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Philadelphia City Council Opposes PGW's Proposed LNG Import Terminal

Citing safety concerns, the Philadelphia City Council last Thursday voted 12-2 in favor of a "nonbinding" resolution opposing Philadelphia Gas Works' (PGW) plan to turn its peak shaving LNG facility at Port Richmond into the Freedom Energy Center LNG import terminal.

The resolution opposes any LNG import terminal proposed in the city of Philadelphia or that would cause LNG tankers to regularly traverse the Delaware River alongside the city. It does not block PGW from filing plans for its project but serves as an indication of how the city council will vote on the project once it's filed.

The decision was based mainly on safety concerns stemming from the Sandia Lab's report on a worst case scenario terrorist attack on an LNG tanker and from national security analyst Richard Clarke's dire conclusions about the safety of LNG (see NGI, May 16, 2005; Dec. 27, 2004). The Sandia report said such an attack and subsequent fire, although very unlikely, could cause second-degree burns to people more than a mile away from the tanker (for a copy of the Sandia LNG safety study go to http://www.fossil.energy.gov/programs/oilgas/storage/index.html).

"It is difficult to imagine a worse location for an LNG shipping terminal than Port Richmond," the resolution stated. "The proposed terminal would require loaded LNG tankers, on a regular basis, to travel along the Delaware River close to areas of high population density, close to the Philadelphia International Airport, close to refineries, close to the professional sports stadiums and the large crowds those stadiums attract, close to Center City Philadelphia, and close to the housing, commercial and institutional development the City of Philadelphia and the City of Camden have attracted and seek to attract to their waterfronts."

The resolution also expressed concerns about the high costs and challenging logistics of ensuring safety and security once a tanker approached the city. It noted that the city of Boston has to pay $80,000 every time an LNG tanker makes a trip to its harbor. In addition, the Coast Guard, state police, Boston police department and Massachusetts Environmental Police must meet the tanker for escort. A state police helicopter must hover over it. All bridge and maritime traffic ceases. Flights must also be redirected to and from the airport, police must patrol the shoreline, a team of nine state police must dive under the unloading pier and in adjacent waters, and both the state and city police must maintain a 24-hour detail inside the LNG import facility and its surrounding area.

"Unlike other municipalities, which are preempted from regulating LNG shipments and are at the mercy of federal regulators who will decide whether LNG projects will be built in their areas, the City of Philadelphia is in the unique and enviable position, as proprietor of the [Philadelphia] Gas Works and owner of the Port Richmond facility, to say 'no' to LNG tankers sailing up the Delaware River and unloading in Port Richmond," the resolution said.

PGW said it was "disappointed" in the decision but still plans to move forward with the project. "It doesn't kill the deal by any means but what it does is create an additional impediment that we have to work through," said PGW spokesman Doug Oliver. "We look forward to...trying to convince council of the merits of this project at a later date.

"We are pleased that it's nonbinding but disappointed that the opportunity for a full and fair discussion was not allowed to occur," he said.

The company has been working with an unnamed developer/LNG supplier to build and supply the proposed LNG port. There have been rumors that Amerada Hess subsidiary Hess LNG is the unnamed partner in the project, but neither company would confirm that. Hess LNG and Poten & Partners are the sponsors of the Weaver's Cove LNG terminal proposed in Fall River, MA, which has encountered significant local opposition and legal hurdles.

"City council has spoken today, and PGW should now respect its wishes and stop spending taxpayer money pursuing a dangerous plan," said Christine Knapp, outreach coordinator for Citizens for Pennsylvania's Future (PennFuture), a public interest group that opposes the PGW project.

"While the resolution is not legally binding, it sends a strong message to PGW and their unnamed partner that this project should not continue without serious public scrutiny," Knapp noted. "PGW has already spent almost two million dollars pursuing the plan. Enough is enough."

PGW's $600 million LNG port would be constructed at the Tioga Marine Terminal, a deepwater river port with a deepwater pier near PGW's existing LNG peak shaving plant, which was built in the early 1970s. The existing plant currently has about 23.5 MMcf/d of natural gas liquefaction capacity, two storage tanks capable of holding a total of about 4.1 Bcf of gas and vaporization capacity totaling about 450 MMcf/d. The import project would include construction of a small pipeline and a gas-fired electric generation plant. It also would involve expanding the storage space at the facility by one-third.

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