Order Code RL32073
Liquefied Natural Gas (LNG)
Infrastructure Security:
Issues for Congress
Updated June 5, 2007
Paul W. Parfomak
Specialist in Energy and Infrastructure
Resources, Science, and Industry Division

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Liquefied Natural Gas (LNG) Infrastructure Security:
Issues for Congress
Summary
Liquefied natural gas (LNG) is a hazardous fuel shipped in large tankers from
overseas to U.S. ports. LNG is also manufactured domestically and is often stored
near population centers. Because LNG infrastructure is highly visible and easily
identified, it can be vulnerable to terrorist attack. Since September 11, 2001, the U.S.
LNG industry and federal agencies have put new measures in place to respond to the
possibility of terrorism. Nonetheless, public concerns about LNG risks continue to
raise questions about LNG security. Rising natural gas prices and the possibility of
domestic shortages are sharply increasing LNG demand. Faced with the widely
perceived national need for greater LNG imports, and persistent public concerns
about LNG risks, some in Congress are examining the adequacy of security
provisions in federal LNG regulation.

LNG infrastructure consists primarily of tankers, import terminals, and inland
storage plants. There are seven active U.S. terminals and proposals for numerous
others. Potentially catastrophic events could arise from a serious accident or attack
on such facilities, such as pool or vapor cloud fires. But LNG has a record of relative
safety for the last 40 years, and no LNG tanker or land-based facility has been
attacked by terrorists. The likelihood and possible impacts from LNG attacks
continue to be debated among experts.
Several federal agencies oversee the security of LNG infrastructure. The Coast
Guard has lead responsibility for LNG shipping and marine terminal security under
provisions in the Maritime Transportation Security Act of 2002 (P.L. 107-295) and
the Security and Accountability for Every Port Act of 2006 (P.L. 109-347). The
Office of Pipeline Safety (OPS) and the Transportation Security Administration
(TSA) both have security authority for LNG storage plants within gas utilities, as
well as some security authority for LNG marine terminals. The Federal Energy
Regulatory Commission (FERC) approves the siting, with some security oversight,
of on-shore LNG marine terminals and certain utility LNG plants. The Coast Guard,
OPS and FERC have agreed to cooperate in the siting approval of new LNG
facilities, inspection and operational review of existing facilities, informal
communication, and dispute resolution.
Federal initiatives to secure LNG are still evolving, but a variety of industry and
agency representatives suggest they are reducing the vulnerability of LNG to
terrorism. As Congress continues its oversight of LNG, it may consider whether
future LNG security requirements will be appropriately funded, whether these
requirements will be balanced against evolving risks, and whether the LNG industry
is carrying its fair share of the security burden. Congress may also act to improve its
understanding of LNG security risks. Costly “blanket” investments in LNG security
might be avoided if more refined terror threat information were available to focus
security spending on a narrower set of infrastructure vulnerabilities. Finally,
Congress may initiate action to better understand the security and trade implications
of efforts to promote U.S.-flagged LNG tankers and U.S. crews. This report will be
updated as events warrant.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Scope and Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
What is LNG? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Expectations for U.S. LNG Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Overview of U.S. LNG Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LNG Tanker Ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LNG Marine Terminals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LNG Peak Shaving Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
LNG Risks and Vulnerabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Physical Hazards of LNG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Safety Record of LNG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
LNG Security Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
LNG Tanker Vulnerability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Federal LNG Security Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Security Activities of Federal Maritime Agencies . . . . . . . . . . . . . . . . . . . . 14
U.S. Coast Guard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Maritime Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Federal Pipeline Safety and Security Agencies . . . . . . . . . . . . . . . . . . . . . . 17
Office of Pipeline Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Transportation Security Administration . . . . . . . . . . . . . . . . . . . . . . . . 18
Federal Energy Regulatory Commission (FERC) . . . . . . . . . . . . . . . . 18
Federal Interagency Cooperation in LNG Security . . . . . . . . . . . . . . . . . . . 19
Industry Initiatives for Land-Based LNG Security . . . . . . . . . . . . . . . . . . . 20
Key Policy Issues in LNG Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Public Costs of LNG Marine Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Uncertainty About LNG Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Foreign vs. U.S. LNG Tankers and Crews . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
List of Figures
Figure 1. Average U.S. Natural Gas Wellhead Price ($/Mcf) . . . . . . . . . . . . . . . . 3
Figure 2. Operating and Proposed LNG Import Terminals in North America . . . 7
Figure 3. LNG Storage Sites in Utilities and Marine Terminals . . . . . . . . . . . . . . 8

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Liquefied Natural Gas (LNG) Infrastructure
Security: Issues for Congress
Introduction
Liquefied natural gas (LNG) facilities are receiving a great deal of public
attention due to their increasingly important role in the nation’s energy infrastructure
and their potential vulnerability to terrorist attack. LNG has long been important to
U.S. natural gas markets, although energy economics and public perceptions about
LNG risks have limited the industry’s growth. Concerns about rising natural gas
prices and the possibility of domestic gas shortages have been driving up demand for
LNG imports. But LNG is a hazardous1 liquid transported and stored in large
quantities. Consequently, LNG infrastructure may directly impact the security of
communities where this infrastructure is located. Faced with the widely perceived
national need for greater LNG imports, and persistent public concerns about LNG
risks, some in Congress are examining the adequacy of security provisions in federal
LNG regulation.2
This report provides an overview of industry and federal activities related to
LNG security. The report describes U.S. LNG infrastructure, the industry’s safety
record and security risks, and the industry’s security initiatives since September 11,
2001. It summarizes recent changes in federal LNG and maritime security law and
related changes in the security roles of federal agencies. The report discusses several
policy concerns related to federal LNG security efforts: 1) public costs of marine
security, 2) uncertainty regarding LNG terrorism risks, and 3) security implications
of building offshore LNG facilities.
Scope and Limitations
This report focuses on industry and federal activities in LNG infrastructure
security. The report includes some discussion of state and local agency activities as
they relate to federal efforts, but does not address the full range of state and local
issues of potential interest to policy makers. The report also focuses on shipping,
marine terminals and land-based storage facilities within gas utilities; it does not
address LNG trucking, special purpose LNG facilities, or LNG-fueled vehicles. The
1 49 CFR 172.101. List of Hazardous Materials. Office of Hazardous Materials Safety,
Department of Transportation.
2 See, for example: U.S. Representative Edward J. Markey. “Rep. Markey Issues Statement
on Romney LNG Terminals Approval.” Press release. December 19, 2006; Funkhouser, D.
“Agency Backs LNG Terminal Report Says Facility in Sound Would Be Safe; Foes Vow
to Fight.” The Hartford Courant. November 18, 2006.

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report discusses activities in LNG safety only as they relate to security. For further
discussion of LNG terminal safety, see CRS Report RL32205, Liquefied Natural Gas
(LNG) Terminals: Siting, Safety and Regulation, by Paul Parfomak and Adam Vann.
Background
What is LNG?
When natural gas is cooled to temperatures below minus 260EF it condenses
into liquefied natural gas, or “LNG.”3 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 by ship or truck. 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 2006, LNG imports to the United States originated primarily in Trinidad and
Tobago (67% percent), Egypt (20% percent), Nigeria (10% percent), and Algeria (3%
percent). In recent years, some LNG shipments have also come from Malaysia,
Qatar, Oman, Australia, and other countries.4 Brunei, Indonesia, Libya, 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 Growth
The United States has used LNG commercially since the1940s. Initially, LNG
facilities stored domestically produced natural gas to supplement pipeline supplies
during times of high gas demand. In the 1970s LNG imports began to supplement
domestic production. Due primarily to low domestic gas prices, LNG imports stayed
relatively small — accounting for only 1% of total U.S. gas consumption in 2002.5
In countries with limited domestic gas supplies, however, LNG imports grew
dramatically over the same period. Japan, for example, imported 97% of its natural
gas supply as LNG in 2002, over 11 times as much LNG as the United States.6 South
Korea, France, Spain, and Taiwan also became heavy LNG importers.
Natural gas demand has accelerated in the United States over the last several
years due to environmental concerns about other energy sources, growth in natural
3 Natural gas typically consists of at least 80% methane, although LNG is usually over 90%
methane. It may also contain other hydrocarbon gases (e.g., propane) and nitrogen.
4 Energy Information Administration (EIA). Natural Gas Year-In-Review 2006. Washington,
DC, March 2007. p. 5.
5 Energy Information Administration (EIA). Natural Gas Annual 2005. Tables 1 and 9.
November 16, 2006.
6 Energy Information Administration (EIA). “World LNG Imports by Origin, 2002.”
Washington, DC. October 2003.

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gas-fired electricity generation, and historically low gas prices. Supply has not been
able to keep up with demand, however, so gas prices have recently become high and
volatile. As Figure 1 shows, average annual gas prices at the wellhead have risen
from between $1.50 and $2.50/Mcf (“thousand cubic feet”) through most of the
1990s to a peak above $7.00/Mcf in 2005. At the same time, international prices for
LNG have fallen because of increased supplies and lower production and
transportation costs, making LNG more competitive with domestic natural gas.
While cost estimation is speculative, some industry analysts believe that LNG can be
economically delivered to U.S. pipelines for between $2.25 to $4.15/Mcf, depending
upon the source.7
Figure 1. Average U.S. Natural Gas Wellhead Price ($/Mcf)
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$-
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Energy Information Administration. “U.S. Natural Gas Wellhead Price.” Internet database.
Updated Jan. 4, 2007. [http://tonto.eia.doe.gov/dnav/ng/hist/n9190us3m.htm]
In 2003 testimony before the House Energy and Commerce Committee, the
Federal Reserve Chairman, Alan Greenspan, called for a sharp increase in LNG
imports to help avert a potential barrier to U.S. economic growth. According to Mr.
Greenspan’s testimony
... notable cost reductions for both liquefaction and transportation of LNG ... and
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.8
7 Donnelly, M. “LNG as Price Taker.” Public Utilities Fortnightly. November 1, 2006.
8 Greenspan, Alan, Chairman, U.S. Federal Reserve Board. “Natural Gas Supply and
Demand Issues.” Testimony before the House Energy and Commerce Comm. June 10, 2003.

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If current natural gas trends continue, the Energy Information Administration (EIA)
projects U.S. LNG imports to account for approximately 17% of total U.S. gas supply
in 2030.9
Overview of U.S. LNG Infrastructure
The physical infrastructure of LNG consists of interconnected transportation and
storage facilities, each with distinct physical characteristics affecting operational risks
and security needs. This overview focuses on the three major elements of this
infrastructure: tanker ships, marine terminals, and storage facilities.
LNG Tanker Ships
LNG is transported to the United States in very large, specially designed tanker
ships. LNG tankers are double hulled, containing several massive refrigerated tanks,
each sealed and insulated to maintain safe LNG temperature and prevent leakage
during transit. There are currently 200 tankers in service around the world, with a
combined cargo capacity of over 24 million cubic meters of LNG, equivalent to over
eight times the average daily U.S. natural gas consumption in 2006. Over 100
additional tankers are on order.10 There are no U.S.-flagged LNG tankers.
LNG Marine Terminals
LNG tankers unload their cargo at dedicated marine terminals which store and
regasify the LNG for distribution to domestic markets. Onshore terminals typically
consist of docks, LNG handling equipment, storage tanks, and interconnections to
regional gas transmission pipelines. As discussed later in the report, the siting of
onshore LNG import terminals is regulated by the Federal Energy Regulatory
Commission (FERC). There are six active onshore LNG terminals in the United
States:
! Everett, Massachusetts. The Everett terminal is located across the
Mystic River from Boston; tankers must pass through Boston harbor
to reach it. The terminal serves gas utilities and electric power
producers in New England. The terminal receives approximately 65
LNG shipments annually.11
! Lake Charles, Louisiana. The Lake Charles terminal is located
approximately nine miles southwest of the city of Lake Charles near
9 Energy Information Administration (EIA). Annual Energy Outlook 2007 (Early Release).
DOE/EIA-0383(2007). Table A13. December 2006. p25.
10 Ahsan, M. F. “LNG Re-enters the World Energy Market.” Pipeline & Gas Journal. Nov
1, 2006. p. 52.
11 Department of Energy, Office of Fossil Energy (OFE). “Imports of Liquefied Natural Gas
(LNG).” Unpublished data. Washington, D.C. January 11, 2007.

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the Gulf of Mexico. The terminal completed a major expansion in
2006, allowing it to receive up to 175 shipments per year.12
! Cove Point, Maryland. Cove Point is located on the Chesapeake
Bay 60 miles southeast of Washington, DC. Under federally
approved expansion plans, the terminal could receive up to 200
shipments per year by 2008.13
! Elba Island, Georgia. The Elba Island terminal is located on an
island five miles down the Savannah River from Savannah, Georgia
and ten miles from the Atlantic coast. The terminal completed a
major expansion in 2006, allowing it to receive approximately 118
shipments per year.14
! Peñuelas, Puerto Rico. The Peñuelas terminal, located on the
southern coast of Puerto Rico. The terminal is dedicated to fueling
an electric generation plant which supplies 20% of Puerto Rico’s
power.15 The terminal receives 10 to 15 LNG shipments annually.16
! Kenai, Alaska. Built in 1969, this is the oldest LNG marine
terminal in the United States and the only one built for export (to
Japan). The Kenai terminal is located in Nikiski near the Cook Inlet
gas fields. Since 1969 the terminal has exported an average of
approximately 34 LNG shipments each year.17
Offshore LNG terminals connect to land only by underwater pipelines. These
offshore terminal designs seek to avoid community opposition, permitting, and
operating obstacles which have hindered the construction of new on-shore LNG
terminal facilities. Because offshore terminals would be located far from land, they
also would present fewer security risks than on-shore LNG terminals. Offshore
terminals do present environmental concerns, however, if they use seawater for
regasification. Such a process cools the waters in a terminal’s vicinity with potential
impacts on the local ecosystem due to the lower water temperatures.18 Offshore LNG
terminals also employ new engineering systems, so they may also need to overcome
12 “Second Trunkline LNG Terminal Expansion Up and Running.” Inside F.E.R.C. July 31,
2006. p. 12; Federal Register, vol. 67, no. 34, February 20, 2002, p. 7684.
13 Federal Energy Regulatory Commission (FERC). “Order Issuing Certificates and Granting
Section 3 Authority.” Issued June 16, 2006. Docket No. CP05-130-000, et al. p. 71.
14 “El Paso Corporation Announces Start of Service From Elba II Expansion.” PR Newswire.
February 1, 2006; Federal Register, vol. 67, no. 181, September 18, 2002, p. 58784.
15 “Gas Natural Acquires Enron’s 50% Stake in 540-MW Gas Plant in Puerto Rico.” Platt’s
Global Power Report. McGraw-Hill. July 10, 2003. p11.
16 OFE. January 11, 2007.
17 Marathon Oil Corporation. 2003 Annual Report. Houston. March 8, 2004. p11.
18 O’Driscoll, M. “LNG: Shell’s Gulf Landing Offshore Project Gets Green Light.”
Greenwire. E&E Publishing, LLC. Washington, D.C. Feb 18, 2005.

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technical challenges associated with their floating designs. As discussed later in the
report, offshore LNG terminals are regulated jointly by the Maritime Administration
(MARAD) and the U.S. Coast Guard. There is currently one active offshore LNG
terminal in U.S. waters:
! Gulf of Mexico, Louisiana. The Gulf Gateways (Energy Bridge)
terminal was completed in 2004 and received its first LNG shipment
in March, 2005. The terminal consists of an offshore gas pipeline
buoy system and is served by specialized tankers which regasify
their LNG cargoes on board. The terminal expects up to be able to
serve up to 60 LNG shipments per year.19
In addition to these active terminals, developers have proposed over 70 new
LNG import terminals to serve the U.S. market. A number of these proposals have
been withdrawn due to siting problems, financing problems, or other reasons. Many
others are well-advanced, however, with recent or pending federal permit approvals.
Figure 1 shows summary information for active LNG terminal proposals located in
North America.
19 Natural Gas Intelligence. “Energy Bridge Terminal Prepares for First 3 Bcf LNG Delivery
This Month.” Intelligence Press, Inc. March 7, 2005.

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Figure 2. Operating and Proposed LNG Import Terminals in North America
Source: Federal Energy Regulatory Commission (FERC), at [http://www.ferc.gov/industries/lng.asp], updated February 16, 2007.

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LNG Peak Shaving Plants
Many gas distribution utilities rely on “peak shaving” LNG plants to supplement
pipeline gas supplies during periods of peak demand during winter cold snaps. The
LNG is stored in large refrigerated tanks integrated with the local gas pipeline
network. The largest facilities usually liquefy natural gas drawn directly from the
interstate pipeline grid, although many smaller facilities without such liquefaction
capabilities receive LNG by truck. LNG tanks are generally surrounded by
containment impoundments which limit the spread of an LNG spill and the potential
size of a resulting vapor cloud.20 LNG peak shaving plants are often located near the
populations they serve, although many are in remote areas away from people.
According to the Energy Information Administration (EIA) there were
approximately 100 active LNG storage facilities in the United States distributed
among approximately 55 utilities as of August, 2005.21 These facilities are mostly
in the Northeast where pipeline capacity and underground gas storage have
historically been constrained. Figure 3 shows the locations of U.S. LNG storage
facilities within utilities and on-shore terminals.22
Figure 3. LNG Storage Sites in Utilities and Marine Terminals
Source: Energy Information Administration.
20 California Energy Commission (CEC). Liquefied Natural Gas in California: History,
Risks and Siting. No. 700-03-005. Sacramento, CA. July 17, 2003. p. 5.
21 Department of Energy (DOE). LNG: Understanding the Basic Facts. August 2005. p. 7.
22 Figure 3 excludes seven small sites associated with vehicular fuel or niche applications.

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LNG Risks and Vulnerabilities
The safety hazards associated with LNG terminals have been debated for
decades. A 1944 accident at one of the nation’s first LNG facilities killed 128 people
and initiated public fears about LNG hazards which persist today.23 Technology
improvements and standards since the 1940s have made LNG facilities much safer,
but serious hazards remain since LNG is inherently volatile and is usually shipped
and stored in large quantities. A January 2004 accident at Algeria’s Skikda LNG
terminal which killed or injured over 100 workers has added to the ongoing
controversy over LNG facility safety.24 Because LNG infrastructure is highly visible
and easily identified, it is also potentially vulnerable to terrorist attack.
Physical Hazards of LNG
Natural gas is combustible, so an uncontrolled release of LNG poses a serious
hazard of explosion or fire. LNG also poses hazards because it is extremely cold.
Experts have identified several potentially catastrophic events that could arise from
an LNG release. The likelihood and severity of these events have been the subject
of considerable research and analysis. While open questions remain about the
impacts of specific hazards in an actual accident, there appears to be consensus as to
what the greatest LNG 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.25 The resulting “pool fire” would spread as the LNG pool
expanded away from its source and continued evaporating. Such
pool fires are intense, burning far more hotly and rapidly than oil or
gasoline fires.26 They cannot be extinguished — all the LNG must
be consumed before they go out. Because LNG pool fires are so hot,
their thermal radiation may injure people and damage property a
considerable distance from the fire itself. Many experts agree that
a pool fire, especially on water, is the most serious LNG hazard.27
! Flammable vapor clouds. If LNG spills but does not immediately
ignite, the evaporating natural gas will form a vapor cloud that may
drift some distance from the spill site. If the cloud subsequently
encounters an ignition source, those portions of the cloud with a
combustible gas-air concentration will burn. Because only a fraction
23 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.
24 Junnola, J., et al. “Fatal Explosion Rocks Algeria’s Skikda LNG Complex.” Oil Daily.
January 21, 2004. p. 6.
25 Methane, the main component of LNG, burns in gas-to-air ratios between 5% and 15%.
26 Havens, J. “Ready to Blow?” Bulletin of the Atomic Scientists. July/August 2003. p. 17.
27 Havens. 2003. p. 17.

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of such a cloud would have a combustible gas-air concentration, the
cloud would not likely explode all at once, but the fire could still
cause considerable damage. An LNG vapor cloud fire would
gradually burn its way back to the LNG spill where the vapors
originated and would continue to burn as a pool fire.28 If an LNG
tank failed due to a collision or terror attack, experts believe the
failure event itself would likely ignite the LNG pool before a large
vapor cloud could form.29 Consequently, they conclude that large
vapor cloud fires are less likely than instantaneous pool fires.
! Flameless explosion. If LNG spills on water, it could theoretically
heat up and regasify almost instantly in a “flameless explosion” (also
called a “rapid phase transition”). While the effects of tanker-scale
spills have not been studied extensively, Shell Corporation
experiments with smaller LNG spills in 1980 did not cause flameless
explosions. Even if there were a flameless explosion of LNG,
experts believe the hazard zones around such an event “would not
be as large as either vapor cloud or pool fire hazard zones.”30
In addition to these catastrophic hazards, an LNG spill poses hazards on a
smaller scale. An LNG vapor cloud is not toxic, but could cause asphyxiation by
displacing breathable air. Such clouds rise in air as they warm, however, diminishing
the threat to people on the ground. Alternatively, extremely cold LNG could injure
people or damage equipment through direct contact. 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 (as crude oil does).31
Safety Record of LNG
The LNG tanker industry claims a record of relative safety over the last 45
years; since international LNG shipping began in 1959, tankers reportedly have
carried over 45,000 LNG cargoes without a serious accident at sea or in port.32 LNG
tankers have experienced groundings and collisions during this period, but none has
resulted in a major spill.33 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
28 Quillen, D. ChevronTexaco Corp. “LNG Safety Myths and Legends.” Presentation to the
Natural Gas Technology Conference. Houston, TX. May 14-15, 2002. p. 18.
29 Havens. 2003. p. 17.
30 Havens. 2003. p. 17.
31 Quillen. 2002. p. 28.
32 Gray, T. “LNG Shipping Boom Sparks Safety Warning: Expert Cautions on Falling
Standards and Crew Shortages.” Lloyd’s List. June 21, 2006. p. 1.
33 Gray, T. 2006.; CH-IV International. Safety History of International LNG Operations. TD-
02109. Millersville, MD. July, 2004. pp. 13-18.

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to accidental spills than single-hulled oil and fuel tankers like the Exxon Valdez,
which caused a major Alaskan oil spill after grounding in 1989.34 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.35
The safety record of onshore LNG terminals is more mixed. There are more
than 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
a 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.36 The
Skikda accident did not injure the rest of the 12,000 workers at the complex, but it
was considered the worst petrochemical plant fire in Algeria in over 40 years.37
According to press reports, the accident resulted from poor maintenance rather than
a facility design flaw.38 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.39
LNG Security Risks
LNG tankers and land-based facilities may be vulnerable to terrorism. Tankers
could be physically attacked to destroy their cargo — or commandeered for use as
weapons against coastal targets. Land-based LNG facilities could also be physically
attacked with explosives or through other means. Alternatively, computer control
systems could be “cyber-attacked,” or both physical and cyber attack could happen
at the same time. Some LNG facilities could also be indirectly disrupted by other
types of terror strikes, such as attacks on regional electricity grids or communications
networks, which could in turn affect dependent LNG control and safety systems.40
Since LNG is fuel for power plants, heating, military bases, and other uses, disruption
of LNG shipping or storage poses additional “downstream” risks, especially in more
LNG-dependent regions like New England.
34 Society of International Gas Tanker & Terminal Operators Ltd. (SIGTTO). “Safe Havens
for Disabled Gas Carriers.” Third Edition. London. February 2003. pp. 1-2.
35 Petroplus International, N.V. “Energy for Wales: LNG Frequently Asked Questions.”
Internet home page. Amsterdam, Netherlands. August 4, 2003.
36 Junnola, J., et al. January 21, 2004. p. 6.
37 Hunter, C. “Algerian LNG Plant Explosion Sets Back Industry Development.” World
Markets Analysis. January 21, 2004. p. 1.
38 Antosh, N. “Vast Site Devastated.” Houston Chronicle. January 21, 2004. p. B1.
39 CH-IV International. pp. 6-12.
40 Skolnik, S. “Local Sites Potential Targets for Cyberterror.” Seattle Post-Intelligencer.
Seattle, WA. September 2, 2002.

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LNG Tanker Vulnerability. LNG tankers cause the most concern among
security analysts because they are potentially more accessible than fixed terminal
facilities, because they may transit nearer to populated areas, and because LNG spills
from tankers could be more difficult to control. According to a December 2004
report by Sandia National Laboratories, an intentional LNG spill and resulting fire
could cause “major” injuries to people and “significant” damage to structures within
approximately 500 meters (0.3 mile) of the spill site, more moderate injuries and
structural damage up to 1,600 meters (1.0 mile) from the spill site, and lower impacts
out to 2,500 meters (1.5 miles).41 These results are used by federal agencies in
reviewing LNG terminal siting applications.
Other LNG hazard studies have reached somewhat different conclusions about
LNG tanker vulnerability. A report by the Government Accountability Office (GAO)
released in February 2007 reviewed six unclassified studies of LNG tanker hazards,
including the Sandia study. The GAO report concluded that42
Because there have been no large-scale LNG spills or spill experiments, past
studies have developed modeling assumptions based on small-scale spill data.
While there is general agreement on the types of effects from an LNG spill, the
results of these models have created what appears to be conflicting assessments
of the specific consequences of an LNG spill, creating uncertainty for regulators
and the public.
Following the GAO report, Members of Congress have expressed continuing concern
about the uncertainty associated with LNG tanker vulnerability and hazard analysis.43
According to the GAO, the Department of Energy has funded research (to be
completed in 2008) involving large-scale LNG fire experiments addressing some of
the hazard modeling uncertainties identified in its report.44 It remains to be seen to
what degree the DOE’s research will increase policy makers’ confidence in LNG
tanker vulnerability analyses.
41 Sandia National Laboratories (SNL). Guidance on Risk Analysis and Safety Implications
of a Large Liquefied Natural Gas (LNG) Spill Over Water. SAND2004-6258. Albuquerque,
NM. December 2004. p. 54.
42 Government Accountability Office (GAO). Maritime Security: Public Safety
Consequences of a Terrorist Attack on a Tanker Carrying Liquefied Natural Gas Need
Clarification. GAO-07-316. February 2007. p. 22.
43 See, for example, Senator Barbara A. Mikulski, testimony before the House
Transportation and Infrastructure Committee, Coast Guard and Maritime Transportation
Subcommittee field hearing on the Safety and Security of Liquefied Natural Gas and the
Impact on Port Operations. Baltimore, MD. April 23, 2007.
44 GAO. Februray 2007. p. 6.

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The Gaz Fountain Attack

Although there have been no terrorist attacks on LNG tankers, there is at least one
documented case of a gas tanker of similar construction being attacked in wartime.
During the Iran-Iraq War in the 1990s, the double-hulled LPG tanker Gaz Fountain was
fired upon by an Iranian aircraft using three air-to-ground, armor-piercing Maverick
missiles. Two of the missiles exploded on or above the ship’s deck, causing relatively
minor damage. The third missile penetrated the deck and exploded above a butane
storage tank, opening a 6 square-meter (65 square-foot) hole in the roof of the tank. The
escaping gas ignited, establishing a large fire on deck above the missile entry hole. The
fire aboard the Gaz Fountain was successfully extinguished by a salvage ship, her
remaining cargo was successfully unloaded to another tanker, and she was eventually
repaired.45

The Gaz Fountain attack and salvage provides some evidence as to the robustness of
double-hulled gas tankers like those that carry LNG. But the relatively benign outcome
in the Gaz Fountain attack does not necessarily demonstrate that attacks on LNG tankers
would have similarly limited impacts. The Gaz Fountain was fortunate that its storage
tank was breached only at the top. If missiles had been targeted at the hull of the ship
rather than its deck, one might have penetrated the side of a storage tank, causing a major
spill on water and an inextinguishable pool fire. Furthermore, if the gas involved had
been LNG rather than butane, the Gaz Fountain might have been subject to cryogenic
damage since LNG is transported at a much lower temperature than butane (-260EF vs.
+25EF). According to the Sandia report, such a combination could lead to cascading
failure of adjacent storage tanks and, presumably, an even larger fire.46
Federal LNG Security Initiatives
Operators of LNG infrastructure had security programs in place prior to
September 11, 2001, but these programs mostly focused on personnel safety and
preventing vandalism. The terror attacks of September 11 focused attention on the
vulnerability of LNG infrastructure to different threats, such as systematic attacks on
LNG facilities by foreign terrorists. Consequently, both government and industry
have taken new initiatives to secure LNG infrastructure in response to new threats.
Several federal agencies oversee the security of LNG infrastructure. The Coast
Guard has lead responsibility for LNG shipping and marine terminal security. The
Department of Transportation’s Office of Pipeline Safety and the Department of
Homeland Security’s Transportation Security Administration have security authority
for peak-shaving plants within gas utilities, as well as some security authority for
LNG marine terminals. FERC has siting approval responsibility, with some security
oversight, for land-based LNG marine terminals and certain peak-shaving plants. In
addition to federal agencies, state and local authorities, like police and fire
departments, also help to secure LNG.
45 Carter, J.A. “Salvage of Cargo from the War-Damaged Gaz Fountain.” Proceedings of
the Gastech 85 LNG/LPG Conference. Nice, France. November 12-15, 1985.
46 SNL. December 2004. p. 151.

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CRS-14
Security Activities of Federal Maritime Agencies
The two federal agencies with the most significant roles in maritime security as
it relates to LNG are the U.S. Coast Guard and the Maritime Administration.
U.S. Coast Guard. The Coast Guard is the lead federal agency for U.S.
maritime security, including port security. Among other duties, the Coast Guard
tracks, boards, and inspects commercial ships approaching U.S. waters. A senior
Coast Guard officer in each port oversees the security and safety of vessels,
waterways, and many shore facilities in his geographic area.47 The Coast Guard
derives its security responsibilities under the Ports and Waterways Safety Act of 1972
(P.L. 92-340) and the Maritime Transportation Security Act of 2002 (P.L. 107-295).
Maritime security regulations mandated by P.L.107-295 are discussed below. Under
P.L.107-295 the Coast Guard and the Maritime Administration share siting approval
authority for offshore LNG terminals.
Shortly after September 11, 2001, the Coast Guard began to systematically
prioritize protection of ships and facilities, including those handling LNG, based on
vulnerability assessments and the potential consequences of security incidents. The
Coast Guard evaluated the overall susceptibility of marine targets, their use to
transport terrorists or terror materials, and their use as potential weapons. In
particular, the Coast Guard evaluated the vulnerability of tankers to “a boat loaded
with explosives” or “being commandeered and intentionally damaged.”48 While the
assessments focused on Coast Guard jurisdictional vessels and facilities, some
scenarios involved other vital port infrastructure like bridges, channels, and tunnels.49
The Coast Guard used these assessments in augmenting security of key maritime
assets and in developing the agency’s new maritime security standards.
The Coast Guard began increasing LNG tanker and port security immediately
after September 11, 2001. For example, the Coast Guard suspended LNG shipments
to Everett for several weeks after the terror attacks to conduct a security review and
revise security plans.50 The Coast Guard also worked with state, environmental and
police marine units to establish 24-hour patrols in Boston harbor.51 In July 2002, the
Coast Guard imposed a 1,000-yard security zone around the Kenai LNG terminal —
and subsequently imposed similar zones around other U.S. LNG terminals.52 The
47 For more information about maritime and port security, see CRS Report RL31733, Port
and Maritime Security: Background and Issues for Congress, by John F. Frittelli.
48 68FR126. July 1, 2003. p. 39244.
49 Ibid., p. 39246.
50 McElhenny, J. “Coast Guard Lifts Ban of Natural Gas Tankers in Boston Harbor.”
Associated Press. October 16, 2001.
51 Crittenden, J. “Vigilance: Holiday Puts Spotlight on Harbor Security.” Boston Herald.
Boston, MA. June 30, 2002. p. 1.
52 “LNG Security in Boston to Be Permanent.” Platt’s Oilgram News. New York, NY.
August 1, 2002.

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Coast Guard also reassessed security at the Cove Point terminal before allowing LNG
shipments to resume there for the first time since 1980.53
The most heavily secured LNG shipments are those bound for the Everett
terminal because they pass through Boston harbor. Depending upon the level of
alert, the Coast Guard and local law enforcement agencies may put in place numerous
security provisions for these shipments, including:
! Inspection of security and tanker loading at the port of origin in
Trinidad.
! On-board escort to Boston by Coast Guard “sea marshals.”
! 96-hour advanced notice of arrival of an LNG tanker.
! Advance notification of local police, fire, and emergency agencies,
as well as the Federal Aviation Administration and the U.S. Navy.
! Boarding of the LNG tanker for inspection prior to entering Boston
harbor.
! Harbor escort by armed patrol boats, cutters, or auxiliary vessels.
! Enforcement of a security zone closed to other vessels two miles
ahead and one mile to each side of the LNG tanker.
! Suspension of overflights by commercial aircraft at Logan airport.
! Inspection of adjacent piers for bombs by police divers.
! Posting of sharpshooters on nearby rooftops.
! Additional security measures which cannot be disclosed publicly.54
According to the Coast Guard, such security provisions have been in place for the
other U.S. LNG terminals as well, depending upon local assessments of security risk
and the unique characteristics of each marine area.55
On October 22, 2003, the Coast Guard issued final rules to implement the new
security requirements mandated by P.L. 107-295. The rules are codified in Title 33
of the Code of Federal Regulations, Chapter 1, Subchapter H. Among other
provisions, the rules establish Coast Guard port officers as maritime security
coordinators and set requirements for maritime area security plans and committees.
The rules require certain owners or operators of marine assets to designate security
officers, perform security assessments, develop and implement security plans, and
comply with maritime security alert levels. The vessel rules apply to all LNG tankers
entering U.S. ports. Facility rules apply to all land-based U.S. LNG terminals or
proposed offshore LNG terminals. Finally, the rules require certain vessels,
including LNG tankers, to carry an automatic identification system.
53 “Coast Guard, Mikulski Clear Plan to Reactivate Cove Point LNG Plant.” Platt’s Inside
FERC. Washington, DC. January 6, 2003. p. 5.
54 Greenway, H.D.S. “Is it Safe?” The Boston Globe Magazine. July, 27, 2003; Lin, J. and
Fifield, A. “Risky Business?” The Philadelphia Enquirer. February 20, 2005. p. 1.
55 O’Malley, Mark, Chief, Ports and Facilities Activities, U.S. Coast Guard. Testimony
before the House Committee on Transportation and Infrastructure, Subcommittee on Coast
Guard and Maritime Transportation hearing on the Safety and Security of Liquid Natural
Gas. May 7, 2007; U.S. Coast Guard, Boston, MA, Captain of the Port. Personal
communication. March 22, 2007.

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The Coast Guard also has authority to review, approve, and verify security plans
for marine traffic around proposed LNG marine terminals as part of the overall siting
approval process led by FERC. The Coast Guard is responsible for issuing a Letter
of Recommendation regarding the suitability of waterways for LNG vessels serving
proposed terminals. The Coast Guard acts as a cooperating agency in the evaluation
of LNG terminal siting applications.56
The Coast Guard has also led the International Maritime Organization (IMO)
in developing maritime security standards outside U.S. jurisdiction.57 These
standards, the International Ship and Port Facility Security Code (ISPS Code) contain
detailed mandatory security requirements for governments, port authorities and
shipping companies, as well as recommended guidelines for meeting those
requirements. The ISPS Code is intended to provide a standardized, consistent
framework for governments to evaluate risk and to “offset changes in threat with
changes in vulnerability.”58 The Coast Guard considers the new ISPS Code “to
reflect the current industry, public and agency concerns.”59
On October 13, 2006, President Bush signed the Security and Accountability for
Every Port Act of 2006 (P.L. 109-347). While not addressing LNG security
specifically, the act includes general maritime security provisions which could apply
to LNG vessels and facilities. These provisions include, among others, requirements
relating to maritime facility security plans (Sec. 102); unannounced inspections of
maritime facilities (Sec. 103); long-range vessel tracking (Sec. 107); operational
centers for port security (Sec. 108); port security grants (Sec. 112); and training and
exercise programs (Sec. 112-113). The Coast Guard is the federal agency primarily
responsible for implementing these provisions.
Maritime Administration. The Maritime Administration (MARAD) within
the Department of Transportation has as it stated mission “to strengthen the U.S.
maritime transportation system - including infrastructure, industry and labor - to meet
the economic and security needs of the Nation.”60 As noted above, under P.L.107-
295, MARAD shares siting approval authority for offshore LNG terminals with the
Coast Guard. Among other activities, the agency also administers its Maritime
Security Program “to maintain an active, privately owned, U.S.-flag, and U.S.-crewed
liner fleet in international trade.”61 Consistent with this mission, Congress passed the
56 U.S. Coast Guard. U.S. Coast Guard Captain of the Port Long Island Sound Waterways
Suitability Report for the Proposed Broadwater Liquefied Natural Gas Facility. September
21, 2006. p.2. [http://www.uscg.mil/d1/units/seclis/broadwater/wsrrpt/WSR%20Master
%20Final.pdf]
57 68FR126. July 1, 2003. p. 39241.
58 International Maritime Organization (IMO). “IMO Adopts Comprehensive Maritime
Security Measures.” Press release. London. December 17, 2002.
59 68FR126. July 1, 2003. p. 39241
60 Maritime Administration (MARAD). “MARAD Mission, Goals and Vision.” Web page.
January 17, 2007. [http://www.marad.dot.gov/welcome/mission.html]
61 Maritime Administration (MARAD). “MARAD Fact Sheet.” January 17, 2006. p. 2.
(continued...)

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Coast Guard and Maritime Transportation Act of 2006 (P. L. 109 — 241) directing
MARAD to implement a program to promote the transportation of LNG to domestic
terminals in U.S. flag vessels (Sec. 304(a)). The act also directs the agency to give
top priority to the processing of offshore LNG siting applications that will be
supplied by U.S. flag vessels (Sec. 304(b). The act also requires the agency to
consider the nation of registry for, and the nationality or citizenship of, officers and
crew serving on board LNG tankers when reviewing an LNG terminal siting
application (Sec. 304(c)). MARAD published in the Federal Register a notice
seeking public comment on these provisions on January 17, 2007.62
Federal Pipeline Safety and Security Agencies
Office of Pipeline Safety. The Office of Pipeline Safety (OPS) within the
Pipeline and Hazardous Materials Safety Administration (PHMSA) of the
Department of Transportation has statutory authority to regulate the safety and
security of LNG peak-shaving plants. The agency derives this authority under the
Natural Gas Pipeline Safety Act of 1968 (P.L. 90-481). The OPS security regulations
for LNG peak-shaving facilities are found in 49 CFR 193, Liquefied Natural Gas
Facilities: Federal Safety Standards (Subpart J-Security). These regulations govern
security procedures, protective enclosures, communications, monitoring, lighting,
power sources, and warning signs. Federal LNG safety regulations (33 CFR 127) and
National Fire Protection Association standards for LNG also include provisions
addressing security, such as requirements for monitoring facilities and preparing
emergency response plans.63
On December, 28, 2006, the OPS published in the Federal Register a security
advisory for LNG facility operators after an August, 2006 security breach at an LNG
peak-shaving plant in Lynn, MA.64 Although not a terrorist incident, the security
breach involved the penetration of intruders through several security barriers and
alert systems, permitting them to access the main LNG storage tank at the facility.
The OPS advisory recommends that LNG facility operators ensure alarms and
monitoring devices are functioning; ensure security personnel are properly trained;
determine whether security personnel can respond to security breaches in a timely
manner; update security procedures to incorporate the most relevant threat
61 (...continued)
[http://www.marad.dot.gov/Headlines/factsheets/PDF%20Versions/Mission%20Fact%2
0Sheet.pdf]
62 Maritime Administration (MARAD). “Utilization of U.S. Vessels and Mariners in the
Marine Transportation of Liquefied Natural Gas.” Docket No. MARAD — 2007 — 26841.
Federal Register. Vol. 72, No. 10. January 17, 2007. p. 2086.
63 National Fire Protection Association (NFPA). Standard for the Production, Storage, and
Handling of Liquefied Natural Gas (LNG). NFPA 59A. Quincy, MA.
64 Pipeline and Hazardous Materials Safety Administration (PHMSA). “Pipeline Safety:
Lessons Learned From a Security Breach at a Liquefied Natural Gas Facility.” Docket No.
PHMSA — 04 — 19856. Federal Register. Vol. 71. No. 249. December 28, 2006. p. 78269.

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information; confirm that personnel properly coordinate their security activities; and
independently audit facility security or conduct.65
Transportation Security Administration. The Transportation Security
Administration (TSA) is the lead federal authority for the security of the interstate
gas pipeline network under the Natural Gas Pipeline Safety Act of 1968 (P.L. 90-
481). This security authority was transferred to TSA from the Transportation
Department’s Office of Pipeline Safety (OPS) under the Aviation and Transportation
Security Act of 2001(P.L. 107-71). The TSA has asserted its security authority over
land-based LNG facilities that are considered an integral part of the interstate pipeline
network.66 The TSA exercises its pipeline and LNG security oversight through the
Pipeline Security Program Office (PSPO) within the agency’s Intermodal Security
Program Office. In this capacity, the TSA expects pipeline and jurisdictional LNG
facility operators to maintain security plans based on the OPS/industry consensus
security guidance.
Since 2003, TSA has visited the largest 60 interstate pipeline operators and
distribution utilities, including some with LNG plants, to review their security plans.
According to TSA, virtually all of the companies reviewed through 2006 had
developed security plans, identified critical assets, and conducted background checks
on new employees. Most had also implemented employee security training programs
and raised local community and law enforcement awareness of pipeline security as
part of their emergency response obligations. The TSA reviews also identified
inadequacies in some company security programs such as poor access controls,
deficient security equipment, lack of real-time threat information, and irregular
security exercises.67 In October 2005, TSA issued an overview of recommended
security practices for pipeline operators “for informational purposes only ... not
intended to replace security measures already implemented by individual
companies.”68 The agency released revised guidance on security best practices at the
end of 2006.
Federal Energy Regulatory Commission (FERC). The FERC is
responsible for permitting new land-based LNG facilities, and for ensuring the safe
operation of these facilities through subsequent inspections.69 The initial permitting
process requires approval of safety and security provisions in facility design, such as
hazard detectors, security cameras, and vapor cloud exclusion zones. Every two
years, FERC staff inspect LNG facilities to monitor the condition of the physical
65 Ibid.
66 TSA, Intermodal Security Program Office. Personal communication. August 18, 2003.
67 TSA, Intermodal Security Program Office, personal communication, August 30, 2006;
Fox, J., TSA, Intermodal Security Program Office, presentation to the DGC Homeland
Security Conference, Alexandria, VA, December 7, 2005. pp. 18-20.
68 TSA, Intermodal Security Program Office, Pipeline Security Best Practices, October 19,
2005, p. 1.
69 U.S. Code of Federal Regulations. 18 CFR 157.

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plant and inspect changes from the originally approved facility design or operations.70
The FERC derives its LNG siting authority under the Natural Gas Act of 1938 (15
USC 717). The agency has jurisdiction over all on-shore LNG marine terminals and
12 peak-shaving plants involved in interstate gas trade.71
In response to public concern about LNG plant security since September 11,
2001, FERC has emphasized the importance of security at LNG facilities. According
to the commission, FERC staff played key roles at inter-agency technical conferences
regarding security at the Everett and Cove Point LNG terminals. According FERC
staff, the commission has added a security chapter to its LNG site inspection manuals
which consolidates previous requirements and adds new ones.72 As part of its
biennial inspection program, FERC also inspected 11 jurisdictional LNG sites in
2005 “placing increased emphasis on plant security measures and improvements.”73
Federal Interagency Cooperation in LNG Security
The Coast Guard, TSA, and FERC all have potentially overlapping security
jurisdiction over certain facilities at onshore LNG terminals. For example, FERC’s
biennial LNG site visits explicitly include security inspections, and TSA oversees on-
site pipeline security — but the Coast Guard asserts lead security authority over the
entire terminal in its new maritime security regulations.74 Under current authority,
both the Coast Guard and TSA could both require their own facility security
assessments for pipelines and LNG storage at LNG marine terminals.
To avoid jurisdictional confusion, the Coast Guard, OPS and FERC have
entered into an interagency agreement to ensure that they
work in a coordinated manner to address issues regarding safety and security at
waterfront LNG facilities, including the terminal facilities and tanker operations,
to avoid duplication of effort, and to maximize the exchange of relevant
information related to the safety and security aspects of LNG facilities and the
related marine concerns.75
70 Foley, R. Federal Energy Regulatory Commission (FERC), Office of Energy Projects.
“Liquefied Natural Gas Imports.” Slide presentation. January 2003. p. 17.
71 Robinson, J.M, Federal Energy Regulatory Commission (FERC). Testimony before the
Senate Energy and Natural Resources Committee, Subcommittee on Energy. February 15,
2005.
72 FERC. Personal communication. August 13, 2003.
73 Federal Energy Regulatory Commission (FERC). 2005 Annual Report. Washington, DC.
2006. p. 18.
74 U.S. Coast Guard, Port Security Directorate. Personal communication. August 12, 2003.
75 Federal Energy Regulatory Commission (FERC). “Interagency Agreement Among the
Federal Energy Regulatory Commission United States Coast Guard and Research and
Special Programs Administration for the Safety and Security Review of Waterfront
Import/Export Liquefied Natural Gas Facilities.” February 11, 2004. p. 1.

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The agreement requires the agencies to cooperate in the siting approval of new LNG
facilities, inspection and operational review of existing facilities, informal
communication, and dispute resolution.76 According to FERC, in FY2006, the
commission the “performed detailed reviews of [LNG] safety and security issues, in
coordination with the U.S. Coast Guard and the U.S. Department of
Transportation.”77
The FERC’s security review for new LNG terminal applications is conducted
in consultation with the US Coast Guard. Security assessments of individual terminal
proposals are conducted by Coast Guard field units through security workshops
involving federal, state and local law enforcement officials as well as port
stakeholders. FERC engineers provide technical assistance on marine spill issues.
FERC and the Coast Guard require LNG terminal applicants to also submit a
navigational suitability review under 33 CFR 127, and begin a security assessment
of their proposal in accordance with 33 CFR 105. According to FERC, where site-
specific security concerns have been raised, the agencies have conducted non-public
technical workshops with “all relevant stakeholders and federal, state and local expert
agencies” to resolve those security concerns.78
Industry Initiatives for Land-Based LNG Security
After the September 11 attacks, gas infrastructure operators, many with LNG
facilities, immediately increased security against the newly perceived terrorist threat.
The operators strengthened emergency plans; increased liaison with law enforcement;
increased monitoring of visitors and vehicles on utility property; increased employee
security awareness; and deployed more security guards.79 In cooperation with the
OPS, the Interstate Natural Gas Association of America (INGAA) formed a task
force to develop and oversee industry-wide security standards “for critical onshore
and offshore pipelines and related facilities, as well as liquefied natural gas (LNG)
facilities.”80 The task force also included representatives from the Department of
Energy (DOE), the American Gas Association (AGA), and non-member pipeline
operators. With the endorsement of the OPS, the INGAA task force issued security
guidelines for natural gas infrastructure, including LNG facilities, in September
76 FERC. February 11, 2004. pp. 2-4.
77 Federal Energy Regulatory Commission (FERC). 2006 Annual Report. Washington, DC.
2007. p. 25.
78 Robinson, J.M., Federal Energy Regulatory Commission (FERC). Testimony before the
Senate Energy and Natural Resources Committee, Subcommittee on Energy. February 15,
2005.
79 American Gas Association (AGA) Natural Gas Distribution Industry Critical
Infrastructure Security, 2002, and AGA, Natural Gas Infrastructure Security — Frequently
Asked Questions. April 30, 2003.
80 Haener, W.J., CMS Energy Corp. Testimony on behalf of the Interstate Natural Gas
Association of America (INGAA) before the House Transportation and Infrastructure
Subcommittee on Highways and Transit. February 13, 2002. p. 4.

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2002.81 The task force also worked with federal agencies, including the Department
of Homeland Security, on a common government threat notification system.82
Key Policy Issues in LNG Security
Government and industry have taken significant steps to secure the nation’s
LNG infrastructure. But continued progress in implementing and sustaining LNG
infrastructure protection activities may face several challenges. As discussed in
detail in the following sections, members of Congress and federal officials are
concerned about the growing public costs of LNG security, the uncertainty of terrorist
threats against LNG, and security differences between foreign and U.S. LNG vessels
and crews.
Public Costs of LNG Marine Security
Some policymakers are concerned about the public cost and sustainability of
securing LNG shipments. Overall cost data for LNG security are unavailable, but
estimates have been made for Everett shipments. In 2003, the Coast Guard Program
Office estimated that it cost the Coast Guard approximately $40,000 to $50,000 to
“shepherd” an LNG tanker through a delivery to the Everett terminal, depending on
the duration of the delivery, the nature of the security escort, and other factors.83 A
2007 update from the Coast Guard Boston Sector estimates an average direct cost to
the Coast Guard of an LNG delivery to Everett of approximately $62,000.84 State
and local authorities also incur costs for overtime police, fire and security personnel
overseeing LNG tanker deliveries. The state of Massachusetts and the cities of
Boston and Chelsea estimated they spent a combined $37,500 to safeguard the first
LNG shipment to Everett after September 11, 2001.85 Based on these figures, the
public cost of security for an LNG tanker shipment to Everett is on the order of
$100,000, excluding costs incurred by the terminal owner.
Marine security costs at other LNG terminals could be lower than for Everett
because they are farther from dense populations and may face fewer vulnerabilities.
But these terminals expect more shipments. Altogether, the six active onshore U.S.
LNG terminals, including Everett, expect to have enough capacity for over 600
shipments per year by 2008. Further increasing LNG imports to meet 17% of total
U.S. gas supply by 2030 as projected by the EIA could require some 3,000 LNG
81 Interstate Natural Gas Association of America (INGAA) et al., Security Guidelines
Natural Gas Industry Transmission and Distribution. Washington, DC. September 6, 2002.
82 Haener. February 13, 2002. p. 4.
83 U.S. Coast Guard, Program Office. Personal communication. August 12, 2003. This
estimate is based on boat, staff and administrative costs for an assumed 20-hour mission.
84 Cdr. Mark Meservey, House Liaison, U.S. Coast Guard. “Sector Boston LNG Security
Approximate Costs.” Unpublished memorandum. May 4, 2007.
85 McElhenny, J. “State Says LNG Tanker Security Cost $20,500.” Associated Press.
November 2, 2001. p. 1.

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shipments to LNG terminals serving the United States. Assuming an average
security cost only half that for Everett, or $50,000 per shipment, annual costs to the
public for marine LNG security could exceed $30 million by 2008 and $150 million
by 2030.86
The potential increase in security costs from growing U.S. LNG imports, and
the potential diversion of Coast Guard and safety agency resources from other
activities have been a concern to policy makers.87 According to Coast Guard
officials, the service’s LNG security expenditures are not all incremental, since they
are part of the Coast Guard’s general mission to protect the nation’s waters and
coasts. Nonetheless, Coast Guard staff have acknowledged that resources dedicated
to securing maritime LNG might be otherwise deployed for boating safety, search
and rescue, drug interdiction, or other security missions. LNG security is funded
from the Coast Guard’s general maritime security budget, so it is not a line item in
the FY2008 DHS budget request. However, the Coast Guard’s FY2006 budget did
include an additional $11 million in funding over FY2005 levels for “Increased Port
Presence and LNG Transport Security,” specifically including “additional boat crews
and screening personnel at key LNG hubs.”88 The budget also included $5.7 million
to implement a nationwide vessel monitoring system and $87.4 million to increase
surveillance of vessels by aircraft.
State and local agencies are also seeking more funding to offset the costs of
LNG security. Otherwise, they believe that LNG security needs may force them to
divert limited local resources from other important public services. Addressing these
concerns, the Energy Policy Act of 2005 requires private and public sector cost-
sharing for LNG tanker security (Section 311d). In compliance with the act and prior
FERC policy, FERC officials require new LNG terminal operators to pay the costs
of any additional security or safety needed for their facilities.89 The FERC has also
recommended that LNG terminal operators provide private security staff to
supplement Coast Guard and local government security forces.90 Because the
accounting of these security costs is unclear, however, and cost recovery may be
partly tied to uncertain sources of federal funding, such as DHS security grants, some
86 Note that security costs associated with any LNG terminals in Canada, Mexico and the
Bahamas (built primarily to serve U.S. markets) would not be a direct U.S. responsibility,
although such costs might still be priced into LNG supplied from those terminals.
87 See, for example, Representative Peter Defazio, remarks before the House Homeland
Security Committee hearing on Securing Liquid Natural Gas Tankers to Protect the
Homeland. March 21, 2007; Government Accountability Office (GAO). COAST GUARD:
Station Readiness Improving, but Resource Challenges and Management Concerns Remain.
GAO-05-161. January 2005.
88 Department of Homeland Security (DHS). Budget-in-Brief, Fiscal Year 2006.
89 Baldor, L.C. “Federal Agency, R.I. Officials Meet over LNG Terminal.” Associated
Press. March 17, 2005.
90 Federal Energy Regulatory Commission (FERC). “Response to Senator Jack Reed’s
2/1/05 letter regarding the proposed Weaver’s Cove LNG Project in Fall River, MA & the
proposed KeySpan LNG Facility Upgrade Project in Providence, RI under CP04-293 et al.”
March 3, 2005. p. 2.

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members of Congress and local government officials continue to voice concern over
costs for LNG security and incident response.91
The public costs of LNG security may decline as federally mandated security
systems and plans are implemented. New security technology, more specific threat
intelligence, and changing threat assessments may all help to lower LNG security
costs in the future. Nonetheless, the potential increase in security costs from growing
U.S. LNG shipments may warrant a review of these costs and associated recovery
mechanisms.
Uncertainty About LNG Threats
The likelihood of a terrorist attack on U.S. LNG infrastructure has been the
subject of debate since September 11, 2001. To date, no LNG tanker or land-based
LNG facility in the world has been attacked by terrorists. However, similar natural
gas and oil facilities have been favored terror targets internationally. For example,
since 2001, gas and oil pipelines have been attacked in at least half a dozen
countries.92 In October 2002, the French oil tanker Limburg was attacked off the
Yemeni coast by a bomb-laden fishing boat.93 In June 2003, U.S. intelligence
agencies warned about possible Al Qaeda attacks on energy facilities in Texas.94 The
Homeland Security Council included terrorist attacks on “cargo ships” carrying
“flammable liquids” among the fifteen hazards scenarios it developed in 2004 as the
basis for U.S. homeland security “national preparedness standards.”95
In addition to warnings of a terrorist threat to energy facilities in general, federal
agencies have identified LNG infrastructure in particular as a potential terrorist
target. The Department of Homeland Security (DHS) specifically included LNG
assets among a list of potential terrorist targets in a security alert late in 2003.96 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 could not be proved, DHS stated that “the
risks associated with LNG shipments are real, and they can never be entirely
eliminated.”97 The 2004 report by Sandia National Laboratories concluded that
91 Eltman, F. “Tension and Even Presidential Politics Surrounds NY Natural Gas Plan.”
Associated Press. January 11, 2007.
92 For specific examples, see CRS Report RL31990, Pipeline Security: An Overview of
Federal Activities and Current Policy Issues, by Paul Parfomak.
93 “Ships as Terrorist Targets.” American Shipper. November, 2002. p. 59.
94 Hedges, M. “Terrorists Possibly Targeting Texas.” Houston Chronicle. June 24, 2003.
95 Homeland Security Council. Planning Scenarios: Executive Summaries. July 2004. p.
6-1.
96 Office of Congressman Edward J. Markey. Personal communication with staff. January
5, 2004.
97 Turner, P.J., Assistant Secretary for Legislative Affairs, Department of Homeland
(continued...)

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potential terrorist attacks on LNG tankers, could be considered “credible and
possible.”98 The Sandia report identified LNG tankers as vulnerable to ramming, pre-
placed explosives, insider takeover, hijacking, or external terrorist actions (such as
a Limburg-type, missile or airplane attack).99 Others further assert that terrorists have
demonstrated both the desire and capability to attack such shipping with the intention
of harming the general population.100
Although they acknowledge the security information put forth by federal
agencies, many experts believe that concern about threats to LNG tankers is
overstated.101 In 2003, 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.”102 Industry representatives argue that deliberately causing an LNG
catastrophe to injure people might be possible in theory, but would be extremely
difficult to accomplish. Likewise, the Federal Energy Regulatory Commission
(FERC) and other experts believe that LNG facilities are relatively secure compared
to other hazardous chemical infrastructures which receives less public attention. In
a December 2004 report, the FERC stated that
for a new LNG terminal proposal ... the perceived threat of a terrorist attack may
be considered as highly probable to the local population. However, at the
national level, potential terrorist targets are plentiful.... Many of these pose a
similar or greater hazard to that of LNG.103
The FERC also remarked, however, that “unlike accidental causes, historical
experience provides little guidance in estimating the probability of a terrorist attack
on an LNG vessel or onshore storage facility.”104
97 (...continued)
Security (DHS). Letter to U.S. Representative Edward Markey. April 15, 2004. p. 1.
98 Sandia National Laboratories (SNL). Guidance on Risk Analysis and Safety Implications
of a Large Liquefied Natural Gas (LNG) Spill Over Water. SAND2004-6258. Albuquerque,
NM. December 2004. pp. 49-50.
99 SNL. December 2004. pp. 61-62.
100 Clarke, R.A., et al. LNG Facilities in Urban Areas. Good Harbor Consulting, LLC.
Prepared for the Rhode Island Office of Attorney General. GHC-RI-0505A. May 2005.
101 McLaughlin, J. “LNG is Nowhere Near as Dangerous as People Are Making it Out to
Be.” Lloyd’s List. February 8, 2005. p5.
102 Behr, Peter. “Higher Gas Price Sets Stage for LNG.” Washington Post. July 5, 2003. p.
D10.
103 Federal Energy Regulatory Commission (FERC). Vista del Sol LNG Terminal Project,
Draft Environmental Impact Statement. FERC/EIS-0176D. December 2004. p. 4-162; For
example, based on data from the U.S. Office of Hazardous Materials Safety, 600 LNG
tanker shipments would account for less than 1% of total annual U.S. shipments of
hazardous marine cargo such as ammonia, crude oil, liquefied petroleum gases, and other
volatile chemicals.
104 FERC. FERC/EIS-0176D. December 2004. p4-162. Notwithstanding this assertion, in
its subsequent draft review of the Long Beach LNG terminal proposal, the FERC states that
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Former Director of Central Intelligence, James Woolsey, has stated his belief
that a terrorist attack on an LNG tanker in U.S. waters would be unlikely because its
potential impacts would not be great enough compared to other potential targets.105
LNG terminal operators which have conducted proprietary assessments of potential
terrorist attacks against LNG tankers, have expressed similar views.106 In a
September, 2006, evaluation of a proposed LNG terminal in Long Island Sound, the
Coast Guard states that “there are currently no specific, credible threats against” the
proposed LNG facility or tankers serving the facility.107 The evaluation also notes,
however, that the threat environment is dynamic and that some threats may be
unknown.108 Because the probability of a terrorist attack on LNG cannot be known
with certainty, policy makers and community leaders must, to some extent, rely on
their own judgment to decide whether LNG security measures for a specific facility
will adequately protect the public.
Foreign vs. U.S. LNG Tankers and Crews
There are currently no U.S.-flagged LNG tankers and few, if any, U.S. citizens
among LNG tanker crews. Some policy makers are concerned that, compared to U.S.
vessels and crews, foreign-flagged LNG tankers may not face the same security
requirements or may not face the same level of security oversight and verification.109
This rationale underlies the provisions in P.L. 109-241 that promote LNG shipping
to the United States on U.S.-flagged vessels with U.S. crews. Prompted by these
provisions, at least two offshore LNG developers have committed to using U.S.
crews in their offshore terminal siting applications.110 Some stakeholders have called
for similar measures to promote U.S. flags and crews for tankers serving onshore
LNG terminals regulated by FERC.
104 (...continued)
“the historical probability of a successful terrorist event would be less than seven chances
in a million per year...” See FERC. October 7, 2005. p. ES-14.
105 Woolsey, James. Remarks before the National Commission on Energy LNG Forum,
Washington, D.C., June 21, 2006.
106 Grant, Richard, President, Distrigas. Testimony before the Senate Committee on Energy
and Natural Resources, Subcommittee on Energy hearing on “The Future of Liquefied
Natural Gas: Siting and Safety.” February 15, 2005.
107 U.S. Coast Guard. U.S. Coast Guard Captain of the Port Long Island Sound Waterways
Suitability Report for the Proposed Broadwater Liquefied Natural Gas Facility. September
21, 2006. p. 146.
108 Ibid.
109 See, for example: Senator Barbara A. Mikulski. Testimony before the House of
Transportation and Infrastructure Committee, Coast Guard and Maritime Transportation
Subcommittee field hearing on Safety and Security of Liquefied Natural Gas and the Impact
on Port Operations. Baltimore, MD. April 23, 2007.
110 Joshi, Rajesh. “Excelerate Wins Backing for LNG Terminal: Pledge on Using US-citizen
Crew Critical to MARAD Decision.” Lloyd’s List. May 17, 2007. p. 2.

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Notwithstanding the LNG tanker provisions in P.L. 109-241, Coast Guard
officials have stated that existing security provisions for foreign-flagged LNG tankers
and foreign place them on an equal security footing with potential U.S.
counterparts.111
Our domestic maritime security regime is closely aligned with the International
Ship and Port Facility Security (ISPS) Code... Under the ISPS Code, vessels in
international service, including LNG vessels, must have an International Ship
Security Certificate (ISSC). To be issued an ISSC by its flag state, the vessel
must develop and implement a threat-scalable security plan that, among other
things, establishes access control measures, security measures for cargo handling
and delivery of ships stores, surveillance and monitoring, security
communications, security incident procedures, and training and drill
requirements. The plan must also identify a Ship Security Officer who is
responsible for ensuring compliance with the ship’s security plan. The Coast
Guard rigorously enforces this international requirement by evaluating security
compliance as part of our ongoing port state control program.
Others have questioned preferential treatment of U.S. LNG tankers and crews on the
grounds that it may impinge on free trade principles by discriminating against foreign
LNG tanker operators fully adhering to international standards.112 Given the potential
maritime treaty and trade implications, federal efforts to promote U.S. flags and
crews on LNG tankers may require careful consideration as to the potential benefits
and costs.
Conclusions
The U.S. LNG industry is growing quickly. While rising LNG imports may
offer economic benefits, they also pose risks. LNG infrastructure is inherently
hazardous and it is potentially attractive to terrorists. Both lawmakers and the
general public are concerned about these risks, although the LNG industry has a long
history of relatively safe operations and has taken steps to secure its assets against
terrorist attack. No LNG tanker or land-based facility has been attacked by terrorists,
and federal, state and local governments have put in place security measures intended
to safeguard LNG against newly perceived terrorist threats. These measures are
evolving, but a variety of industry and agency representatives suggest that these
federal initiatives are reducing the vulnerability of U.S. LNG to terrorism.
The ongoing debate about LNG infrastructure security in the United States has
often been contentious. Local officials and community groups have challenged
numerous LNG infrastructure proposals on the grounds that they may represent an
unacceptable risk to the public. Heightened public scrutiny of LNG facilities has
made it difficult to site new LNG terminals near major gas markets and has increased
the cost and complexity of LNG terminal siting approval. Nonetheless, both industry
and government officials acknowledge that enough new LNG infrastructure will
111 O’Malley. May 7, 2007.
112 “LNG Must Uphold US Free Trade, Warns ICS.” Lloyd’s List. February 21, 2007. p. 3.

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likely be approved to meet long-term U.S. import requirements. Indeed, federal
agencies have approved the construction of a number of new U.S. import terminals,
several of them onshore. Numerous additional terminal proposals await federal
approval. Together with the expansion of the existing U.S. import terminals and the
construction of new LNG terminals in Canada and Mexico, the approved U.S.
facilities would provide enough added capacity to meet the bulk of U.S. LNG
demand for the next 20 years.
New U.S. LNG terminals may not be ideally located so as to minimize the cost
of natural gas, but building them in these locations may be better than not building
them at all. Furthermore, because their security has been subject to intense public
scrutiny, new LNG terminal and tanker operations may be safer than they might have
been without such scrutiny and their siting may be less likely to be challenged at a
later time when construction is already underway. The construction and subsequent
closure of the Shoreham nuclear power plant in the 1980’s due to new public
opposition offers an example of the need to resolve safety and security concerns
before capital is invested. From a purely economic perspective, therefore, the added
costs of building more heavily protected LNG terminals potentially farther from their
primary markets may represent the U.S. public’s willingness to pay for LNG security.
Whether this implicit price of LNG security is reasonable is an open question, but the
continued interest of private companies to invest billions of dollars in U.S. LNG
terminals suggests that it will not prevent needed LNG development.
As Congress continues its oversight of LNG infrastructure development, it may
decide to examine the public costs and resource requirements of LNG security,
especially in light of dramatically increasing LNG imports. In particular, Congress
may consider whether future LNG security requirements will be appropriately
funded, whether these requirements will be balanced against evolving risks, and
whether the LNG industry is carrying its fair share of the security burden. Congress
may also act to improve its understanding of LNG security risks. Costly “blanket”
investments in LNG security might be avoided if more refined terror threat
information were available to focus security spending on a narrower set of
infrastructure vulnerabilities. Finally, Congress may initiate action to better
understand the security and trade implications of efforts to promote U.S.-flagged
LNG tankers.
In addition to these specific issues, Congress might consider how the various
elements of U.S. LNG security activity fit together in the nation’s overall strategy to
protect critical infrastructure. Maintaining high levels of security around LNG
tankers, for example, may be of limited benefit if other hazardous marine cargoes are
less well-protected. U.S. LNG security also requires coordination among many
groups: international treaty organizations, federal agencies, state and local agencies,
trade associations and LNG infrastructure operators. Reviewing how these groups
work together to achieve common security goals could be an oversight challenge for
Congress.

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