assessment and security plan before FERC issues a FEIS;

• FERC to consult with the state in which the facility is to be located.

• 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.

http://reed.senate.gov/LNG/LNGMeeting3-17-05.htm

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