Statement Of Sen. Alexander - The Future Of Liquefied Natural Gas: Siting And Safety

Posted on February 15, 2005

Our failure to produce an adequate supply of affordable, clean energy not only pollutes the air, it is shipping thousands of good jobs overseas. In the last four years, we have gone from the lowest gas prices in the industrialized world to the highest gas prices in the industrialized world. None of the potential solutions to this problem are easy and none of the answers are particularly fast. Clearly, in the short-term, the role of aggressive conservation can not be overemphasized. But we can't conserve our way out of this problem. One of the only immediate solutions is more liquefied natural gas (LNG) - and quickly. There are four LNG facilities existing in the United States and 31 more have been proposed. Some of the existing LNG facilities would like to see expansion. It appears that most of these projects, which are our best short-term supply solution, have considerable controversy around them, especially at a local and state level. Chairman Domenici has asked the Senate Energy Subcommittee to be very active in the natural gas issues as the energy bill develops this Congress. I am working on legislation to be considered in the energy bill, which I intend to introduce in the next several weeks. This is our first of several subcommittee hearings on natural gas issues. "The Future of Liquefied Natural Gas: Siting and Safety" is our topic today. Panel one will focus on the prospects for LNG development in the United States. Panel two will discuss the safety and security related to LNG development. Clearly, LNG is needed and especially in the short-term. As with all energy facility developments, there are challenges in the siting of LNG projects. As a former governor, I'm very interested in making sure that state and local concerns are adequately addressed in these projects. It doesn't appear that all is going well for the siting of these critically-needed LNG terminals. Today's hearing promises to be a lively hearing as we dive into this very important issue. As of December 1, 2004, there were 31 active proposals (in various stages of the approval process) for new terminals in the United States. The Gulf Coast has been the most receptive region to new siting; on the East and West Coast, local response has not been as positive. Two examples from the West and East Coast will be presented at the hearing today. On panel one, Sound Energy Solutions (a subsidiary of the Mitsubishi Corporation) has proposed a LNG terminal in Long Beach, California. As a result of that proposal, a jurisdictional battle over siting authority between the Federal Energy Regulatory Commission (FERC) and the California Public Utilities Commission (PUC) is now pending before the 9th Circuit Court of Appeals. This court decision could have widespread impacts on the development of LNG terminals across the country. I'm pleased that we will hear from the president of the California PUC, FERC and Sound Energy Solutions today on this important issue. On the East Coast, Keyspan LNG and BG LNG plan to upgrade an existing Keyspan LNG facility at the mouth of Providence Harbor. The application is currently pending before FERC. There has been local concern about the plan. Mayor David Cicilline of Providence will be a witness on panel one. I'm pleased that Sen. Jack Reed of Rhode Island will introduce Mayor Cicilline. We will also hear from Rick Grant, President and CEO of Distrigas. He will tell us about the Everett LNG facility located in Boston Harbor. On panel two, we will discuss safety concerns surrounding LNG terminals. I am pleased that Mike Hightower, the lead author of the December 2004 Sandia National Laboratories' LNG Risk Assessment Report, is here with us. In addition, on panel two, we will hear from: Capt. David Scott, Chief of the Office of Operating and Environmental Standards at the US Coast Guard. I hope that Capt. Scott can tell us more about offshore LNG terminals. There has never been an offshore LNG terminal built to date, but I am very interested in discussing this. Also on panel two, we will hear from Bill Kramer, Deputy Director of the New Jersey Division of Fire Safety and again from Mark Robinson, Director of the Office of Energy Projects at the FERC. I welcome everyone, and I look forward to hearing your comments on this very important topic.