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Senate OKs Study of Open-Rack Vaporization Process for LNG Terminal Projects

The Senate last week approved an amendment as part of the broader energy bill that calls for the federal government to conduct a study of the controversial open-rack vaporization (ORV) system for liquefied natural gas (LNG) import terminals (see related story).

Specifically, the measure sponsored by Sen. David Vitter (R-LA) calls for the secretary of the Energy Department, along with the National Oceanic Atmospheric Administration and the commandant of the U.S. Coast Guard, to study the "risks or benefits presented by cumulative impacts" of multiple LNG facilities constructed in the Gulf of Mexico using the ORV system. It does not specify a timetable for the study to be carried out.

The ORV technology has been proposed for LNG terminal projects in the Gulf and has run into opposition from the governors of Louisiana, Mississippi and Alabama. Under the ORV system, warm Gulf seawater would be flowed over pipes containing liquefied gas, warming it and returning it to a gaseous state. The water that is cooled in the process is then returned back to the ocean. Opponents are concerned that the ORV technology would result in extensive fish kills, as well as other adverse impacts.

In late May, Louisiana Gov. Kathleen Babineaux Blanco, who has been a strong proponent of onshore LNG import terminal construction in her state, sent a letter to Acting Maritime Administrator John Jamian warning that she would oppose construction of LNG terminals off the Louisiana coast that use the ORV process (see NGI, May 23). The governors of Alabama and Mississippi have since voiced their objections to ORV technology.

State governors have the authority to single-handedly veto LNG projects that are located off their coasts under the Deepwater Port Act, although they do not possess the same power to block LNG terminals that are located onshore.

"Considering [the] ongoing concerns, I will oppose the licensing of offshore LNG terminals that will use the open-rack vaporizer system. Until studies demonstrate that the operation of the open-rack vaporizer will not have an unacceptable impact on the surrounding ecosystem, I will only support offshore LNG terminals using a closed-loop system having negligible impacts to marine life," Blanco said in her letter.

The closed-loop system for turning LNG into a gaseous state is a more expensive system than the ORV process, according to experts.

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