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Industrials Push for Rapid Approval of LNG Terminal

While some environmentalists lambasted the Maritime Administration earlier this month for its conditional approval of Shell Gas & Power's Gulf Landing LNG import terminal offshore Louisiana, the Industrial Energy Consumers of America (IECA) urged several members of the Bush administration to do everything possible to get the terminal up and running.

"We wish to express our support for the Shell LNG import facility that is to be located offshore Cameron, LA," said Paul Cicio, director of the IECA, which represents the nation's large industrial companies and manufacturers. "This is an excellent proposal and we strongly encourage the administration to do all it can to ensure it receives the approvals needed to expedite its construction and operation as soon as possible.

"The U.S. natural gas crisis is nearing its fifth year, domestic production continues to struggle and there has been insignificant approval of new LNG import facilities needed to deliver relief to consumers," he said in a letter to Interior Secretary Gale Norton, Energy Secretary Samuel Bodman, Commerce Secretary Carlos M. Gutierrez and Council on Environmental Quality Chairman James Connaughton.

"The U.S. natural gas crisis has already cost consumers nearly $200 billion in higher natural gas prices and has significantly contributed to the loss of 2.5 million manufacturing jobs," said Cicio. "Consumers of this country are depending upon you to increase the supply and affordability of natural gas. We look forward to hearing from you on this matter."

The 1 Bcf/d terminal will be located in 55 feet of water 38 miles offshore Louisiana in West Cameron Block 213. The project will include two gravity-based structures, LNG containment facilities, open-rack vaporizers, living quarters, a ship berthing system and pipeline facilities. It will be able to receive 135 LNG ships annually, each with cargoes of between 125,000 and 160,000 cubic meters. Service is expected in late 2008 or early 2009.

Environmentalists were unable to persuade the Department of Transportation's Maritime Administration (MARAD) to reject the project based on its impact on fish populations, particularly Red Drum, an overfished species that currently is under a rebuilding plan. The National Oceanic and Atmospheric Administration's Fisheries department and MARAD determined that about 0.1%-3.8% of the annual Red Drum catch in the Gulf could be lost if even one LNG terminal with an open sea water vaporization process is built. The vaporization process uses sea water to warm the LNG and turn it back into a gas.

MARAD and the Coast Guard weighed the impact on the fish population with all of the other factors and determined that it was not significant enough to warrant rejecting the terminal's application.

However, an environmental impact assessment still must be done on the construction of the project's massive gravity based structures. Coast Guard regulators say it will be at least a year before that process is completed and it would be another three to five years after that before the terminal reaches in service.

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