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Coast Guard’s Revised Rules Would Streamline Offshore LNG Terminal Licensing

The U.S. Coast Guard has published anotice of proposed rulemaking seeking public comment on a plan to overhaul its regulations for deepwater liquefied natural gas (LNG) import/export terminals that would streamline facility licensing, ease the process and clarify cooperating agency requirements.

The new rules would also help regulations better reflect new technologies and increasing supplies of oil and natural gas brought about by the sharp spike in onshore shale drilling in recent years, particularly rising interest in LNG exports.

Under the Deepwater Port Act of 1974, the Coast Guard, along with the Department of Transportation's U.S. Maritime Administration, governs the licensing and operation of offshore facilities used to import or export oil and gas. The proposal deals with revisions to regulations for permitting, construction, design, equipment and operation of deepwater ports, which are offshore fixed or floating structures, other than vessels such as pipelines, service platforms or mooring buoys, for example. 

The DWPA was first passed for deepwater oil import terminals. But since 2002, the federal law has been revised significantly to include regulations covering natural gas, most recently for the exports of LNG from offshore terminals. Only three deepwater LNG facilities have been constructed in that time, according to the maritime administration, but another three have recently been approved for construction.

Specifically, the Cast Guard oversees environmental impact analyses, navigation safety, engineering and facility inspections. But in addition to the maritime administration, several other federal agencies, including the Pipeline and Hazardous Materials Safety Administration (PHMSA), the Environmental Protection Agency and the Army Corps of Engineers have a hand in deepwater port regulations.

Currently, the timeline for acting on licensing applications is roughly one year, but the Coast Guard proposal would prevent delays in the process when additional information is needed by clarifying what each federal agency requires. The new rules would also ease the process by better defining the roles of each regulatory agency involved and would update technical aspects of the review process to account for new technologies.

The Coast Guard will accept public comment on the proposal until July 8.

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