Non-traditional competitors may pose a threat to investor-owned utilities. New research shows that real competition is coming from brick-and-mortar retailers, cable and phone companies, and online...
Gas Supply:Too little, Too late?
To assist the Coast Guard and other agencies in assessing LNG risks in Boston Harbor, a Department of Energy official asked Quest Consultants of Norman, Okla., to provide a "quick analysis," according to a Department of Energy (DOE) memo. Quest prepared a report over a two-day period and provided it to DOE. Subsequently the Coast Guard re-opened Boston Harbor to LNG traffic and established new security protocols for ensuring the safety of LNG shipments.
That might have been the end of the story, except for the fact that citations to Quest's report soon began appearing in regulatory documents at the Federal Energy Regulatory Commission (FERC) and in application materials submitted by LNG project developers. These citations began raising concerns, in part because the Quest report suggested that the impact of an LNG release would be much smaller than earlier studies had indicated it would, and because the Quest report was being applied to projects other than the Everett terminal, for which it was specifically drafted. The report's principal author at Quest, in fact, charged that it was being "misused" for purposes beyond its intent.
The government's first reaction to these charges was to defend the report. In response to charges that the report's science conflicted with other, peer-reviewed studies, Mark Maddox, a DOE aide, told the Wall Street Journal, "The Quest model is a little bit more sophisticated than some of the other models." But after scientists raised more objections, DOE sought to distance itself from the Quest report. The DOE official who commissioned the report left the agency, and in what Rep. Edward Markey, D-Mass., called "a rather bizarre and Orwellian rewriting of history," DOE spokespeople said the department was "not involved" with the Quest study-statements later attributed to a misunderstanding.
The Sandia Study
Amid a climate of growing concern, DOE and FERC both launched new studies that would be used to build a more adequate science model for considering a variety of LNG projects and scenarios. In December 2003, DOE ordered its Sandia National Laboratories to review three previous studies on LNG hazards, including the Quest report. Later, in January, DOE reportedly expanded the scope of the study to include other, more critical studies, including one that Lloyd's Register of Shipping prepared for Tractebel (owner of the Everett terminal) in late 2001.
The current status of the Sandia study is unclear, and whether it will be subjected to scientific review is doubtful. Sandia officials declined to comment, but other sources tell the Fortnightly that DOE plans to share only certain insights from the Sandia study, citing security sensitivities.
The ABSG Model
In February 2004, FERC commissioned its own study, by the American Bureau of Shipping Consulting Group (ABSG), to review the current science on LNG spill hazards, and to assemble science models for application to LNG project proposals. The report was to be prepared quickly, with the first draft due in mid-March and the final by the end of March. FERC released the ABSG study in May and allowed two weeks for public comment, but the study was not