Oct 20 2009
The Abraham Energy Report's new edition released today to subscribers includes an article highlighting a little-known provision in the $10 billion Coast Guard Reauthorization bill passed on Sept. 24 by the House Transportation and Infrastructure Committee which could place additional limits on construction of new liquefied natural gas (LNG) facilities in the United States.
The provision, buried in the legislation, focuses on the construction of some new U.S. maritime terminals for "especially hazardous materials," which includes LNG and some agricultural chemicals.
The article reports that, "The language was proposed by U.S. Rep. Elijah Cummings, D-Md., who has expressed reservations about the security of LNG tankers and terminals along urban waterfronts. Cummings's district includes part of the Baltimore waterfront.
"The latest Cummings amendment would require the Coast Guard to guarantee the security of vessels and facilities handling LNG and agricultural resources before any such facility is even built. Like all shore-side U.S. facilities, these terminals are already required to operate in strict compliance with current safety standards, including local and state regulations, before tankers carrying hazardous materials can use a facility. The rule, if enacted, would prevent terminals from being used if the Coast Guard says it doesn't have enough resources to guarantee the security of a facility.
"'My amendment would not stop LNG terminals, or anything else, from being built,' said Cummings. 'The only thing my amendment does is ensure that especially hazardous materials are protected with security measures meeting standards set by the Coast Guard for these materials. These are chemicals that can do massive, catastrophic damage if they are not properly secured. I believe my amendment ensures that they are.'
"Republicans and Democrats alike expressed concerns about the provisions. 'The amendment creates unnecessary and duplicative requirements that will be impossible to implement, and may simply seek to prevent the construction of new facilities to handle important energy and agricultural resources,' said U.S. Rep. Frank LoBiondo, R-N.J., the ranking member of the Coast Guard and Maritime Transportation Subcommittee. 'I hope we can address these concerns as this legislation progresses.'
"The reauthorization bill is pending in the House, and a number of members have vowed to eliminate the provision before the bill is signed into law.
"'As our nation's energy needs are expected to grow by 50 percent over the next two decades, it is imperative that we pursue an all of the above approach,' said U.S. Rep. Fred Upton, the top Republican on the House Energy and Environment Subcommittee. 'Natural gas is of critical importance as we seek to meet our energy demands of tomorrow. However, the shortsighted provision tucked into the Coast Guard bill has the potential to derail all new liquefied natural gas terminals with unlimited government red tape. Such an effort defies common sense, especially with such stringent laws already on the books.'"
"There are seven U.S. mainland LNG facilities, according to FERC. Twenty new LNG terminals have been approved and are under construction or awaiting construction, as of Sept. 15, 2009, and another nine have been proposed.
Source: Abraham Energy Report