US FERC proposes safety model for future LNG terminal permits

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, May 14 -- The US Federal Energy Regulatory Commission Friday said it wants public comment on a new technical report that outlines the safety modeling the agency will use when evaluating future LNG terminal applications.

"Our economy and way of life depends on maintaining dependable natural gas supplies. The nation must balance the manageable risks of LNG imports with the potentially severe economic effects of natural gas price volatility," FERC Chairman Pat Wood said.

Anticipating robust US natural gas demand well into the next decade, US major oil and gas firms are spending increasingly larger parts of their capital budgets on LNG infrastructure as a way to tap into existing low-cost gas basins outside the US. However, some residents of areas with proposed terminals are worried they could be facing serious risks from an accidental spill or an act of sabotage.

FERC's study evaluated published models that estimate the release rate, pool spread, and vapor generation for unconfined spills of LNG on water, and the thermal effects of pool fires.

The public comment period lasts 2 weeks. Other government agencies, including the departments of transportation and energy, as well as the US Coast Guard already reviewed and commented on the report.

The commission noted that the models themselves do not address the risk to the public from an LNG terminal and its associated tanker traffic. Nevertheless, FERC has been one of US President George W. Bush administration's most vocal supporters of LNG use, calling it a safe and reliable energy source that will help mitigate price spikes.

"The public can take comfort in the fact that LNG has been safely transported by ship for nearly a half century. LNG cargo ships have double hulls and other design safety features, and rigorous exclusionary zones are maintained as the vessels are brought into port," Wood said. "An LNG tanker safely docks in Japan every 20 hr. LNG spills and fires are low-probability events. This report will help us all understand the consequences of such events more realistically."

Study details
FERC noted that in recent years a number of studies have emerged that attempt to analyze the possibility of an LNG spill from a ship and to define the "worst case" scenario that would result from a breach of an LNG vessel.

The agency hired Houston-based ABSG Consulting Inc. to identify and evaluate the most appropriate models to be used on a site-specific basis to estimate flammable vapor and thermal hazard distances for LNG spills on water.

The study looked at the theoretical basis for each model, the strengths and limitations of the model, and its applicability to field test data, and recommends the most appropriate models to use.

An overview of data relating to the thermal effects on people and structures also is included.

Practical approaches are recommended for use in performing site-specific facility siting studies. Examples of consequence assessments are included for spills from 1-5 m diameter hull breaches to examine the model sensitivities and to illustrate the various methods. FERC staff will use the recommended methods to calculate site-specific flammable vapor and thermal hazards for each import facility application before the commission.

Related LNG congressional action
A pending energy bill (HR 6) contains provisions designed to facilitate LNG terminal development, but the legislation has stalled over an unrelated dispute with the Senate over downstream clean fuel rules.

House Republican leaders are expected to endorse a new proposal by Rep. Lee Terry (R-Neb.) of the House Energy and Commerce Committee that seeks to eliminate existing jurisdictional conflicts and legal ambiguities.

Specifically, the draft legislation designates a "lead agency" for project review and permitting and set deadlines for FERC review. It also codifies FERC's landmark "Hackberry" decision, which gives project developers the opportunity to structure LNG terminal construction and supply arrangements without being subject to FERC open-access requirements and other economic regulation.

Contact Maureen Lorenzetti at Maureenl@ogjonline.com.

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