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CEC Issues LNG Safety Advisory Report; Official Cautions Against Drawing Conclusions

A "Safety Advisory Report" by the California Energy Commission (CEC) on Sound Energy Solutions' (SES) proposed liquefied natural gas (LNG) import terminal in Long Beach, CA, outside Los Angeles could be interpreted as restricting LNG terminal development in the state to remote sites. But the CEC staff director charged with producing the report cautioned readers not to draw that conclusion.

"The report doesn't attempt to go that far," said David Maul, CEC manager of natural gas and special projects, in a brief interview with NGI. "If all of the concerns in the report can be met, a terminal could be sited in an area like the port."

The CEC's work was prompted by a provision in the new federal Energy Policy Act that gives states with proposed LNG terminal sites a limited, one-time chance to raise issues about the sites for eventual consideration by federal regulators.

CEC staff last Wednesday released its analysis of the proposed liquefied natural gas (LNG) receiving terminal in the Port of Long Beach, for which an official joint environmental impact report (EIR) by FERC and the port is due for release later this month. Under the new federal energy act, FERC is obligated to address any safety issues raised by CEC staff document.

The draft EIR will be the actionable document; CEC's report is strictly advisory, citing as a "threshold question" whether an LNG terminal should be sited in a populated area, meaning FERC should address this in the draft environmental report.

The CEC staff report acknowledges that the joint draft environmental report is imminent, but to date, sufficient safety analysis has not been done on the proposed Long Beach LNG site. "Placement of such a facility in a densely populated high-impact area must not occur until a comprehensive risk, economic and fiscal impact assessment is complete," the CEC report concluded, going on to list seven areas that must be addressed by FERC and the Port of Long Beach

One of the ten areas is to develop what the energy commission staff called "reasonable worst-case scenarios using risk and hazard analyses, including terrorist attacks." Another is assessing the proposed terminal's impact on homeland security threats.

"The placement of an LNG facility should be evaluated in the full context of its potentially hazardous factors, both natural and man-made," said the CEC report under the potential "disadvantages" of a proposed port site. "The City of Long Beach is potentially both a military and terrorist target due to the port operations and oil production/storage facilities and national economic importance valued at over $1 billion a day."

Noting that several state agencies that contributed to the safety advisory will continue to "retain their jurisdiction" regarding the review and decision-making on the application by Mitsubishi Corp.'s Sound Energy Solutions (SES) and affiliates of ConocoPhillips to jointly build and operate the proposed terminal, the CEC staff stated in the report's introduction that it expects "FERC's analysis and [subsequent] reports will satisfactorily address all of the issues" raised in safety advisory document.

After discussing the "kind and use of the facility," the report identifies safety issues and concerns, including: (1) seismic criteria, (2) wind speeds used for analyses, (3) the effect of passing vessel traffic on moored LNG ships, and (4) analysis of individual issues with combined loads and appropriate references. For example, the report said FERC should evaluate the use of takers up to 200,000 cubic meters in size.

The report goes over more safety issues and concerns related to the existing and projected demographics in and around the busy port location.

Numerous LNG safety studies and reports are cited, including the recent federal Department of Energy (DOE) study done by Sandia National Laboratories in New Mexico, which recommends that "risk identification and risk management should be conducted in cooperation with appropriate stakeholders, including public safety officials and elected officials." And one of the seven stipulated steps in a "minimum assessment" outlined by the report would be for final safety criteria for any terminal to include the recommendations of the Long Beach city fire and police departments, which are establishing recommendations for mitigating against any negative incidents at the proposed LNG facility.

"In light of [Sandia's report], a threshold question that needs to be addressed in reviewing the SES proposal is whether or not an LNG facility should be located in an area of high population density, and, if so, how close to a highly populated area [it] should be, and what mitigation measures are required to diminish any dangers to the local population in the event of a catastrophe at the facility."

Among the "disadvantages" to a proposed port siting in the report are both "catastrophic accident potential" and the threat of being a "terrorist target."

Among the local and state government bodies helping the CEC staff prepare this report are: California Air Resources Board (CARB), California Coastal Commission (CCC), California Public Utilities Commission (CPUC), California State Lands Commission, Division of Oil, Gas and Geothermal Resources, and the City and Port of Long Beach.

"As such, this report presents a comprehensive state and local agency perspective on the project, as directed 2005 Energy Policy Act," the report said, noting that each agency, however, may be offering additional information in the review of the formal joint draft environmental report.

Under the provisions of the new federal energy act, state governors could name a lead agency (California's governor named the CEC) to provide a safety advisory to FERC within 30 days of the new law becoming effective, which was last Aug. 9.

©Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

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