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 Introduction to LNG

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Is LNG a Safe Fuel?26

LNG has been safely handled for many years. The industry is not without incidents, but it has maintained an enviable safety record, especially over the last 40 years. There are currently about 240 peakshaving and LNG storage facilities worldwide,27 some operating since the mid-60s. The U.S. has the largest number of LNG facilities in the world. There are 113 active LNG facilities spread across the U.S. with a higher concentration of the facilities in the northeastern region (see map on page 9).

The need for additional natural gas supplies, including the reopening of existing LNG facilities at Cove Point, Maryland and Elba Island, Georgia, has focused public attention on the safety and security of LNG facilities. The safe and environmentally sound operation of these facilities, both ships and terminals, and the protection of these facilities from terrorist activities or other forms of accident or injury is a concern and responsibility shared by operators as well as federal, state and local jurisdictions across the U.S. Onshore LNG facilities are industrial sites and, as such, are subject to all rules, regulations and environmental standards imposed by the various jurisdictions. These same or similar concerns apply to natural gas storage and pipeline transportation and distribution and our daily use of natural gas.

A brief overview of the issues is presented here. The second CEE briefing paper LNG Safety and the Environment provides details on the LNG industry safety record and incidents.

What is the safety record of the LNG industry?

Overall, the LNG industry has an excellent safety record compared to refineries and other petrochemical plants. Worldwide, there are 23 LNG export (liquefaction) terminals, 58 import (regasification) terminals, and 224 LNG ships, altogether handling approximately 168 million metric tons of LNG every year. LNG has been safely delivered across the ocean for over 40 years. In that time there have been over 45,000 LNG carrier voyages, covering more than 100 million miles, without major accidents or safety problems either in port or on the high seas.28 The LNG industry has had to meet stringent standards set by countries such as the U.S., Japan, Australia, and European nations.

According to the U.S. Department of Energy, over the life of the industry, eight marine incidents worldwide have resulted in spillage of LNG, with some hulls damaged due to cold fracture, but no cargo fires have occurred. Seven incidents not involving spillage were recorded, two from groundings, but with no significant cargo loss; that is, repairs were quickly made and leaks were avoided. There have been no LNG shipboard fatalities.29

Isolated accidents with fatalities occurred at several onshore facilities in the early years of the industry. More stringent operational and safety regulations have since been implemented.

Cleveland, Ohio, 1944

In 1939, the first commercial LNG peakshaving plant was built in West Virginia. In 1941, the East Ohio Gas Company built a second facility in Cleveland. The peakshaving plant operated without incident until 1944, when the facility was expanded to include a larger tank. A shortage of stainless steel alloys during World War II led to compromises in the design of the new tank. The tank failed shortly after it was placed in service allowing LNG to escape, forming a vapor cloud that filled the surrounding streets and storm sewer system. The natural gas in the vaporizing LNG pool ignited resulting in the deaths of 128 people in the adjoining residential area. The conclusion of the investigating body, the U.S. Bureau of Mines, was that the concept of liquefying and storing LNG was valid if "proper precautions were observed."30 A recent report by the engineering consulting firm, PTL,31 concluded that, had the Cleveland tank been built to current codes, this accident would not have happened. In fact, LNG tanks properly constructed of nine percent nickel steel have never had a crack failure in the 35-year history since the Cleveland incident.

Staten Island, New York, February 1973

In February 1973, an industrial accident unrelated to the presence of LNG occurred at the Texas Eastern Transmission Company peakshaving plant on Staten Island. In February 1972, the operators, suspecting a possible leak in the tank, took the facility out of service. Once the LNG tank was emptied, tears were found in the mylar lining. During the repairs, vapors associated with the cleaning process apparently ignited the mylar liner. The resultant fire caused the temperature in the tank to rise, generating enough pressure to dislodge a 6-inch thick concrete roof, which then fell on the workers in the tank killing 40 people.

The Fire Department of the City of New York report of July 197332 determined the accident was clearly a construction accident and not an "LNG accident".

In 1998, the New York Planning Board, while re-evaluating a moratorium on LNG facilities, concluded the following with respect to the Staten Island accident: "The government regulations and industry operating practices now in place would prevent a replication of this accident. The fire involved combustible construction materials and a tank design that are now prohibited. Although the exact causes may never be known, it is certain that LNG was not involved in the accident and the surrounding areas outside the facility were not exposed to risk."33

Cove Point, Maryland, October 1979

Finally, in October 1979, an explosion occurred within an electrical substation at the Cove Point, MD receiving terminal. LNG leaked through an inadequately tightened LNG pump electrical penetration seal, vaporized, passed through 200 feet of underground electrical conduit, and entered the substation. Since natural gas was never expected in this building, there were no gas detectors installed in the building. The natural gas-air mixture was ignited by the normal arcing contacts of a circuit breaker resulting in an explosion. The explosion killed one operator in the building, seriously injured a second and caused about $3 million in damages.

This was an isolated accident caused by a very specific set of circumstances. The National Transportation Safety Board35 found that the Cove Point Terminal was designed and constructed in conformance with all appropriate regulations and codes. However, as a result of this accident, three major design code changes were made at the Cove Point facility prior to reopening. Those changes are applicable industry-wide.

How will industry ensure safety and security of critical facilities and shipping activities?

The experience of the LNG industry demonstrates that normal operating hazards are manageable. No death or serious accident involving an LNG facility has occurred in the United States since the Cove Point accident. West and Mannan of Texas A&M University concluded in their paper LNG Safety Practice & Regulation: From 1944 East Ohio Tragedy to Today's Safety Record that "The worldwide LNG industry has compiled an enviable safety record based on the diligent industry safety analysis and the development of appropriate industrial safety regulations and standards."36

The over 40 years of experience without significant incidents caused by LNG at liquefaction facilities, on LNG carriers, and at regasification facilities reflects the industry's commitment to safety and safe engineering and operations.

The terrorist attacks on September 11, 2001 raised critical new security risks and exposure for consideration, not just for the LNG industry but for all major industrial activities and infrastructure facilities in the U.S. and worldwide. The LNG industry employs robust containment systems, proven operational procedures and many other safeguards. During the last several decades, technologies have advanced rapidly to ensure safer containment of LNG both during shipping and at onshore facilities. Since 2001, governments and industry have strengthened security measures for all critical infrastructure including LNG receiving terminals, ships, liquefaction facilities and export and import port and harbor operations.

The second CEE briefing paper, LNG Safety and Security37, provides details on and evaluates safety and security measures that are currently in use and under consideration, actions by industry and government to ensure safety and security, and technologies under development by industry that will reduce the effect LNG facilities may have on local communities. The major conclusion reached in that briefing paper is that the LNG industry has an excellent safety record. This strong safety record is a result of several factors. First, the industry has technically and operationally evolved to ensure safe and secure operations. Technical and operational advances include everything from the engineering that underlies LNG facilities to operational procedures to technical competency of personnel. Second, the physical and chemical properties of LNG are such that risks and hazards are well understood and incorporated into technology and operations.

Third the standards, codes and regulations that apply to the LNG industry further ensure safety. While we in the U.S. have our own regulatory requirements for LNG operators, we have benefited from the evolving international standards and codes that regulate the industry. Safety in the LNG industry is ensured by four elements that provide multiple layers of protection both for the safety of LNG industry workers and the safety of communities that surround LNG facilities. Primary containment is the first and most important requirement for containing the LNG product. This first layer of protection involves the use of appropriate materials for LNG facilities as well as proper engineering design of storage tanks onshore and on LNG ships and elsewhere. Secondary containment ensures that if leaks or spills occur at the onshore LNG facility, the LNG can be fully contained and isolated from the public. Safeguard systems offer a third layer of protection. The goal is to minimize the frequency and size of LNG releases both onshore and offshore and prevent harm from potential associated hazards, such as fire. For this level of safety protection, LNG operations use technologies such as high level alarms and multiple back-up safety systems, which include Emergency Shutdown (ESD) systems. ESD systems can identify problems and shut off operations in the event certain specified fault conditions or equipment failures occur, and which are designed to prevent or limit significantly the amount of LNG and LNG vapor that could be released. Fire and gas detection and fire fighting systems all combine to limit effects if there is a release. The LNG facility or ship operator then takes action by establishing necessary operating procedures, training, emergency response systems and regular maintenance to protect people, property and the environment from any release. Finally, LNG facility designs are required by regulation to maintain separation distances to separate land-based facilities from communities and other public areas. Moving safety zones are also required around LNG ships to reduce the chance of collisions with other ships.

What are the roles of federal, state and local government agencies and their jurisdictions?

The United States Coast Guard (USCG)38 is responsible for assuring the safety of all marine operations at the LNG terminals and on tankers in U.S. coastal waters. The Department of Transportation (DOT)39 regulates LNG tanker operations. The U.S. Federal Energy Regulatory Commission (FERC)40 is responsible for permitting new onshore LNG regasification terminals in the U.S. and ensuring safety at these facilities through inspections and other forms of oversight. In order to maintain a competitive environment for supply and pricing, the Energy Policy Act of 2005 codified the FERC's jurisdiction. Further, FERC has fostered experimentation with market-based approaches for both siting and economic and commercial aspects of LNG import terminal operations. The FERC's jurisdiction includes authority for permitting new long distance natural gas pipelines to be developed in the U.S., as well as for safe and environmentally sound operation of the overall "interstate" natural gas pipeline system (pipelines that cross state boundaries). The U.S. Environmental Protection Agency41 and state environmental agencies establish air and water standards with which the LNG industry must comply. Other federal agencies involved in environmental protection and safety protection include the U.S. Fish and Wildlife Service,42 U.S. Army Corps of Engineers43 (for coastal facilities and wetlands), U.S. Minerals Management Service44 (for offshore activities) and National Oceanic and Atmospheric Administration45 (for any activities near marine sanctuaries). The U.S. Department of Energy - Office of Fossil Energy46 helps to coordinate across federal agencies that have regulatory and policy authority for LNG.

State, county and local (municipal) agencies play roles to ensure safe and environmentally sound construction and operation of LNG industry facilities. The LNG industry is responsible for safe operations and facility security in cooperation with local police and fire departments.

How can citizens interact with industry and government to learn more?

The future briefing papers of the CEE mentioned above and the online Guide to LNG in North America provides extensive information to public audiences interested in U.S. energy trends and energy security; LNG industry and market developments; LNG safety, security and environmental considerations; and related regulatory and policy issues. The CEE website provides links to industry, government and public information sources. Companies with LNG operations maintain active public information offices, as do the federal agencies charged with regulatory and policy oversight.

26 A second CEE briefing paper, LNG Safety and Security, addresses comprehensively the worldwide safety and security record of the industry as well as the U.S. policy and regulatory safeguards.
27 CH-IV International: Safety History of International LNG Operations, June 2002.
28 Phil Bainbridge, VP BP Global LNG, LNG in North America and the Global Context, IELE/AIPN Meeting University of Houston, October 2002.
29 Juckett, Don, U.S. Department of Energy, Properties of LNG. LNG Workshop, MD, 2002.
30 U.S. Bureau of Mines, Report on the Investigation of the Fire at the Liquefaction, Storage, and Regasification Plant of the East Ohio Gas Co., Cleveland, Ohio, October 20, 1944, February 1946.
31 Lewis, James P, Outtrim, Patricia A., Lewis, William W., and Perry, Lui Xin, PTL: LNG, The Basics, Report prepared for BP, May 2001.
32 Fire Department of the City of New York, Report of Texas Eastern LNG Tank Fatal Fire and Roof Collapse, February 10, 1973, July 1973.
33 New York Energy Planning Board, Report on Issues Regarding the Existing New York Liquefied Natural Gas Moratorium, November 1998.
34 The content in this section is taken from CH-IV International Report Safety History of International LNG Operations, June 2002.
35 National Transportation Safety Board Report, Columbia LNG Corporation Explosion and Fire; Cove Point, MD; October 6, 1979, NTSB-PAR-80-2, April 16, 1980.
36 West, H.H. and Mannan, M.S. Texas A&M University: LNG Safety Practice & Regulation: From 1944 East Ohio Tragedy to Today’s Safety Record, AIChE meeting, April 2001.
37 www.beg.utexas.edu/energyecon/lng
38 United States Coast Guard
39 U.S. Department of Transportation (DOT)
40 U.S. Federal Energy Regulatory Commission (FERC)
41 U.S. Environmental Protection Agency (EPA)
42 U.S. Fish and Wildlife Service
43 U.S. Army Corps of Engineers
44 U.S. Minerals Management Service
45 U.S. National Oceanic and Atmospheric Administration
46 U.S. Department of Energy – Office of Fossil Energy