A House source indicated Thursday a contentious provision may be struck from the Coast Guard reauthorization bill (HR 2830) that would require the Department of Homeland Security to sign off on liquefied natural gas (LNG) projects.

The report came just days after Rep. John Mica (R-FL) urged Democrats on the House Energy and Commerce Committee to remove sections in the Coast Guard bill that he says would block imports of LNG into the United States.

Mica is the ranking Republican on the House Transportation and Infrastructure Committee, which has primary jurisdiction over the Coast Guard measure. The House Energy and Commerce Committee was scheduled to mark up the bill last Tuesday but postponed its review until not later than Nov. 16. The House energy panel will be the fourth and last committee to vote on the measure.

The controversial provision, which was written by LNG foe Rep. Edward Markey (D-MA), would prohibit the Federal Energy Regulatory Commission from approving any construction or expansion of an LNG regasification facility unless the secretary of Homeland Security first conducts a security review and signs off on the project.

"This language would significantly change the new approval process that was included in the Energy Policy Act of 2005 [EPAct]," Mica wrote in a letter to Rep. Joe Barton of Texas, the ranking Republican on the House energy panel, last month. EPAct specifically gave FERC exclusive jurisdiction over the approval and siting of LNG facilities.

The bill also would bar the Coast Guard from approving an LNG facility security plan unless the Coast Guard certifies that it has all of the assets necessary in the area to secure the facility. "The Coast Guard strongly opposes this provision because it shifts the burden of securing the location from the facility itself to the Coast Guard," Mica told Barton.

"Industry is concerned that this...requirement is aimed to prevent operations of any LNG terminal since the Coast Guard will not be able to certify that it can provide 100% security 100% of the time," he said.

In addition, the bill would require vessels and floating facilities that regasify LNG to be dry-docked every five years and to comply with vessel safety and construction standards. "This language is intended to directly block the development of a floating regasification facility in Long Island Sound that has been jointly proposed by Shell and TransCanada," Mica noted.

"I am deeply concerned about the effects that these provisions could have on industry's ability to meet our nation's increasing natural gas demand...Congress should encourage the use of this resource rather than making it more difficult to deliver clean energy to Americans' homes."

©Copyright 2007 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.