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Markey Plays Terrorism Card to Block LNG Imports, Exports

Following the recent spike in terrorism activity in Yemen, Sen. Edward Markey (D-MA) has asked President Obama to review whether it is safe for shipments of liquefied natural gas (LNG) imports to continue to be delivered from the Middle East nation to the Port of Boston's terminal in Everett, MA, and whether the United States should continue to approve exports of gas to foreign countries.

"The ongoing security threats in Yemen raise real questions about whether it is safe and reliable for tankers to continue delivering LNG shipments to the Port of Boston's Everett LNG import terminal," Markey wrote in a letter Monday to Obama. "I ask that you direct the U.S. Coast Guard to reexamine whether the security measures that are in place for tankers transporting LNG from Yemen into the United States are sufficient."

Markey, a staunch opponent of gas exports, also asked the president to order the Department of Energy (DOE) to "reevaluate the implications of permitting exports of domestically produced natural gas on our ability to reduce imports of natural gas from unsafe or unstable regions such as Yemen." He said that using U.S. gas to reduce dependence on foreign supplies "should take precedence over any plans to export U.S. natural gas abroad" and added that the "deteriorating situation in Yemen only serves to highlight and heighten this imperative."

Last week the DOE conditionally approved a third export license, this one for exports of up to 2 Bcf/d of gas from a terminal in Lake Charles, LA, to any country in the world for 20 years (see Daily GPIAug. 8). The DOE has now approved a total of 5.6 Bcf/d of gas for export, which Markey estimates is equal to 8% of annual U.S. consumption.

According to Markey, a recent major al Qaeda plot to once again attack Yemeni oil and gas installations was thwarted. "A spokesman for Yemen's prime minister was quoted as saying that this plot was 'to attack strategic locations in Mukalla and Shabwa.'" The Yemen gas export facility from which LNG shipments to New England depart is located in Balhaf in the province of Shabwa, he said.

The Everett terminal, which is owned and operated by Distrigas of Massachusetts LLC, receives significant quantities of LNG from Yemen, according to Markey. It has been the busiest LNG import facility in the U.S. for each of the past five years, with nearly 40% of all U.S. LNG imports arriving through the port during this period. In January, it received a shipment of 2.7 Bcf of LNG from Yemen. According to the Energy Information Administration, more than 87 Bcf of LNG from Yemen has been delivered to Everett since 2010. There are two deliveries of LNG from Yemen scheduled for the Everett facility in the fall and additional deliveries scheduled for 2014.

 The Everett terminal has been operating longer than any other LNG import terminal in the United States. Currently, the Everett terminal satisfies about 20% of New England's annual gas demand. It has two LNG storage tanks with a combined capacity of 3.4 Bcf, or 42 million gallons, and installed vaporization capacity of approximately 1 Bcf/d. Distrigas delivers vaporized LNG via the interconnecting facilities to two interstate natural gas pipelines Algonquin Gas Transmission LLC and Tennessee Gas Pipeline Co., and KeySpan Energy Delivery New England.

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