Highly Combustible

Debating the Risks and Benefits of LNG

A tanker carrying liquefied natural gas (LNG) is a giant Thermos bottle longer than three football fields. LNG tankers carry nearly three billion cubic feet of natural gas that has been chilled to -260 degrees Fahrenheit, converting it to a liquid and reducing its volume six hundredfold. One tanker holds enough gas to heat about three million homes for four and a half days—or if the tanker were hit by a rocket, the spilled gas could vaporize and ignite in the air, causing second-degree burns and damaging buildings a mile away.

Natural gas provides about 24 percent of U.S. energy requirements, compared to 40 percent for oil and 23 percent for coal. Consumption has risen for a decade because gas was relatively cheap until the late 1990s and generates fewer pollutants and greenhouse gases than coal or oil.

Now, even with a drilling boom under way in the Rocky Mountain west, domestic production lags demand. Prices rose from $1.95 per thousand cubic feet in December 1998 to $6.44 in April 2005, increasing the cost of home heating, electricity and products such as fertilizer that use natural gas as an ingredient.

There is plenty of natural gas worldwide, mostly in faraway countries such as Russia, Iran and Qatar. Exporters liquefy the gas and ship it in tankers, then convert it back to gas at U.S. ports and deliver it through pipelines. The Energy Department predicts that by 2025 LNG may account for a quarter of U.S. natural gas consumption, up from roughly three percent today. Consequently, a rush is on to build new terminals, storage tanks and transmission systems.

Many impacted states and communities, along with nonprofit groups such as the Sierra Club and Public Citizen, view LNG as a threat, not a solution. They argue that LNG shipments pose safety risks and are attractive targets for terrorists. Many worry that increased LNG imports will undercut support for conservation and renewable energy.

A 2004 Greenpeace report called LNG "A Roadblock to a Clean Energy Future." However, other environmental advocates support LNG because natural gas produces lower levels of sulfur and nitrogen oxides, mercury and greenhouse gases than oil or coal, and because renewable fuels are not available on anything near the scale needed to meet current energy demand.

"Electric power generators shut down or switch to oil or coal when gas prices rise, so if we want to displace those fuels, we need more natural gas," says Christopher D"Ovidio, a staff attorney with the Conservation Law Foundation (CLF), which is active in LNG siting debates in New England. CLF views natural gas as an important transitional fuel between fossil and renewable energy. "I would love to be able to shift over to renewables tomorrow, but I’m a realist," says D"Ovidio.

Four years ago, the United States had only two LNG terminals, in Everett, Massachusetts and Lake Charles, Louisiana. Now two more are operating in Maryland and Georgia. The Federal Energy Regulatory Commission (FERC) has approved 12 proposals in Louisiana, Texas, Georgia and Massachusetts, with a dozen more applications pending from Oregon to New Jersey. The Coast Guard, which regulates offshore terminals, has approved two facilities off Louisiana and is considering eight more in the Gulf of Mexico and off California and Massachusetts.

No one expects that all of these terminals will be built, but because natural gas is a deregulated industry, no overall planning process is required to choose appropriate sites. Instead, developers want to get proposals approved quickly to take advantage of high gas prices. Most controversies center on projects in densely developed urban areas, where critics argue that an accident or terrorist attack could kill or injure thousands of people and damage bridges and highways. (After the September 2001 terrorist attacks, former White House antiterrorism advisor Richard Clarke disclosed that Al Qaeda agents had been smuggled into Boston Harbor on LNG tankers from Algeria, and warned that future terrorists might target LNG shipments.)

Despite these concerns, FERC has approved a terminal in Fall River, Massachusetts and is considering a proposed facility in Long Beach, California. Massachusetts officials are working to deny permits for dredging and other steps required to build the Fall River terminal. The California Public Utilities Commission is suing FERC, arguing that the Long Beach terminal will only deliver natural gas within California and thus falls under state control.

Concerned about state and local resistance, Congress included a provision in the recently passed energy bill that gives FERC sole jurisdiction over LNG facility siting. Senator Dianne Feinstein (D-CA) tried unsuccessfully to amend the bill to give states veto authority, arguing, "If there are other options besides putting these facilities in busy ports or near population centers, they should be sited where they pose the least danger to people, not just where they make the most economic sense."

LNG siting debates have some issues in common with arguments over wind power. In both cases, proposed plants would benefit the surrounding regions by delivering clean energy while imposing burdens on nearby communities, and balancing these tradeoffs is difficult.

For example, New York and Connecticut advocacy groups that oppose a proposal by Broadwater Energy to build an offshore LNG terminal in Long Island Sound contend that the facility would industrialize the Sound and impede recreational boating and fishing, while only 15 percent of gas delivered to the terminal would be directed to Long Island. "We are standing up for our right to enjoy Long Island Sound as we do today," says Adrian Little, a Connecticut yacht club commodore who is a member of Boaters Against Broadwater.

In a 2004 report, the bipartisan National Commission on Energy Policy identified siting debates as a critical energy security challenge, observing, "As the energy interdependence of all U.S. states and regions grows, so must the ability to incorporate regional and national perspectives and needs in the context of state and local siting procedures." Today, however, most energy politics remain firmly local, and few LNG opponents have proposed specific alternatives. Major investments in energy efficiency could offset a portion of natural gas demand, but renewable fuels currently account for only about six percent of U.S. energy consumption, far too small to obviate the need for additional gas—or other, dirtier fuels.

"Given the enormity of our energy needs, a segment of our supply has to come from LNG," says former U.S. Representative Philip Sharp, who served as Congressional chair of the National Commission on Energy Policy and is now president of Resources for the Future, an environmental think tank in Washington, D.C.

"There’s no way that cleaner sources add up to what we need, and gas is much cleaner than coal or oil. LNG should not become an excuse for failing to press forward on energy efficiency and renewable fuels, but we have to deal within the confines of our political and economic institutions, and changes in the energy system are incremental," says Sharp.