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Focus on LNG Siting: A State Perspective

Congress revamps LNG and storage, giving broad new powers to FERC. Why the Feds still must consult with local authorities.

Fortnightly Magazine - November 2005
  1. application for LNG-terminal construction and encourages the applicant to cooperate with state and local officials. The pre-filing process, which applicants have used before FERC in pipeline certification proceedings on a voluntary basis, is intended to expedite the review of LNG terminals, identify early on any environmental problems and allow for increased public involvement.
  2. FERC reasoned that consumers would not be affected by the project's costs since the sponsors would shoulder the entire economic risk of the project. In total, FERC believed that its decision will remove some of the economic and regulatory barriers to investment in LNG terminals.
  3. Some sections of the act give FERC the option to issue rules on specific matters ().
  4. Topics for these studies include: (1) the impact of the development of coal-bed methane on water use in six states (mostly Rocky Mountain states) (sec. 1811); (2) recommendations for balancing the natural-gas market through 2015 (sec. 1818); (3) policies and recommendations for fostering cost-effective energy conservation (sec. 139); (4) recommendations for whether the goals of energy efficiency standards should be viewed from end-use consumption or the full fuel cycle (sec. 1802); and (5) the effect of dual-fuel capability at gas-fired generating units and industrial facilities (sec. 1812).
  5. For example, the study on backup fuel capability is in response to the concern (especially in New England) that most new gas-fired generating facilities lack the ability to use a second fuel. The 2003 National Petroleum Council study, as well as other analyses, has shown that additional dual-fuel capability, especially done on a large scale, would contribute to stabilizing natural gas prices as well as improving electricity reliability.
  6. The act requires the department to consult and cooperate with different federal agencies in addition to the governors of the states within which LNG terminals are being proposed. The major intent of the forums is "to foster dialogue among federal officials, state and local officials, the general public, independent experts, and industry representatives." This dialogue is intended to "identify and develop best practices for addressing the issues and challenges associated with [LNG], building on existing cooperative efforts."

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