Nov. 24, 2004

Congress Sneaks in Language Undermining State and Local Control Over Hazardous, Liquefied Natural Gas Facilities

Statement of Tyson Slocum, Research Director, Public Citizen’s Energy Program

In a behind-closed-doors move during recent budget negotiations, congressional conferees inserted language into the massive appropriations bill (H.R. 4818) stating that the Federal Energy Regulatory Commission (FERC) can pre-empt states on the permitting and siting of liquefied natural gas (LNG) facilities, thereby squelching the ability of states and local communities to have adequate control over these controversial projects.

The new conference language states that, “The Natural Gas Act of 1938 clearly preempts [s]tates on matters of approving and siting natural gas infrastructure … The nation will need to expand its LNG infrastructure over the decades.”

Such a move may undermine a July lawsuit filed by the California Public Utility Commission claiming that FERC illegally ruled in March that states have limited jurisdiction over the permitting and siting of LNG facilities inside their borders.   The lawsuit is being closely watched by other states, where officials have expressed alarm about the inability of state and local governments to have adequate input into these projects. The projects are particularly controversial because liquefied natural gas is extremely volatile and dangerous.

The new language is also troubling because companies are proposing to build 19 new LNG marine terminal facilities throughout the United States in the next few years. Currently there are just four LNG marine terminals in the United States.

Communities are leery of LNG facilities because of security reasons. LNG tankers and marine terminals make significant terrorist targets because of the enormous quantities of fuel carried by the tankers (up to 10 times the amount of fuel of a typical crude oil ship), the risk of fires, and the hazards associated with the heating of the LNG at the marine terminals. States officials have raised serious questions about the adequacy of FERC’s security assessments.

This concern is particularly important given assertions by the United States’ former deputy counterterrorism czar Richard Clarke   that Al Qaeda operatives came to the United States by sneaking aboard Algerian LNG tankers and that they considered Boston Harbor a “logistical hub” for the terror network’s U.S. activities prior to Sept. 11, 2001. With the boat bombings of the U.S.S. Cole in 2000 and the oil tanker Limburg in 2002, Al Qaeda has demonstrated the capacity to strike at sea. FERC’s safety regulations are inadequate, in part because they deal only with LNG terminals, not tankers.

Increasing U.S. reliance on liquefied natural gas also increases our dependence on the Organization of the Petroleum Exporting Countries (OPEC). We obtain most of our natural gas from domestic production, with a small percentage coming from LNG imports. A quarter of those imports are from OPEC nations (Algeria, Qatar and Nigeria). Boosting U.S. reliance on liquefied natural gas – as called for in the appropriations bill and envisioned by the companies that want to build new LNG terminals   – will result in the United States becoming more dependent on OPEC.

Further, liquefied natural gas is not environmentally sustainable. Natural gas used as fuel for electricity pollutes, and the exploration and drilling for natural gas can cause environmental damage.

More alarming is the way in which this language was inserted into the conference committee report. Rather than hold public hearings where the public and other lawmakers have an opportunity to comment, this provision – which was in neither the House nor Senate bill – was slipped into a massive appropriations bill at the last minute. Even California’s two senators were surprised to learn later that it had been added. By executing this shady maneuver, Congress has created a culture of unaccountability that robs the public and – in this case, whole states – of the notion that our laws and America’s policies are deliberated in a fair and open manner.

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