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FERC, DOT Inaction Slows LNG Export Projects, Oregon Backer Says

Bureaucratic indecision and squabbling surrounding some parts of liquefied natural gas (LNG) export facilities are holding up processing of FERC applications, according to one Oregon LNG project executive.

What is characterized as a bureaucratic tangle involves the Federal Energy Regulatory Commission (FERC) and the U.S. Department of Transportation (DOT) seemingly being unwilling to sign off on an agreed-to process for a vapor dispersion model in the LNG export facility approval process at FERC, according to Peter Hansen, CEO of the proposed Oregon LNG project slated for a site at Warrenton, OR (see Daily GPI, April 25, 2012).

The indecision has already delayed the $6 billion project by months, Hansen said (see Daily GPI, Dec. 31, 2013). Oregon LNG hasn't been able to get a schedule set for its project because it so far cannot get a draft environmental impact statement (DEIS), and it needs the DEIS for Oregon to complete its Coastal Zone Management Act review.

Other proposed LNG export projects are similarly being delayed, Hansen said.

DOT's Pipeline Hazardous Materials Safety Administration (PHMSA) earlier determined that the software used by FERC to run the vapor dispersion model was no good. "So there was a long period of time when no one could get anything done while we were all waiting for DOT and FERC to figure out what software to approve," Hansen said.

Eventually the software question was resolved, but a new issue has developed between FERC and DOT over what the process should be for determining the reasonable size of a typical LNG spill. "That question is now being chewed on by people within FERC and DOT, and in the meantime the industry waits," Hansen said.

He said just before the holidays an indication the issue was being resolved came in some feedback Sempra Energy's proposed Cameron, LA, LNG export project received from DOT/PHMSA. "That's an indication that it may be resolved; each applicant is supposed to get a letter [from DOT/PHMSA] about their design spill being approved," Hansen said.

FERC has told Hansen that it can't approve any construction plans for the export facilities until the vapor dispersion issues are resolved, and the Oregon LNG executive claims that PHMSA is showing no signs of acting promptly.

The bureaucratic red tape and squabble between agencies is much more evident in the FERC approval process than it is in the process at the U.S. Department of Energy for gaining approvals for exporting to non-free trade agreement nations, Hansen said.

"The FERC-DOT process is completely uncoordinated right now. It is a complete free ride for any agency to just say 'no.' Right now, when agencies say no, there is no recourse."

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