Now that the US energy community has had nearly a month to consider a Sandia National Laboratories report on identifying and managing risks of importing liquefied natural gas, how have LNG proponents and regulators reacted (OGJ, Jan. 3, 2005, p. 30)?
In a word: positively.
"We're pleased that it's out there," said Richard J. Sharples, executive director of the Center for LNG, a Washington, DC, group of about 70 companies and trade associations representing LNG producers, shippers, terminal operators, and consumers.
"It adds a lot to the public dialog, particularly since, for the first time, we have a respected source talking not only about potential consequences but the ability to manage and mitigate risk. Essentially, it helps put these issues into perspective," he maintained.
Sharples said the center's technical group is studying the Sandia report.
"There are a lot of recommendations imbedded throughout it. We need to come up with our views about how they might be handled. For example, when there are requests for more studies, we want to make sure the work hasn't already been done in previous studies," he said.
Agencies respond
Sandia and the US Department of Energy released the report on Dec. 21. The two agencies charged with regulating LNG imports promptly responded.
The US Coast Guard regulates LNG tanker activity and offshore receiving terminals. Rear Adm. Thomas H. Gilmour, assistant commandant for marine safety, security, and environmental protection, said in a statement that the report confirmed "that LNG tankers are very strong ships and that the site-specific risk management activities can significantly reduce the possibility of a major loss of cargo from an accident or attack."
Gilmour said the report's classified version will provide the Coast Guard even more information to help it reduce risks of attacks aimed at LNG shipments. The Coast Guard considers the Sandia report's concentric zones of risk approach "an effective template to guide our field officers," he added.
At the Federal Energy Regulatory Commission, which has jurisdiction over onshore LNG terminals, Chairman Patrick Wood III said in a Dec. 22 statement that the Sandia report provided a scientifically supported validation of the view that the risks of LNG are low and manageable.
He added that the Sandia report also buttressed the FERC staff's hazard modeling.
"While the Sandia experts used different methodologies, the hazard ranges in the report are consistent with FERC's conservative assumptions," Wood said.
Debate in context
Proponents and regulators aren't shying away from the LNG import risks outlined in the Sandia report.
"We all know you can go down a route of potential consequences and create, really, any scenario. But you have to put the LNG debate into the proper context," said Sharples. "We need additional gas supplies in this country, and LNG can help in the more immediate term. It has a 45-year safety record. If managed correctly, the potential risks can be handled."
