Order Code RL32205
CRS Report for Congress
Received through the CRS Web
Liquefied Natural Gas (LNG)
Import Terminals:
Siting, Safety and Regulation
Updated May 27, 2004
Paul W. Parfomak
Specialist in Science and Technology
Resources, Science, and Industry Division
Aaron M. Flynn
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress

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Liquefied Natural Gas (LNG) Import Terminals:
Siting, Safety and Regulation
Summary
Liquefied natural gas (LNG) is a hazardous fuel frequently shipped in large
tankers to U.S. ports from overseas. While LNG has historically made up a small
part of U.S. natural gas supplies, rising gas prices, current price volatility, and the
possibility of domestic shortages are sharply increasing LNG demand. To meet this
demand, energy companies have proposed building dozens of new LNG import
terminals throughout the coastal United States. But many of these terminals would
be built onshore near populated areas, so local communities fear the terminals would
expose them to unacceptable safety and security hazards. Potentially catastrophic
pool fires or vapor cloud fires could arise from a serious accident or attack on LNG
infrastructure. Faced with the widely perceived need for greater LNG imports, and
persistent public concerns about LNG safety, Congress is examining the adequacy
of safety provisions in federal LNG siting regulation.
The Federal Energy Regulatory Commission (FERC) grants federal approval for
the siting of new onshore LNG facilities under the Natural Gas Act of 1938. This
approval process incorporates minimum safety standards for LNG established by the
Department of Transportation, which, in turn, incorporate siting standards set by the
National Fire Protection Association (NFPA). Although LNG has had a record of
relative safety for the last 40 years, and no LNG tanker or land-based facility has
been attacked by terrorists, experts have questioned the adequacy of key LNG siting
regulations related to safety zones, marine hazards, hazard modeling, and remote
siting. Experts have also questioned the validity of LNG hazard studies used by
federal regulatory agencies which suggest that LNG terminal risks, while significant,
are not as serious as is popularly believed.
Congress may not see a compelling need to change current federal LNG siting
requirements if it views the current regulations and processes as sufficient. Holders
of this view would continue to rely on the judgment of LNG experts in federal
agencies and standards committees to appropriately balance local public safety with
national energy needs. On the other hand, Congress may conclude that some aspects
of new LNG terminals do pose excessive public risks, or that there is still too much
uncertainty about key risks to make final conclusions about public safety. In this
case, Congress has several options to further address LNG terminal safety concerns.
These options include 1) banning onshore LNG terminals, 2) redefining federal and
local siting authority, 3) imposing more stringent federal LNG safety standards, 4)
encouraging more LNG research, 5) curbing U.S. natural gas demand, and 6)
developing alternatives to natural gas imports. Each of these policy alternatives has
significant limitations, however, and may have undesirable consequences for national
energy markets and other hazardous material infrastructure.
This report will be updated as events warrant.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Issues Facing Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Scope and Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
What Is LNG and Where Does It Come From? . . . . . . . . . . . . . . . . . . . . . . . 2
Expectations for U.S. LNG Import Growth . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Proposed LNG Import Terminals in the United States . . . . . . . . . . . . . . . . . 3
Safety Hazards from LNG Terminals
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Physical Hazards of LNG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Pool Fires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Other Safety Hazards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Terrorism Hazards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Safety Record of LNG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Safety Regulations in Onshore LNG Siting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Department of Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Federal Energy Regulatory Commission (FERC) . . . . . . . . . . . . . . . . . . . . . 8
FERC-DOT Jurisdictional Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
National Fire Protection Association (NFPA) . . . . . . . . . . . . . . . . . . . . . . . 10
State Regulatory Roles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal-State Jurisdictional Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 12
Recent Safety Issues in LNG Terminal Siting . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Safety Exclusion Zones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
NFPA Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
FERC Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Marine Safety Hazards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Remote Siting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
LNG Hazard Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Hazards vs. Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
LNG Terminal Safety in Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Other Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Terror Attractiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Civil and Criminal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Policy Options for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Banning Onshore LNG Terminals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Redefining Federal and Local Siting Authorities . . . . . . . . . . . . . . . . . 22
Setting More Stringent Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Encouraging More Safety Research . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Reducing LNG Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Appendix: Offshore LNG Terminal Regulation
. . . . . . . . . . . . . . . . . . . . . . . . 26

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List of Tables
Table 1. Recently Proposed U.S. LNG Import Terminals . . . . . . . . . . . . . . . . . . . 4
Table 2. Recent LNG Hazard Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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Liquefied Natural Gas (LNG) Terminals:
Siting, Safety and Regulation
Introduction
Liquefied natural gas (LNG) has long played a role in U.S. energy markets, but
concerns about rising natural gas prices, current price volatility, and the possibility
of domestic shortages are sharply increasing demand for LNG imports. To meet this
demand, dozens of new onshore and offshore LNG import terminals have been
proposed in coastal regions throughout the United States. But LNG is a hazardous1
liquid transported and stored in enormous quantities, often near populated areas.
Concerns exist about the safety hazards of new LNG import terminals and the federal
government’s role in addressing LNG safety in the terminal siting process. In
addition, various energy policy proposals could impact the need for new LNG
terminals by encouraging the development of alternative U.S. energy supplies and
promoting conservation.
This report provides an overview of recent industry proposals for new LNG
import terminals. The report summarizes LNG safety hazards and the industry’s
safety record. It summarizes federal laws and regulations related to LNG terminal
siting with a focus on the authorities of key federal agencies and safety provisions in
the permitting of onshore facilities. The report discusses controversial safety issues
in recent LNG siting proceedings, such as safety zones, marine hazards, hazard
modeling, and remote siting. The report outlines policy options related to LNG
terminal safety, including 1) banning onshore terminals, 2) redefining federal and
local siting authority, 3) imposing more stringent standards, 4) encouraging more
LNG research, 5) curbing gas demand, and 6) developing alternatives to natural gas
imports.
Issues Facing Congress
Proposed LNG terminals will directly impact the safety of communities in a
number of states and Congressional districts, and they are likely to influence energy
costs nationwide. Faced with the widely perceived national need for greater LNG
imports, and persistent public concerns about LNG hazards, some in Congress are
examining the adequacy of safety provisions in federal LNG siting regulation. If
Congress concludes that new LNG terminals as currently regulated will pose an
unacceptable risk to public safety, Congress may consider additional LNG safety-
related legislation, or may exercise its oversight authority in other ways to influence
1 49 C.F.R. § 172.101. List of Hazardous Materials. Office of Hazardous Materials Safety,
Department of Transportation.

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CRS-2
LNG terminal siting approval. Alternatively, Congress may consider other changes
in U.S. energy policy legislation to reduce the nation’s demand for natural gas.
Scope and Limitations
This report focuses on industry and federal activities related to safety in LNG
import terminal siting. For a broader discussion of LNG import policy, see CRS
Report RL32386, Liquefied Natural Gas (LNG) in U.S. Energy Policy: Issues and
Implications, by Paul W. Parfomak. The report also focuses on the potential impacts
on communities and populations near an LNG terminal, rather than employee safety
and general security issues. For a comprehensive discussion of LNG security, see
CRS Report RL32073, Liquefied Natural Gas (LNG) Infrastructure Security:
Background and Issues for Congress, by Paul W. Parfomak. This report also deals
primarily with those parts of LNG terminals which transfer, store and process LNG
prior to injection to natural gas pipelines for transmission off site. For more
discussion of general natural gas or pipeline hazards, see CRS Report RL31990,
Pipeline Security: An Overview of Federal Activities and Current Policy Issues, by
Paul W. Parfomak. Last, this report discusses mostly onshore facilities and near-
shore shipping, since they pose the greatest public hazards. Offshore LNG terminal
siting regulations are summarized in the Appendix.
Background
What Is LNG and Where Does It Come From?
When natural gas is cooled to temperatures below minus 260° F it condenses
into liquefied natural gas, or LNG. As a liquid, natural gas occupies only 1/600th the
volume of its gaseous state, so it is stored more effectively in a limited space and is
more readily transported. A single tanker ship, for example, can carry huge
quantities of LNG — enough to supply the daily energy needs of over 10 million
homes. When LNG is warmed it “regasifies” and can be used for the same purposes
as conventional natural gas such as heating, cooking, and power generation.
In 2003, LNG imports to the United States originated primarily in Trinidad
(77%), Algeria (10%), and Nigeria (9%). Some shipments also came from Qatar,

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CRS-3
Oman, and other countries.2 Malaysia, Brunei, Australia, Indonesia, and the United
Arab Emirates also export LNG, and may be significant U.S. suppliers in the future.
In addition to importing LNG to the lower 48 states, the United States exports
Alaskan LNG to Japan.
Expectations for U.S. LNG Import Growth
The United States has used LNG commercially since the 1940s, but LNG
imports have until recently been small because low domestic natural gas prices made
imports uncompetitive. In 2002, for example, LNG imports accounted for only 1%
of total U.S. gas consumption. Among several countries with limited domestic gas
reserves, however, LNG imports are substantial. Japan, for one, imports 97% of its
natural gas supply as LNG — several times as much LNG as the United States.
South Korea, France, Spain, and Taiwan are also large LNG importers.
Natural gas demand has accelerated in the U.S. over the last several years due
to environmental concerns about other energy sources, widespread building of natural
gas-fired electricity generation, and low natural gas prices through the 1980s and
1990s. Domestic gas supplies have not kept up with this demand, however, so prices
have recently become high and volatile. At the same time, international prices for
LNG have fallen substantially because of increased supplies and lower production
and transportation costs, making LNG more competitive with domestic natural gas.
In 2003 testimony before Congress, the Federal Reserve Chairman called for a
sharp increase in LNG imports to help avert a potential barrier to the U.S. economic
recovery. According to the Chairman’s testimony: “... high gas prices projected in the
American distant futures market have made us a potential very large importer...
Access to world natural gas supplies will require a major expansion of LNG terminal
import capacity.”3 If current natural gas trends continue, industry analysts predict
that LNG imports could account for 12% to 20% of U.S. gas supplies by 2025.4
Proposed LNG Import Terminals in the United States
LNG tankers unload their cargo at dedicated marine terminals which store and
regasify the LNG for distribution to domestic markets. Onshore terminals consist of
docks, LNG handling equipment, storage tanks, and interconnections to regional gas
transmission pipelines and electric power plants. Offshore terminals regasify and
pump the LNG directly into offshore natural gas pipelines or may store LNG in
undersea salt caverns for later injection into offshore pipelines.
There are five active onshore LNG import terminals in the United States at
Everett, Massachusetts; Lake Charles, Louisiana; Cove Point, Maryland; Elba Island,
2 Jowdy, M. “U.S. LNG Import Levels Double in 2003.” Oil Daily. Jan. 15, 2004. p5.
3 Greenspan, A., Chairman, U.S. Federal Reserve Board. “Natural Gas Supply and Demand
Issues.” Testimony before the House Energy and Commerce Committee. June 10, 2003.
4 For a comparison of major forecasts, see Energy Information Administration (EIA). Annual
Energy Outlook 2004. DOE/EIA-0383(2004). Table 31. Jan. 2004. p112.

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Georgia; and Peñuelas, Puerto Rico. (There is also one export terminal in Kenai,
Alaska.) In addition to these active terminals, developers have been proposing
numerous new LNG import terminals in the coastal United States. Table 1 lists
summary information for recent LNG terminal proposals. As Table 1 shows, many
proposed LNG terminals would be located offshore, in part to avoid community
opposition and siting obstacles which have delayed or prevented the construction of
new on-shore LNG terminal facilities.5 Additional terminals to serve U.S. markets
have also been proposed in the Bahamas, Mexico, and Canada.
Table 1. Recently Proposed U.S. LNG Import Terminals
Location
Name
Developer(s)
Type
Permit Status
Everett, MA
Distrigas
Tractebel
Onshore
Operating
Lake Charles, LA
Lake Charles
CMS Energy
Onshore
Operating
Elba Island, GA
Savannah
El Paso
Onshore
Operating
Cove Point, MD
Cove Point
Dominion
Onshore
Operating
Peñuelas, PR*
Peñuelas
EcoElectrica
Onshore
Operating
Hackberry, LA
Cameron LNG
Sempra
Onshore
Approved 8/03
Gulf of Mex., LA
Port Pelican
ChevronTexaco
Offshore
Approved 11/03
Gulf of Mex., LA
Energy Bridge
Excelerate
Offshore
Approved 1/04
Freeport, TX
Freeport
Cheniere
Onshore
Applied 2003
Sabine Pass, TX
Golden Pass
Exxon Mobil
Onshore
Applied 1/03
Fall River, MA
Weaver’s Cove
Poten & Partners
Onshore
Applied 12/03
Corp. Christi, TX
Corpus Christi
Cheniere
Onshore
Applied 12/03
Sabine Pass, LA
Sabine Pass
Cheniere
Onshore
Applied 12/03
Oxnard, CA
Platform Grace
Crystal / Chevron
Offshore
Applied 1/04
Long Beach, CA
Long Beach
Mitsubishi
Onshore
Applied 1/04
Oxnard, CA
Cabrillo Port
BHP Billiton
Offshore
Applied 1/04
Gulf of Mex., LA
Gulf Landing
Shell
Offshore
Applied 1/04
Gulf of Mex., LA
Main Pass
McMoran
Offshore
Applied 2/04
Mobile, AL
Compass Port
ConocoPhillips
Offshore
Applied 3/04
Providence, RI
Fields Point
KeySpan
Onshore
Applied 5/04
Ingleside, TX
Vista Del Sol
Exxon Mobil
Onshore
Applying 2004
Gulf of Mex., LA
Vermillion 179
HNG Stor./ CGI
Offshore
Feasibility study
Ingleside, TX
Corpus Christi
Occidental.
Onshore
Feasibility study
Logan Twp., NJ
Crown Landing
BP
Onshore
Feasibility study
Belmar, NJ
Energy Bridge
Excelerate
Offshore
Feasibility study
Cherry Point, WA
Cherry Point
Cherry Pt. Energy
Onshore
Feasibility study
Port Arthur, TX
Port Arthur
Sempra
Onshore
Feasibility study
Brownsville, TX
Brownsville
Cheniere Energy
Onshore
Feasibility study
Sears Island, ME
Sears Island
Not disclosed
Onshore
Feasibility study
Southern Maine
TBD
TCPL
Onshore
Identifying site
Mobile, AL
Mobile Bay
Exxon Mobil
Onshore
Suspended
5 Zeus Development Corp. “Six New Offshore Terminal Designs May Expedite LNG
Deliveries.” Latin Petroleum Analytics. Houston, TX. June 11, 2003.

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Mobile, AL
Pinto Island
Cheniere Energy
Onshore
Suspended
Somerset, MA
Somerset
Somerset LNG
Onshore
Suspended
Eureka, CA
Humboldt Bay
Calpine
Onshore
Cancelled
Vallejo, CA
Mare Island
Bechtel / Shell
Onshore
Cancelled
Tampa, FL
Tampa Bay
BP
Onshore
Cancelled
Gulf of Mex., LA
Liberty
HNG Stor./ CGI
Offshore
Cancelled
Harpswell, ME
Fairwinds
Conoco / TCPL
Onshore
Cancelled
Radio Island, NC
Radio Island
El Paso
Onshore
Cancelled
*Terminal supplies dedicated to a gas-fired electric power plant.
Source: Trade press; company websites.
Safety Hazards from LNG Terminals
The safety hazards associated with LNG terminals have been debated for
decades. A 1944 accident at one of the nation’s first LNG facilities which killed 128
people initiated public fears about LNG hazards which persist today.6 Technology
improvements and standards since the 1940's have made LNG facilities much safer,
but serious hazards remain since LNG is inherently volatile and is usually shipped
and stored in large quantities. The January 2004 accident at Algeria’s Skikda LNG
terminal which killed or injured over 100 workers has added to the current
controversy over LNG facility safety.7
Physical Hazards of LNG
Natural gas is combustible, so an uncontrolled release of LNG poses a hazard
of fire or, in confined spaces, explosion. LNG also poses hazards because it is so
cold. The likelihood and severity of catastrophic LNG events have been the subject
of controversy. While questions remain about the credible impacts of specific LNG
hazards, there appears to be consensus as to what the most serious hazards are.
Pool Fires. If LNG spills near an ignition source, the evaporating gas in a
combustible gas-air concentration will burn above the LNG pool.8 The resulting
“pool fire” would spread as the LNG pool expanded away from its source and
continued evaporating. A pool fire is intense, burning far more hotly and rapidly than
oil or gasoline fires.9 It cannot be extinguished — all the LNG must be consumed
before it goes out. Because an LNG pool fire is so hot, its thermal radiation may
injure people and damage property a considerable distance from the fire itself. Many
6 Bureau of Mines (BOM). Report on the Investigation of the Fire at the Liquefaction,
Storage, and Regasification Plant of the East Ohio Gas Co., Cleveland, Ohio, October 20,
1944. February, 1946.
7 Junnola, Jill et al. “Fatal Explosion Rocks Algeria’s Skikda LNG Complex.” Oil Daily.
Jan. 21, 2004. p6.
8 Methane, the main component of LNG, burns in gas-to-air ratios between 5% and 15%.
9 Havens, Jerry. “Ready to Blow?” Bulletin of the Atomic Scientists. July/August 2003. p17.

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CRS-6
experts agree that a large pool fire, especially on water, is the most serious LNG
hazard.10
Other Safety Hazards. LNG spilled on water could (theoretically) regasify
almost instantly in a “flameless explosion,” but an Idaho National Engineering
Laboratory report concluded that “transitions caused by mixing of LNG and water are
not violent.”11 LNG vapor clouds are not toxic, but they could cause asphyxiation by
displacing breathable air.12 Such clouds may begin near the ground (or water) when
they are still very cold, but rise in air as they warm, diminishing the threat to people
on the ground. Extremely cold LNG could injure people or damage equipment
through direct contact.13 The extent of such contact would likely be limited,
however, as a major spill would likely result in a more serious fire. The
environmental damage associated with an LNG spill would be confined to fire and
freezing impacts near the spill since LNG dissipates completely and leaves no
residue.14
Terrorism Hazards. LNG tankers and land-based facilities could be
vulnerable to terrorism. Tankers might be physically attacked in a variety of ways
to destroy their cargo — or commandeered for use as weapons against coastal targets.
LNG terminal facilities might also be physically attacked with explosives or through
other means. Some LNG facilities may also be indirectly disrupted by “cyber-
attacks” or attacks on regional electricity grids and communications networks which
could in turn affect dependent LNG control and safety systems.15
Safety Record of LNG
The LNG tanker industry claims an impressive safety record over the last 40
years; since international LNG shipping began in 1959, tankers have carried over
33,000 LNG cargoes without a serious accident at sea or in port.16 LNG tankers have
experienced groundings and collisions during this period, but none has resulted in a
major spill. The LNG marine safety record is partly due to the double-hulled design
of LNG tankers. This design makes them more robust and less prone to accidental
spills than single-hulled oil, fuel, and chemical tankers like the Exxon Valdez, which
10 Havens. 2003. p17.
11 Siu, Nathan et al. Qualitative Risk Assessment for an LNG Refueling Station and Review
of Relevant Safety Issues. Idaho National Engineering Laboratory. INEEL/EXT-97-00827
rev2. Idaho Falls, ID. February, 1998. p71.
12 Siu. 1998. p62.
13 Siu. 1998. p63.
14 Quillen. 2002. p28.
15 Skolnik, Sam. “Local Sites Potential Targets for Cyberterror.” Seattle Post-Intelligencer.
Seattle, WA. Sept. 2, 2002.
16 Delano, Fisoye et al. “Introduction to LNG.” University of Houston Law Center, Institute
for Energy, Law and Enterprise. Houston, TX. January, 2003. p23.

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caused a major Alaskan oil spill after grounding in 1989.17 LNG tankers also carry
radar, global positioning systems, automatic distress systems and beacons to signal
if they are in trouble. Cargo safety systems include instruments that can shut
operations if they deviate from normal as well as gas and fire detection systems.18
The safety record of onshore LNG terminals is more mixed. There are
approximately 40 LNG terminals (and more than 150 other LNG storage facilities)
worldwide. Since 1944, there have been approximately 13 serious accidents at these
facilities directly related to LNG. Two of these accidents caused single fatalities of
facility workers — one in Algeria in 1977, and another at Cove Point, Maryland, in
1979. On January 19, 2004, a fire at the LNG processing facility in Skikda, Algeria
killed an estimated 27 workers and injured 74 others. The Skikda fire completely
destroyed the processing plant and damaged a marine berth, although it did not
damage a second processing plant or three large LNG storage tanks also located at
the terminal.19 While the Skikda accident did not injure the rest of the 12,000
workers at the complex, it was considered the worst petrochemical plant fire in
Algeria in over 40 years.20 According to press reports, preliminary investigation
indicated that the accident was caused by a leak from a liquefied gas pipeline, which
allowed a vapor cloud to form and subsequently ignite.21 Another three accidents at
worldwide LNG plants since 1944 have also caused fatalities, but these were
construction or maintenance accidents in which LNG was not present.22
Safety Regulations in Onshore LNG Siting
The Department of Transportation (DOT) and the Federal Energy Regulatory
Commission (FERC) are the federal agencies primarily responsible for the regulation
of onshore LNG facilities. Although federal statutes do not explicitly designate the
relative jurisdiction of DOT and FERC, the agencies have clarified their roles
through interagency agreement. These roles and their relation to other authorities are
summarized below.
Department of Transportation
The DOT sets safety standards for onshore LNG facilities. The DOT’s authority
originally stemmed from the Natural Gas Pipeline Safety Act of 1968 (P.L. 90-481)
17 Juckett, Don. U.S. Department of Energy (DOE). “Properties of LNG.” LNG Workshop.
Solomons, MD. February 12, 2002.
18 Petroplus International, N.V. “Energy for Wales: LNG Frequently Asked Questions.”
Internet home page. Amsterdam, Netherlands. August 4, 2003.
19 Junnola, Jill et al. Jan. 21, 2004. p6.
20 Hunter, Catherine. “Algerian LNG Plant Explosion Sets Back Industry Development.”
World Markets Analysis. Jan. 21, 2004. p1.
21 Raines, B. “Report Sheds New Light on LNG Blast in Algeria.” Mobile Register. Apr. 14,
2004.
22 CH-IV International. pp6-12.

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CRS-8
and the Hazardous Liquids Pipeline Safety Act of 1979 (P.L. 96-129). These acts
were subsequently combined and recodified as the Pipeline Safety Act of 1994 (P.L.
102-508), and amended again in 2002 by the Pipeline Safety Improvement Act (P.L.
107-355). Under the resulting statutory scheme, DOT is charged with issuing
minimum safety standards for the siting, design, construction, and operation of LNG
facilities.
The Pipeline Safety Act, as amended, includes the following provisions
concerning LNG facility siting (49 U.S.C. § 60103):
The Secretary of Transportation shall prescribe minimum safety standards for
deciding on the location of a new liquefied natural gas pipeline facility. In
prescribing a standard, the Secretary shall consider the —
(1) kind and use of the facility;
(2) existing and projected population and demographic characteristics
of the location;
(3) existing and proposed land use near the location;
(4) natural physical aspects of the location;
(5) medical, law enforcement, and fire prevention capabilities near the
location that can cope with a risk caused by the facility; and
(6) need to encourage remote siting.
General safety-related regulations may also impact siting decisions and affect
the operation of existing facilities. The statute requires the Secretary of
Transportation to consider geophysical risks, proximity to populations, adequacy of
emergency services, operator qualifications, and security measures when
promulgating LNG facility rules (49 U.S.C. § 60103). The Secretary is authorized
to order corrective action if operating an LNG facility could be hazardous to life,
property, or the environment (49 U.S.C. §§ 60112, 60117). DOT’s implementing
regulations for the Pipeline Safety Act, as amended, are in 49 C.F.R.§§ 191-199.
Safety standards, including those on siting, for LNG facilities are in 49 C.F.R. § 193
and are overseen by the Department’s Office of Pipeline Safety within the Research
and Special Programs Administration.
The siting provisions in 49 C.F.R. § 193 incorporate by reference standard 59A
from the National Fire Protection Association (NFPA).23 NFPA 59A requires
thermal exclusion zones and flammable vapor-gas dispersion zones around LNG
terminals (§§ 193.2057, 193.2059). While it establishes these minimal siting
requirements, DOT does not itself approve or deny specific siting proposals, with
such authority instead vested in the Federal Energy Regulatory Commission. The
DOT regulations also adopt many of NFPA’s design and construction guidelines
including requirements for LNG facilities to withstand fire, wind, hydraulic forces,
and erosion from LNG spills (§§ 193.2067, 193.2155, 193.2301). Other provisions
address operations (§§ 193.2501-2521), maintenance (§§ 193.2601-2639), employee
qualification (§§ 193.2701-2719), and security (§§ 193.2901-2917).
23 National Fire Protection Association (NFPA). Standard for the Production, Storage, and
Handling of Liquefied Natural Gas, 1996 Edition. NFPA 59A. Quincy, MA. 1996.

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CRS-9
Federal Energy Regulatory Commission (FERC)
Under the Natural Gas Act of 1938 (NGA),24 FERC grants federal approval for
the siting of new onshore LNG facilities.25 Section 7 of the act authorizes FERC to
issue certificates of “public convenience and necessity” for “the construction or
extension of any facilities ... for the transportation in interstate commerce of natural
gas” (15 U.S.C. § 717f). Section 7 does not expressly cover LNG facilities, however,
so recent agency policy has FERC exercising LNG siting regulation under its Section
3 authority.26,27 Section 3 of the act authorizes FERC to approve the import and
export of natural gas (15 U.S.C. § 717b). Specifically, FERC asserts approval
authority over the place of entry and exit, siting, construction, and operation of new
LNG terminals as well as modifications or extensions of existing LNG terminals.28
The FERC implements its authority over onshore LNG terminals through the
agency’s regulations at 18 C.F.R. § 153. These regulations detail the application
process and requirements under Section 3 of the NGA. FERC’s requirements include
detailed site engineering and design information, evidence that a facility will safely
receive or deliver LNG, and delineation of a facility’s proposed location (18 C.F.R.
§ 153.8). Additional data are required if an LNG facility will be in an area with
geological risk (18 C.F.R. § 153.8). The regulations also require LNG facility
builders to notify landowners (18 C.F.R. § 157.6d) as is required with section 7
approvals (18 C.F.R. § 153.3). Facilities to be constructed at the Canadian or
Mexican borders for import or export of natural gas also require a Presidential
Permit. According to FERC officials, applications under their Section 3-based
regulations are also sufficient for Presidential Permit purposes (18 C.F.R. §§
153.15-153.17).29
Under the National Environmental Policy Act of 1969 (P.L. 91-190), FERC
must prepare an environmental impact statement in its review of an LNG terminal
24 Act of June 21, 1938, ch. 556, 52 Stat. 812, (codified as amended at 15 U.S.C. §§ 717 et
seq).
25 The Department of Energy Organization Act of 1977 (P.L. 95-91) transferred to the
Energy Secretary the original NGA authority to approve siting, construction and operation
of onshore LNG facilities (§ 301b). The Secretary, in turn, delegated this authority to FERC.
26 California Energy Commission (CEC). Liquefied Natural Gas in California: History,
Risks and Siting. No.700-03-005. Sacramento, CA. at 16; 94 FERC 61,188 at 61,663.
27 In 1997, FERC reaffirmed its Section 3 authority despite changes to the Natural Gas Act
in the Energy Policy Act of 1992 (P.L. 102-486). For details see 97 FERC 61,231 (2001).
Also note that FERC’s regulatory power regarding LNG importation under section 3 has
been held to allow the Commission to impose requirements equivalent to any in section 7,
so long as the Commission finds them necessary or appropriate to the public interest.
Distrigas Corp. v. FPC, 495 F.2d 1057, 1066 (D.C. Cir. 1974).
28 See 18 C.F.R. § 153; see also Foley, R. Federal Energy Regulatory Commission (FERC),
Office of Energy Projects. “Liquefied Natural Gas Imports.” Slide presentation. Jan. 2003
at 10.
29 Federal Energy Regulatory Commission (FERC), Office of Energy Projects. Personal
communication. Dec. 10, 2003.

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CRS-10
siting application (18 C.F.R. § 380). FERC’s review requires 13 Environmental
Resource Reports, five of which are applicable specifically to LNG facilities. These
reports require analysis of, among other things, the socioeconomic impact of the
LNG facility; geophysical characteristics of the site; safeguards against seismic risk;
facility effects on air and noise quality; public safety issues in the event of accidents
or malfunctions; and facility compliance with reliability standards and relevant safety
standards (18 C.F.R. § 380.12). While FERC’s above-mentioned environmental
report provisions do not direct the outcome of final Commission action, they could
have substantial impact on LNG siting decisions.
FERC-DOT Jurisdictional Issues. While FERC uses DOT standards,
jurisdiction among the federal agencies with LNG oversight responsibilities has been
a point of contention at times.30 In practice, FERC requires compliance with DOT’s
siting and safety regulations as a starting point, but can regulate more strictly if it
chooses. This working arrangement is not explicitly established under the relevant
federal law. Neither do the statutes and regulations clearly define the roles of the
agencies vis-a-vis one another. The revised Pipeline Safety Act, for example, states:
In a proceeding under section 3 or 7 of the Natural Gas Act (15 U.S.C. § 717b
or 717f), each applicant ... shall certify that it will design, install, inspect, test,
construct, operate, replace, and maintain a gas pipeline facility under ... section
60108 of this title. The certification is binding on the Secretary of Energy and the
Commission... (49 U.S.C. § 60104(d)(2)).
Despite this provision, which might appear to give DOT full control of gas
safety regulation (including LNG siting authority), the authors of the associated
House committee report indicated their intention to preserve FERC jurisdiction over
LNG.31 Accordingly, FERC has held that the Pipeline Safety Act does not remove
its jurisdiction under the NGA to regulate LNG safety issues.32 In 1985, FERC and
DOT executed a Memorandum of Understanding expressly acknowledging “DOT’s
exclusive authority to promulgate Federal safety standards for LNG facilities” but
recognizing FERC’s ability to issue more stringent safety requirements for LNG
facilities when warranted. This agreement appears to have resolved any jurisdictional
conflict between the agencies at that time.33 In February 2004, FERC streamlined the
LNG siting approval process through an agreement with the Coast Guard (USCG)
and the Department of Transportation (DOT) to coordinate review of LNG terminal
safety and security. The agreement “stipulates that the agencies identify issues early
and quickly resolve them.”34
National Fire Protection Association (NFPA)
30 S. REP. NO. 96-182 at 4 (1979).
31 See H.R. REP. NO. 1390 (1968), reprinted in 1968 U.S.C.C.A.N. 3223, 3251.
32 Chatanooga Gas Co., 51 FPC 1278, 1279 (1974).
33 See “Notice of Agreement Regarding Liquified Natural Gas,” 31 FERC 61,232 (1985).
34 Federal Energy Regulatory Commission (FERC). Press release. R-04-3. Feb.11, 2004.

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CRS-11
As noted above, LNG terminal safety regulations incorporate standards set by
the NFPA. The NFPA is an international nonprofit organization which advocates fire
prevention and serves as an authority on public safety practices. According to NFPA,
its 300 safety codes and standards “influence every building, process, service, design,
and installation in the United States.”35 The NFPA LNG Standards Committee
includes volunteer experts with diverse representation from industry and government,
including FERC, DOT, USCG, and state agencies. The NFPA standards for LNG
safety were initially adopted in 1967, with nine subsequent revisions, most recently
in 2001.36 According to the Society of International Gas Tanker and Terminal
Operators (SIGTTO), although the NFPA standards originated in the United States,
they were the first internationally recognized LNG standards and are widely used
throughout the world today.37
State Regulatory Roles
While the federal government is primarily responsible for LNG terminal safety
and siting regulation, state and local laws, such as environmental, health and safety
codes, can affect LNG facilities as well. Under the Pipeline Safety Act, a state may
also regulate intrastate pipeline facilities if the state submits a certification under
section 60105(a) or makes an agreement with the DOT under section 60106. Under
these provisions, a state “may adopt additional or more stringent safety standards”
for LNG facilities so long as they are compatible with DOT regulations. (49 U.S.C.
60104(c)). Of course, if a particular LNG facility would otherwise not fall under
FERC and DOT jurisdiction, states may regulate without going through the
certification or agreement process. Regulation of interstate facilities remains the
primary responsibility of federal agencies. The Office of Pipeline Safety may,
however, authorize a state to “act as its agent to inspect interstate pipelines”
associated with LNG facilities while retaining its enforcement responsibility.38 As
of 2002, all states but three were participants in the natural gas pipeline safety
program and fifteen were in the hazardous liquid pipeline safety program.39
State regulation of LNG facility safety and siting runs the gamut from
comprehensive to piecemeal. In California, for example, the state Energy
Commission recently established the LNG Interagency Permitting Working Group
to coordinate its LNG terminal permitting process. The Working Group seeks “to
ensure that any LNG development is consistent with state energy policy that balances
35 National Fire Protection Assoc. (NFPA). About NFPA. Website. Quincy, MA. 2003.
36 National Fire Protection Association (NFPA). Standard for the Production, Storage, and
Handling of Liquefied Natural Gas, 2001 Edition. NFPA 59A. Quincy, MA. 2001.
Note that federal laws still refer to the 1996 revision of this standard.
37 Society of International Gas Tanker and Terminal Operators (SIGTTO). Personal
communication. London, England. Dec. 19, 2003.
38 Office of Pipeline Safety, programs website at [http://ops.dot.gov/partnership.htm].
39 Office of Pipeline Safety, CY 2002, States Participating in the Federal/State Cooperative
Gas and Hazardous Liquid Pipeline Safety Programs (April 2002).

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CRS-12
environmental protection, public safety, and local community concerns.”40 Arizona
sets out specific requirements for LNG storage facilities, including “peak shaving”
plants used by regional gas utilities, consistent with DOT regulations for construction
maintenance and safety standards (Ariz. Admin. Code R14-5-202, R14-5-203, 126-
01-001). Colorado and Georgia have similarly comprehensive administrative systems
for enforcing the federal standards (See 4 Co. Admin. Code 723-11; Ga. Admin.
Code 515-9-3-.03).
Apart from state regulation aimed specifically at LNG facilities, generally
applicable state and local laws, such as zoning laws and permit requirements for
water, electricity, construction, and waste disposal, also may serve to impact the
planning and development of LNG facilities. However, with respect to LNG in
particular, local laws have been overridden by state legislation in the past.41 It should
also be noted that a federally authorized LNG project cannot be frustrated by contrary
provisions found in state or local law.42
Federal-State Jurisdictional Conflicts. Federal and state government
agencies have had jurisdictional disagreements specifically related to the siting of
new LNG terminals. In February 2004, for example the California Public Utilities
Commission (CPUC) disputed FERC’s jurisdiction over the siting of a proposed
LNG terminal at Long Beach because, in the CPUC’s opinion, the terminal would be
not be involved in interstate sales or transportation and therefore would not come
under the Natural Gas Act.43 In March 2004, FERC rejected the CPUC’s arguments
and asserted exclusive regulatory authority for all LNG import terminal siting and
construction.44 In April 2004, the CPUC voted to assert jurisdiction over the Long
Beach terminal and filed a request for FERC to reconsider its March ruling.45
Litigation may ensue.
Recent Safety Issues in LNG Terminal Siting
Proposals for new LNG terminal facilities have generated considerable public
concern in many of the communities where the terminals would be built. Some
40 California Energy Commission, 2003 Integrated Energy Policy Report, Docket #02-IEP-
01, Publication Number 100-03-019F at 29.
41 New England LNG Co., Inc. v. City of Fall River, 331 N.E.2d 536 (Mass. 1975); see also
Tessa Meyer Santiago, Note, An Ounce of Preemption Is Worth a Pound of Cure: State
Preemption of Local Siting Authority As a Means for Achieving Environmental Equity, 21
VA. ENVTL. L.J. 71, 104 (2002).
42 ANR Pipeline Co. v. Iowa State Commerce Comm’n, 828 F.2d 465, 466 (8th Cir. 1987);
Algonquin LNG v. Loqa, 79 F. Supp. 2d 49, 49-50, 53 (D.R.I. 2000).
43 FERC. “Notice of Intervention and Protest of the Public Utilities Commission of the State
of California.” Docket No. CP04-58-000. Feb. 23, 2004. p6.
44 Lorenzetti, M. “LNG Rules.” Oil & Gas Journal. April 5, 2004. p32.
45 Gas Daily. “PUC Seeks Rehearing of FERC's Order on Long Beach LNG Project.” April
27, 2004. p7.

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CRS-13
community groups and local officials fear that LNG terminals may expose them to
unacceptable safety hazards, and that these safety hazards may not be appropriately
evaluated in the federal siting approval process. They question the adequacy of
safety exclusion zones and the lack of “remote siting” requirements in federal
regulations. They are also concerned that FERC does not adequately account for
maritime safety hazards associated with LNG tankers that would service new
terminals. These issues are complicated by apparent contradictions among recent
LNG hazard studies, including those used by the federal government to evaluate LNG
terminal hazards.
Safety Exclusion Zones
Federal safety regulations require LNG terminals to be surrounded by
“exclusion zones” to protect neighboring communities in the event of a pool fire or
flammable vapor cloud (49 C.F.R. §§ 193.2057, 2059). For FERC site approval, a
prospective LNG terminal owner or a government agency must exercise “legal
control” of activities within such zones.46 Critics of these LNG safety provisions
argue that the thermal and vapor exclusion zones they specify may be too small, in
part because the “design spills” on which they are based are too small.47 They argue
that catastrophes such as terrorist attacks on storage tanks could release far more
LNG far more quickly than assumed in siting plans — resulting in larger, hotter pool
fires or larger vapor clouds closer to nearby populations. Critics also argue that
federally allowable levels of thermal radiation from pool fires are too high, since
radiation at these levels could still burn people in a relatively short period of time.
One recent report commissioned by opponents of the proposed Harpswell terminal,
for example, concludes that “the federal safety requirements ... will not prevent harm
to humans outside the site boundary for the spill scenarios that FERC considers.”48
NFPA Perspectives. The NFPA LNG standards committee believes the 59A
exclusion zone provisions are adequate, striking an appropriate balance between
public safety and the public need for LNG facilities. The NFPA maintains that,
unlike some critics’ assertions, the LNG committee based its standards not only on
deep technical expertise, but also on 30 years of practical experience with liquefied
gas facilities around the world. The NFPA has said there is no reason to change the
current design spill provisions, nor any evidence that the catastrophic failure of an
onshore LNG tank is plausible.49
46 Federal Energy Regulatory Commission (FERC). Hackberry LNG Project: Final
Environmental Impact Statement. FERC/EIS-0156. Washington, DC. Aug. 14, 2003. p4-65.
47 Raines, B. “Congress Wanted LNG Plants at ‘Remote’ Sites.” Mobile Register. Mobile,
AL. Nov. 16, 2003.
48 Fay, James A., Nov. 5, 2003. p5.
49 National Fire Protection Assoc. (NFPA). Technical Committee on Liquefied Natural Gas.
Personal communication. Quincy, MA. Dec. 15, 2003.

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CRS-14
According to the NFPA, the LNG safety zone standards in 59A are more
stringent than NFPA’s comparable standards for liquefied petroleum gases (e.g.,
propane, butane) and liquefied hydrogen gas, which are more widespread in the
United States and potentially more hazardous than LNG.50 FERC and other experts
also consider the NFPA safety zone standard to be more stringent in important ways
than the European standard (EN 1473).51 For example, the European standard sees
no need to consider a fire scenario for certain “full containment” LNG tanks, so it
sets no minimum distance to the property line for such tanks, as NFPA 59A
requires.52 Unlike NFPA 59A, however, EN 1473 uses a risk based, case-by-case
standard rather than a prescriptive standard, so only limited general conclusions can
be drawn by comparing their distinct safety zone provisions. The EN 1473
committee acknowledges, however, that its standard could “possibly be manipulated
given a weak or ill informed national regulatory body.”53
The NFPA also believes its thermal radiation limits are appropriate. According
to federal regulation, thermal radiation from a design spill can be no more than 1,600
Btu/ft2-hr at a “property line that can be built upon” or at an “outdoor assembly area
occupied by 50 or more persons” (NFPA 59A 2-2.3.1).54 This radiation level would
burn an exposed person within approximately 30 seconds, but would not ignite a
wooden structure.55 The NFPA LNG standards committee acknowledges that heat
exposure at 1,600 Btu/ft2-hr “is fatal quite quickly” and that this specific limit is
“somewhat arbitrary.”56 Nonetheless, the NFPA believes there would be sufficient
alarm or other warning in an LNG release to allow potentially exposed individuals
time to seek shelter or move further away from the exclusion zone before injury.
Based on the its field experience, the NFPA believes the current thermal limit is
reasonable and has no plans to revise it.57
FERC Perspectives. Like NFPA, FERC officials believe the design spill and
exclusion zone requirements in the DOT regulations are adequate to ensure public
safety. In its recent draft evaluation of the proposed Freeport LNG terminal, the
Commission does calculate thermal exclusion zones based on a major storage tank
design spill. This spill assumes the release of 46.5 million gallons of LNG from an
onshore storage tank, approximately 110% of the total tank capacity, resulting in a
50 NFPA. Personal communication. Dec. 15, 2003. See NFPA 58: Liquefied Petroleum Gas
Code, and NFPA 50B: Standard for Liquefied Hydrogen Systems.
51 British Standards Institute (BSI). EN 1473: Design of Onshore LNG Terminals. London,
England. 1997.
52 Federal Energy Regulatory Commission (FERC). Freeport LNG Project: Draft
Environmental Impact Statement. FERC/EIS-0164D. Washington, DC. Nov. 2003. p4-113.
53 SIGTTO. Personal communication. Jan. 5, 2004
54 NFPA 2001.
55 FERC. Nov. 2003. p4-120.
56 NFPA. Personal communication. Dec. 15, 2003.
57 NFPA. Personal communication. Dec. 15, 2003.

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CRS-15
thermal exclusion zone of 914 feet from the tank.58 The largest flammable vapor
exclusion zone FERC considers, however, is based on a spill of approximately
220,000 gallons in the process area drain, resulting in a vapor exclusion zone of
2,111 feet from the drain.59 FERC’s report does not consider vapor dispersion from
a larger tank spill because the NFPA does not view such an event to be a credible
failure.60
FERC officials acknowledge that the impact of potential terror attacks is
unpredictable. Nonetheless, FERC maintains that the more extreme scenarios
suggested by some LNG terminal opponents are too theoretical and do not
realistically reflect the actual configuration and physical characteristics of LNG
terminal infrastructure, including the comprehensive safety and security features
required in terminal design. For example, FERC officials disagree with the
proposition that the entire contents of an LNG storage tank can spill instantly in
FERC’s view “like lifting an upside-down dixie cup” as suggested by some critics.61
Marine Safety Hazards
In addition to concerns about the adequacy of mandated safety exclusion zones,
communities near proposed LNG terminals fear that FERC does not adequately
account for potential safety hazards from LNG tankers serving those terminals.62 As
noted earlier in this report, LNG spills on water are potentially more dangerous than
spills on land because LNG may spread much more quickly over water and is not
readily contained. Consequently, some experts believe an LNG tanker accident or
attack resulting in a major spill could pose a hazard to coastal communities along the
tanker’s route. These concerns have led, for example, to (unsuccessful) attempts by
the mayor of Boston to permanently suspend LNG shipments to the Everett terminal
passing through Boston harbor.63
FERC officials have stated that there are no federal requirements for marine
exclusion zones around LNG tankers analogous to exclusion zones around onshore
facilities — and that such requirements are unnecessary. The USCG has primary
jurisdiction over LNG shipping and marine transfer facilities. Nonetheless, FERC
believes “looking at marine risk in LNG siting applications is required under the
founding principles of the National Environmental Policy Act.”64 In its LNG review
of the Freeport LNG terminal application, for example, FERC did examine the
potential effects of ship-to-ship and ship-to-shore collisions, accidental grounding,
58 FERC. Nov. 2003. pp4-119,120.
59 FERC. Nov. 2003. p4-121.
60 NFPA. Personal communication. Jan. 8, 2004.
61 Federal Energy Regulatory Commission (FERC). Office of Energy Projects. Personal
communication. Dec. 10, 2003.
62 Raines, B. and Finch, B. “Who Gauges Tanker Hazard?” Mobile Register. Mobile, AL.
Oct. 26, 2003.
63 Fitzgerald, Jay. “Mayor: Ban LNG ships in Hub.” Boston Herald. Nov. 8, 2003. p19.
64 FERC. Office of Energy Projects. Personal communication. Dec. 10, 2003.

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CRS-16
and certain “credible” terror attacks.65 Terminal opponents have criticized FERC’s
use of engineering models in marine hazard analysis, however, so the Commission’s
conclusions based on these models have been controversial.66
In addition to FERC’s onshore operations requirements, LNG marine operations
would have to adhere to LNG vessel management procedures and emergency plans
developed by the regional USCG marine safety unit. These procedures would
contain requirements for pre-arrival notification, harbor transit, dock operations,
cargo transfer, inspection, monitoring and emergency operations. FERC expects the
key provisions would include a moving safety zone around LNG ships set by the
USCG.67 Security of hazardous cargoes such as LNG is already subject to extensive
requirements such as security zones and harbor escorts under USCG maritime
security regulations to mitigate the possibility of an accident or attack.68
Remote Siting
As noted earlier in this report, the LNG safety provisions in the Pipeline Safety
Act require the Secretary of Transportation to “consider the ... need to encourage
remote siting” of new LNG facilities (49 U.S.C. § 60103). But federal regulations
contain no remote siting requirements, relying instead on safety exclusion zones to
protect the public. This regulatory alternative was criticized by the General
Accounting Office (GAO) in 1979 testimony to Congress supporting remote siting
in the Pipeline Safety Act:
We believe remote siting is the primary factor in safety. Because of the
inevitable uncertainties inherent in large-scale use of new technologies and the
vulnerability of the facilities to natural phenomena and sabotage, the public can
be best protected by placing these facilities away from densely populated areas.69
More recently, Representative Edward Markey, an original sponsor of the Pipeline
Safety Act, has expressed concern that DOT regulations do not go far enough in
complying with the congressional intent of the remote siting provisions.70
Industry and government officials maintain that exclusion zones do provide
adequate public safety based on the current state of knowledge about LNG. They
65 FERC. Nov. 2003. p4-132.
66 Raines, B. and Finch, B. “Study Talks of Possible LNG Disaster as Result of Accident.”
Mobile Register. Mobile, AL. Oct. 22, 2003.
67 FERC. Nov. 2003. p4-129.
68 Parfomak, P. Liquefied Natural Gas (LNG) Infrastructure Security: Background and
Issues for Congress. CRS Report RL32073. Congressional Research Service. Washington,
DC. Sept. 9, 2003.
69 Peach, J.D. General Accounting Office (GAO), Director, Energy and Minerals Division.
Testimony to the Senate Committee on Commerce, Science and Transportation.
Washington, DC. April 25, 1979. p10.
70 Raines, B. “Congress Wanted LNG Plants at ‘Remote’ Sites.” Mobile Register. Mobile,
AL. Nov. 16, 2003.

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CRS-17
argue that LNG terminals are no longer a new technology and face far fewer
operational uncertainties than in 1979. In particular, some experts believe that hazard
models in the 1970's were too conservative. They believe that more recent models
have led to a better understanding of the physical properties of LNG, and,
consequently, a better basis for design decisions affecting public safety.71 They point
out that LNG terminals like those in Everett, Massachusetts (1971); Barcelona, Spain
(1969); Fezzano, Italy (1969); and Pyongtaek, Korea (1986) have been operating for
decades near populated areas without a serious accident affecting the public. Of the
40 existing LNG terminals in Japan, a seismically active country, 24 are near major
cities such as Tokyo and Osaka.72 While the recent Algerian terminal accident was
quite serious, experts point out that it did not lead to the catastrophic failure of the
main LNG storage tanks and did not cause injuries the general public.
LNG Hazard Models
A number of technical studies since the terror attacks of September 11, 2001,
have been commissioned to reevaluate the safety hazards of LNG terminals and
associated shipping (Table 2). These studies have caused controversy because some
reach differing conclusions about the potential public hazard of LNG terminal
accidents or terror attacks. Consequently, community groups fear that LNG hazards
may be misrepresented by government agencies, or that certain LNG hazards may
simply not be understood well enough to support a terminal siting approval.73 For
example, recent press articles suggest that federal agencies may have underestimated
the possibility of a catastrophic chain-reaction explosion arising from the breach of
an LNG ship.74
Table 2. Recent LNG Hazard Studies
Author
Sponsor
Subject
Lloyd’s Register of
Distrigas (Tractebel)
Focused analysis models possible terror
Shipping75
attacks on LNG ships serving Everett
Quest Consultants Inc.76
DOE (lead), FERC, DOT
Models catastrophic breach of an LNG ship
tank
71 Tobin, L.T. Remarks at a meeting of the City of Vallejo Seismic Safety Commission.
Meeting minutes. Vallejo, CA. Sept. 11, 2003. p5. See also: Federal Register. Vol.62.
No.37. Feb. 25, 1997. pp8402-8403.
72 California Energy Commission (CEC). “LNG Worldwide.” Commission website at
[http://www.energy.ca.gov/lng/international.html]. Link active as of Jan. 28, 2004.
73 Editorial. “An Independent LNG Study Urgently Needed.” Mobile Register. Nov. 9, 2003.
74 Anonymous. “LNG Safety Questions.” Long Beach Press-Telegram. Long Beach, CA.
Public forum section. Dec. 20, 2003.
75 Waryas, Edward. Lloyd’s Register Americas, Inc. “Major Disaster Planning:
Understanding and Managing Your Risk.” Fourth National Harbor Safety Committee
Conference. Galveston, TX. March 4, 2002. Summary excerpts are in this presentation.
76 Juckett, Don. U.S. Department of Energy (DOE). “Properties of LNG.” LNG Workshop.
Solomons, MD. February 12, 2002. Quest study summary are in this presentation.

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James Fay (MIT)77
Fair Play for Harpswell
Models fire and vapor hazards of proposed
Harpswell LNG terminal
Tobin & Associates78
City of Vallejo
Reviews general safety of proposed Mare
Island LNG terminal
Lehr and Simecek-
NOAA staff
Compares hypothetical LNG and fuel oil fires
Beatty79
on water
ABS Consulting
FERC (lead), DOT, USCG
Reviews consequence assessment methods
for LNG tanker incidents
Sandia National
DOE
Will examine effect of large-scale LNG spill
Laboratory80
on water
Source: Congressional Research Service.
Most hazard analyses for LNG terminals and shipping depend on computer
models to approximate the effects of hypothetical accidents. Federal siting standards
specifically require computer modeling of thermal radiation and flammable vapor
cloud exclusion zones (49 C.F.R. §§ 193.2057, 2059).81 Such models are necessary
because there have been no major LNG incidents of the type envisioned in LNG
safety research and because historical LNG experiments have been limited in scale
and scope. But LNG hazards models simulate complex physical phenomena and are
inherently uncertain, relying on calculations and input assumptions about which fair-
minded analysts may legitimately disagree. Even small differences in an LNG hazard
model have led to significantly different conclusions. Referring to the recent LNG
safety zone studies, for example, FERC notes that “distances have been estimated to
range from 1,400 feet to more than 4,000 feet for [hazardous] thermal radiation.”82
The LNG hazard studies in Table 2 have been sponsored by a range of
stakeholders and have been performed by individuals with various kinds of expertise.
It is beyond the scope of this report to make detailed comparisons of the
methodologies and findings of these studies and FERC analysis. Furthermore, not
all of these reports are publicly available, and one is yet to be completed.
Nonetheless, each of the available studies (or its application) appears to have
significant limitations, or has been questioned by critics. The ABS Consulting study
77 Fay, James A. “Public Safety Issues at the Proposed Harpswell LNG Terminal.” FairPlay
for Harpswell. Harpswell, ME. Nov. 5, 2003.
78 Tobin & Assoc. “Liquefied Natural Gas in Vallejo: Heath and Safety Issues.” Final
Report by the LNG Safety Committee of the Disaster Council, Vallejo, CA. Jan.16, 2003.
79 Lehr, W. and Simecek-Beatty, D. “Comparison of Hypothetical LNG and Fuel Oil Fires
on Water.” Journal of Hazardous Materials. v107. p3-9. 2004.
80 Anonymous. “Author Claims Natural Gas Tanker Port Study Being Misused.” Dow Jones
Newswires. Dec. 5, 2003.
81 Gas Research Institute (GRI). “LNGFIRE: A Thermal Radiation Model for LNG Fires”
Version 3. GRI-89/0176. Washington, DC. June 29, 1990; “LNG Vapor Dispersion
Prediction with the DEGADIS: Dense Gas Dispersion Model.” GRI-89/00242; “Evaluation
of Mitigation Methods for Accidental LNG Releases. Vol. 5: Using FEM3A for LNG
Accident Consequence Analyses.” GRI 96/0396.5. Washington, DC.
82 FERC. Nov. 2003. p4-133.

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released by FERC in May 2004, which reviewed existing LNG hazard models,
concluded that
• No release models are available that take into account the true structure of an
LNG carrier....
• No pool spread models are available that account for wave action or currents.
• Relatively few experimental data are available for validation of models involving
LNG spills on water, and there are no data available for spills as large as the spills
considered in this study.83
Despite these limitations in current LNG hazard modeling techniques, FERC has
stated its intention to use the methods recommended by ABS to calculate vapor and
thermal hazards for each LNG terminal application it reviews.84
In its Freeport LNG siting review, FERC acknowledged that “opportunity exists
to refine ... assumptions and provide a more realistic assessment of the ‘worst case’
hazards.”85 But the Commission also disagreed with the planning implications of
“worst case” scenarios put forth by LNG terminal opponents. According to FERC,
The various approaches to estimate a ‘worst case’ scenario should not be
misconstrued as defining an exclusionary zone. Rather the “worst case”
scenarios provide guidance ... in establishing potential impact areas for
emergency response and evacuation planning.86
Hazards vs. Risks. In reviewing the various LNG hazard studies becoming
available, it is important to be clear about the distinction between hazards and risks.
While theoretical models may try to quantify the effects of worst-case hazards,
evaluating the risks associated with those hazards requires an estimate of the
probability that they will occur. It is often argued that a significant hazard which is
nonetheless highly unlikely does not represent an unacceptable risk to the public. In
this view, worst-case hazard studies alone do not provide a sufficient basis for
evaluating public safety. Unfortunately, few LNG safety studies comprehensively
and convincingly address the probability of catastrophic accidents or attacks actually
occurring. In part, this shortcoming arises from a lack of historical LNG incidents
and detailed terrorist threat information on which to base such probabilities. Faced
with this analytic uncertainty, decision makers are forced to draw the best
information they can get and rely upon their own best judgment to reach conclusions
about LNG safety.
LNG Terminal Safety in Perspective
83 ABS Consulting. Consequence Assessment Methods for Incidents Involving Releases from
Liquefied Natural Gas Carriers. GEMS 1288209. Prepared for the Federal Energy
Regulatory Commission under contract FERC04C40196. May 13, 2004. page iii.
84 FERC. “Notice of Availability of Consequence Assessment Methods for Incidents
Involving Releases From Liquefied Natural Gas Carriers.” Docket No. AD04-6-000. May
14, 2004. p1.
85 FERC. Nov. 2003. p4-133.
86 FERC. Nov. 2003. p4-134.

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Other Hazardous Materials. LNG terminals and tankers have a high profile
due to recent media coverage, although there are few of them relative to all the
hazardous chemical plants and ships currently operating near U.S. cities. According
to the U.S. Environmental Protection Agency, for example, over 500 toxic chemical
facilities operate in “urban” areas at which worst-case accidents could affect 100,000
or more people.87 These include chlorine plants in city water systems and ammonia
tanks in agricultural fertilizer production. There are also oil refineries and other
liquefied petroleum gas (e.g., propane, butane) terminals operating in U.S. ports
which pose safety hazards similar to those of LNG. Based on data from the U.S.
Office of Hazardous Materials Safety, there are over 100,000 annual U.S. shipments
of hazardous marine cargo such as ammonia, crude oil, liquefied petroleum gases,
and other volatile chemicals.88 Many of these cargoes pose a similar hazard to LNG
and pass through the same harbors serving existing or proposed LNG terminals.
Terror Attractiveness. The attractiveness of LNG infrastructure to terrorists
has been the subject of debate since September 11, 2001. Many experts believe that
concerns about terrorist threats to LNG may be overstated and should not impede
increased LNG imports. They argue that deliberately causing an LNG catastrophe
to injure people would be extremely difficult and that LNG facilities are relatively
secure compared to other hazardous chemical infrastructure. The head of one
university research consortium remarked, for example, “from all the information we
have ... we don’t see LNG as likely or credible terrorist targets.”89 Likewise, based
in part on consultations with the Federal Bureau of Investigation, NFPA’s LNG
standards committee has not seen a need to update the 59A standard in light of the
September 11, 2001, terror attacks.90 On the other hand, the Department of Homeland
Security (DHS) specifically identified LNG assets among a list of potential terrorist
targets in a security alert late in 2003.91 The DHS also reported that “in early 2001
there was some suspicion of possible associations between stowaways on Algerian
flagged LNG tankers arriving in Boston and persons connected with the so-called
‘Millennium Plot’” to bomb targets in the United States. While these suspicions
87 Based on facilities submitting Risk Management Plans required under Section 112 of the
Clean Air Act (42 U.S.C. § 7412) and classified in the December 1, 2003 update of the EPA
National Database using EPA’s software RMP*Review (v2.1). EPA notes that an entire
population is highly unlikely to be affected by any single chemical release, even in the worst
case. In an actual release, effects on a population would depend on wind direction and many
other factors. In addition, these worst-case scenarios do not account for emergency response
measures facility operators or others might take to mitigate harm.
88 Office of Hazardous Materials Safety, Department of Transportation. Hazardous
Materials Shipments. Washington, DC. October, 1998. Table 2. p2.
89 Behr, Peter. “Higher Gas Price Sets Stage for LNG.” Washington Post. Washington,
D.C. July 5, 2003. pD10.
90 National Fire Protection Assoc. (NFPA). Technical Committee on Liquefied Natural Gas.
Personal communication. Quincy, MA. Dec. 15, 2003.
91 Office of Congressman Edward J. Markey. Personal communication. Jan. 5, 2004.

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could not be proved, DHS stated that “the risks associated with LNG shipments are
real, and they can never be entirely eliminated.”92
Civil and Criminal Liability. One reason LNG tanker and terminal operators
seek to ensure public safety is to avoid civil and criminal liability from an LNG
accident; there are no special provisions in U.S. law protecting the LNG industry
from such liability. The 1989 Exxon Valdez oil spill, for example, cost Exxon over
$1 billion in criminal and civil settlements for violations of federal and state laws.
In January 2003, the Justice Department announced over $100 million in civil and
criminal penalties against Olympic Pipeline and Shell Pipeline resolving claims from
a fatal pipeline fire in Bellingham, Washington in 1999.93 In March 2003,
emphasizing the environmental aspects of homeland security, Attorney General
Ashcroft announced a crackdown on companies failing to protect against possible
terrorist attacks on storage tanks, transportation networks, industrial plants and
pipelines. He pledged to increase prosecution of civil and criminal cases, where
appropriate, to make companies comply with environmental and safety laws.94 Not
everyone believes, however, that Justice department scrutiny will ensure LNG
infrastructure safety. Public scrutiny of gas and hazardous liquids pipeline safety
after the Bellingham accident, for example, raised concerns about energy
companies’commitment to safe operations and their often close relationships with
safety enforcement agencies.95
Even if no federal or state regulations are violated, LNG companies still face
civil liability for personal injury or wrongful death in the event of an accident. In the
Bellingham case, for example, the pipeline owner and associated defendants agreed
to pay a $75 million settlement to the families of two children killed in the accident.96
In 2002, El Paso Corporation settled wrongful death and personal injury lawsuits
stemming from a natural gas pipeline explosion near Carlsbad, New Mexico which
killed 12 campers.97 Although the terms of those settlements were not disclosed, two
additional lawsuits sought a total of $171 million in damages. The impact of these
lawsuits on the company’s business is unclear, however; El Paso’s June 2003
92 Turner, Pamela J., Assistant Secretary for Legislative Affairs, Department of Homeland
Security (DHS). Letter to Representative Edward Markey. April 15, 2004. p1.
93 Anonymous. “Shell, Olympic Socked for Pipeline Accident.” Energy Daily. Jan. 22,
2003.
94 Heilprin, John. “Ashcroft Promises Increased Enforcement of Environmental Laws for
Homeland Security.” Assoc. Press. Washington Dateline. Washington, DC. March 11, 2003.
95 Nesmith, J. and Haurwitz, R.K.M. “Pipelines: The Invisible Danger.” Austin American-
Statesman. Austin, TX. July 22, 2001.
96 Business Editors. “Olympic Pipe Line, Others Pay Out Record $75 Million in Pipeline
Explosion Wrongful Death Settlement.” Business Wire. April 10, 2002
97 National Transportation Safety Board (NTSB). Pipeline Accident Report PAR-03-01. Feb.
11, 2003.

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quarterly financial report noted that “our costs and legal exposure... will be fully
covered by insurance.”98
Policy Options for Congress
A key question for Congress, with respect to the siting of new LNG terminals,
is whether the regulation of these terminals appropriately balances the risk to public
safety with the need for new natural gas supplies. On one hand, some may view
current federal LNG siting requirements and processes as sufficient. Holders of this
view would continue to rely on the judgment of LNG experts in federal agencies and
standards committees to appropriately balance public safety with public needs.
While there have been some concerns about regulatory jurisdiction, marine safety and
hazard models, some may believe that the responsible government agencies are
actively and cooperatively addressing these concerns. On the other hand, policy
makers may believe that some aspects of new LNG terminals do pose excessive
public risks, or that there is still too much uncertainty about key risks to make final
conclusions about public safety. In this case, Congress has several options to further
address LNG terminal safety concerns.
Banning Onshore LNG Terminals. As some have suggested, Congress
could ban the construction of any new LNG terminals onshore in the belief that, due
to their hazards, such terminals simply should not be built anywhere near people.99
Many “remote siting” advocates would likely support such a ban. Indeed, as Table
1 shows, developers have already proposed numerous offshore LNG terminals —
largely to avoid public safety concerns. Others say an onshore LNG terminal ban
would have several potential disadvantages. They argue that offshore LNG terminals
are generally more expensive than onshore terminals and further away from
consumer markets, so an offshore requirement ultimately increases energy costs
compared to a gas supply network with a mix of offshore and onshore facilities. No
offshore LNG terminals have been built yet, so they may also need to overcome
technical challenges associated with their floating designs.100 Second, they argue, an
onshore terminal ban might by implication ultimately lead to the closure of the
existing onshore LNG terminals and LNG storage facilities used by regional gas
companies. Such closures could increase natural gas prices and volatility, and could
lead to immediate shortages in regions like New England with constrained pipeline
supplies. Third, they say, such a ban could set a precedent affecting a host of other
economically critical but locally undesirable facilities. If new LNG terminals must
all be built offshore, they ask, will the same eventually be required of every other
hazardous material terminal or storage facility? Some say a federal policy move in
98 El Paso Corp. Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. Form 10-Q. For the period ending June 30, 2002. Houston, TX.
99 Editorial Board. “Move ExxonMobil’s LNG Plant Offshore.” Mobile Register. Nov. 30,
2003.
100 Shook, Barbara. “Environmental, Safety, Security Issues Add to Cost of Offshore LNG.”
Oil Daily. Energy Intelligence Group. August 5, 2003.

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this direction could have unpredictable economic and environmental implications for
all manner of trade and industrial production where public hazards exist.
Redefining Federal and Local Siting Authorities. Since LNG terminal
hazards primarily affect local communities, Congress could encourage a greater role
for state and local safety regulation in new terminal siting. LNG terminals are
unusual among hazardous chemical facilities in that the federal government plays the
lead role in safety regulation and site approval. For most other types of facilities
storing hazardous materials, like water treatment plants and industrial refrigeration
plants, state and local authorities have greater safety and siting approval authority.
If states or localities were given greater siting approval authority for LNG, they could
individually adopt safety standards which might alleviate local community concerns.
States are prohibited by law from setting safety standards for interstate pipeline
facilities and LNG terminals, although they may adopt “additional or more stringent
safety standards” for intrastate pipelines if those standards are compatible with the
minimum federal standards (49 U.S.C. § 60103c).
Although devolving federal LNG siting authority to state and local agencies
might alleviate local safety concerns, it might also create unintended and
unacceptable barriers to LNG infrastructure development. State and local authority
over electric transmission siting, for example, has long been criticized for preventing
or delaying new transmission projects critical to regional electric reliability due in
many cases to local community opposition. State agencies might also not possess the
requisite expertise and resources to properly evaluate the complex technical issues
associated with LNG safety. For these reasons, proposals like the Liquefied Natural
Gas Import Terminal Development Act (H.R. 4413), introduced on May 20, 2004,
would reassert federal LNG siting authority, not diminish it. Among other
provisions, H.R. 4413 would clarify that the federal government has the primary
authority to approve LNG terminal siting (Sec. 2d); would clarify that the Federal
Energy Regulatory Commission (FERC) is the lead agency for onshore LNG terminal
environmental review and permitting (Sec. 2g); would codify FERC’s prior rulings
exempting LNG terminals from certain rate regulations and open access requirements
(Sec. 2d); and would streamline the onshore terminal siting review process, requiring
FERC to issue siting decisions within one year of receiving an application (Sec. 2e).
Setting More Stringent Standards. Congress could set more stringent
provisions in safety standards for new LNG terminals to address perceived
weaknesses in the existing standards. For example, provisions lowering allowable
radiation thresholds for thermal exclusion zones, would effectively increase the size
of those zones. Other provisions could mandate prescriptive hazard modeling for
LNG tankers serving new terminals in the same way that onshore spill impacts must
be modeled. But in setting more stringent safety provisions, technical justification
for the alternative provisions might be needed, or the new standards might face
greater criticism for arbitrariness than the current ones. Time would also be needed
to fully understand the implications of these alternatives on the safety of existing
LNG terminals and the development of new LNG infrastructure. Standards set too
stringently, for example, might in effect equate to a ban on onshore facilities, with
all the consequences of an explicit ban discussed above. The possible closure of
currently operating terminals could create even more serious gas supply problems.
Alternatively, policy makers could act to adopt less prescriptive safety standards like

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those in EN 1473, relying on facility-specific risk studies to evaluate safety hazards.
There is, however, no evidence that such standards consistently lead to safer LNG
facilities. Furthermore, the inherent subjectivity of such standards might do little to
quell debate about hazard analysis in sensitive locations.
Encouraging More Safety Research. As some in Congress have
suggested, Congress could call for additional LNG safety research to help reduce
uncertainties about specific LNG terminal or shipping hazards.101 A number of LNG
terminal hazard reports have emerged in the last two years, and more are underway,
but there appears to be widespread agreement among federal agencies, LNG
developers and community groups that additional “objective” LNG safety research
would be beneficial. While the ABS report does recommend certain currently
available methods for estimating the effects of LNG releases, it states that “additional
research will need to be performed to develop more refined models, and additional
large-scale spill tests would be useful for providing better data for validation of
models.”102 Physical testing (as opposed to computer simulations) of impacts and
explosions on LNG tanker hulls by the USCG could also fill important gaps in
engineering knowledge about the potential effects of terrorist attacks. Executing
such a research program would have to be done within the next year, however, in
order to influence pending applications for new LNG terminal construction. Such
studies could also still be subject to the same types of technical limitations and
criticisms facing existing analysis, so while they may reduce key uncertainties, they
may not eliminate them altogether. These studies could also be costly, especially if
they involve field experiments on the scale of credible LNG accidents or attacks.
Reducing LNG Demand. Congress could try to reduce the need for new
LNG terminals by acting to curb growth in U.S. LNG demand, or growth in natural
gas demand overall. For example, Congress could change public and industrial
incentives for conservation, switching to other fuels, or developing renewable energy
supplies. But other fuels like coal and nuclear power pose their own hazards to
communities and the environment, so their expansion may not be preferable to
additional LNG infrastructure. Conservation and renewable energy sources are less
hazardous, although they face significant technological and cost barriers to more
widespread public adoption. Federal investments in renewables research or
conservation subsidies might have to be large, and might not have enough impact to
alleviate the need for LNG expansion altogether. Various provisions in recent
proposed energy legislation would encourage the development of conservation and
other alternatives to natural gas, but critics believe they would not likely go far
enough to significantly affect near-term natural gas consumption.
Another potential way to curb U.S. LNG demand would be to encourage greater
North American production of natural gas. Several recent energy policy proposals
seek to promote this objective, including proposals to encourage construction of an
Alaskan gas pipeline and encourage production from marginal gas wells in North
America. An Alaska gas pipeline would take years to build, say opponents, and
101 “Ala. Senator Cites Safety Fears Over LNG Plan.” Gas Daily. McGraw-Hill. Dec. 22,
2003. p1.
102 ABS Consulting. May 13, 2004. page iv.

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would not on its own be able to meet the anticipated long-term growth in U.S. gas
demand. Increased production from natural gas wells in the lower 48 states could
help alleviate a possible near-term natural gas supply shortage, but may not offer a
sustainable long-term supply solution since domestic gas reserves may not be able
to keep pace with rising gas demand.
Conclusions
Proposals for new U.S. LNG import terminals are numerous, but LNG imports
pose significant safety challenges. LNG is inherently hazardous and its infrastructure
is potentially attractive to terrorists. The recent LNG terminal fire in Algeria
demonstrates that, despite technological improvements since the 1940s, LNG
facilities can still experience serious accidents. Many lawmakers and the general
public are concerned about these hazards.
The U.S. LNG industry is subject to more extensive siting and safety regulation
than many other similarly hazardous facilities. Federal, state and local governments
have also put in place security measures intended to safeguard LNG against newly
perceived terrorist threats. Some community groups and other stakeholders fear that
federal siting requirements for LNG facilities are still not stringent enough, but the
responsible federal agencies disagree.
The safety issues associated with LNG terminal siting are both important and
familiar. Every major energy source poses some hazard to public safety. Similar
public concerns have been raised around siting of other types of energy facilities such
as nuclear power plants, oil import terminals, pipelines, and electric transmission
lines. In the case of nuclear power, strict safety requirements and community siting
opposition, along with high construction costs, have helped block new plant orders
for over 25 years. In evaluating new LNG terminal proposals, therefore, policy
makers face a full range of facilities and safety hazards associated with U.S. energy
supplies, not only LNG needs and hazards on their own.
Although LNG terminal regulations are extensive, and the global industry has
decades of experience operating LNG facilities, many stakeholders question LNG
terminal safety. Some of these questions might be resolved through additional
research on key LNG topics. Rather than reaching potentially premature conclusions
about a particular LNG terminal proposal (either for or against) based on incomplete
engineering knowledge or press commentary, decision makers might seek clearer
understanding of LNG hazards through research. LNG siting decisions are already
underway, however, so any research efforts intended to affect the siting process
would probably have to be completed quickly. Revisiting federal LNG siting
decisions may disrupt the ongoing development of LNG infrastructure and associated
energy supplies. The construction and subsequent closure of the Shoreham nuclear
power plant in the 1980's due to new public safety requirements offers an example
of the need to resolve safety concerns before capital is invested.
Both industry and government analysts project continued growth in the demand
for natural gas — and a decreasing ability for domestic gas producers to meet that

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demand.103 Greater LNG imports represent one way to address this growth in
demand, along with increased North American gas production, conservation, fuel-
switching, and the development of renewable energy sources. One way or another
the fundamental gas supply and demand balance must be maintained. If policy
makers encourage LNG imports, then the need to foster the other energy options may
be diminished — and vice versa. Thus decisions about LNG infrastructure could
have consequences for a broader array of natural gas supply policies.
103 Energy Information Administration (EIA), U.S. Dept. Of Energy. Annual Energy Outlook
2004 with Projections to 2025. DOE/EIA-0383(2003). Washington, DC. Jan. 2004.

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Appendix: Offshore LNG Terminal Regulation
Under the Deepwater Port Act of 1974 (P.L. 93-627) the Secretary of
Transportation is directed to “authorize and regulate the location, ownership,
construction, and operation of deepwater ports” (33 U.S.C. §§ 1501(a), 1503). The
Secretary has delegated this authority to the Maritime Administration (MARAD)
within the Department of Transportation, and to the Coast Guard (USCG), within the
Department of Homeland Security.104 Originally, P.L. 93-627 applied only to
offshore oil ports and terminals and not LNG facilities. However, the Maritime
Transportation Security Act of 2002 (P.L. 107-295) amended P.L. 93-627 to include
natural gas facilities, including LNG terminals, developed offshore. As amended,
“deepwater ports” are:
any fixed or floating manmade structure other than a vessel ... located beyond
State seaward boundaries ... intended for use as a port or terminal for the
transportation, storage, or further handling of oil or natural gas for transportation
to any State . . . (33 U.S.C. § 1502(9a))105
The Deepwater Port Act sets out a detailed process for offshore facility siting
applications. The act also authorizes regulations addressing potential threats to the
environment or human welfare posed by development of offshore LNG facilities (33
U.S.C. §§ 1504, 1508; 33 C.F.R. § 148). The act also requires regulations for the
designation of safety zones around deepwater ports (33 U.S.C. § 1509(d)). Among
the amendments to the act is a provision exempting LNG terminals from the
limitation on the number “deepwater ports” that can be located in a designated
“application area,” a provision applicable to oil terminals (33 U.S.C. §§ 1504(d)(4),
(i)(4)). Additionally, a preexisting provision of the act allows the governor of a state
adjacent to a proposed offshore LNG facility to have that facility license conform to
state environmental protection, land and water use, or coastal zone management
programs (33 U.S.C. § 1508(b)).
The USCG’s regulations regarding LNG facilities are codified throughout 33
C.F.R., with major provisions in part 127. These regulations detail the requirements
for siting applications, which include information about the proposed location,
design, construction, and operation (33 C.F.R. § 148.109). NEPA analysis is often
instrumental in siting and safety-related decisions at specific, proposed facilities and
is facilitated by the Mineral Management Service, the agency responsible for offshore
minerals extraction and the Outer Continental Shelf leasing program.106 Unlike
onshore facilities, the Coast Guard does not appear to require generally applicable
exclusion zones for offshore facilities, but relies instead on case-by-case designation
104 For a recent LNG siting application, MARAD performed financial analysis and USCG
evaluated environmental impacts; the agencies cooperated on all other aspects of the review.
(“First Offshore Terminal in U.S. is About to Secure Federal License.” Foster Natural Gas
Report. Bethesda, MD. Nov. 20, 2003. p21.
105 The statute defines natural gas to include “liquefied natural gas.” 33 U.S.C. § 1502(14).
106 Sierra B. Weaver, Note, Local Management of Natural Resources: Should Local
Governments Be Able to Keep Oil Out?, 26 HARV. ENVTL. L. REV. 231, 246 (2002).

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of safety zones.107 Additional USCG regulations include agency oversight of
emergency procedures, security, fire protection, design and construction standards
(33 C.F.R. §§ 127.109, 127.701-127.711, 127.601-127.617, 127.1101-127.1113,
149.205).
107 See 33 C.F.R. § 165, Regulated Navigation Areas and Limited Access Areas.

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