Region seeks to woo cooled-gas terminals

By Jennifer Lin and Adam Fifield
Inquirer Staff Writers
http://www.philly.com/mld/inquirer/10943734.htm

Every time a tanker carrying a liquid form of natural gas enters Boston Harbor, everything stops. Traffic on the Tobin Bridge. Planes in and out of Logan International.

That's not all.

To guard against a terrorist attack, each tanker is escorted by two Coast Guard patrol boats with mounted machine guns, a 110-foot cutter, a helicopter, six tugboats, a fireboat, police cruisers. State police divers check piers for bombs, while sharpshooters stand guard on rooftops. And all other ships must stay at least a mile away.

A similar scene may be coming to the Delaware River.

Two proposals - one by the energy giant BP, the other by Philadelphia Gas Works - would transform Philadelphia into a major hub for importing liquefied natural gas.

The proposals for LNG terminals are among 32 nationally, aimed at boosting the nation's supplies of natural gas at a time when North American gas sources - piped across the country - are squeezed by increasing demand. Currently, there are only four LNG terminals in the United States.

BP wants to build a $500 million facility in Logan Township, Gloucester County, that would handle three LNG tankers a week. Each the length of three football fields, the tankers would bring in enough fuel to heat five million homes a year. Its plan is now before state and federal regulators.

PGW, whose plan has yet to be formally submitted, is looking for a partner to bring three tankers a month to an LNG storage facility it has operated since the 1970s in Port Richmond to store gas from pipelines. The city-owned utility, which is perennially strapped for cash, believes that the LNG imports would generate revenue and hold down gas costs for consumers.

Politicians in other cities are trying to block LNG terminals. But Mayor Street and some South Jersey lawmakers say they would welcome the projects, which both BP and PGW indicate would bring new jobs and commerce to the region.

The PGW plan would "stabilize the utility's finances for years to come," said Street, adding that the city would pay "special attention to safety concerns."

The arrival of LNG tankers on the Delaware River would add a significant, costly new security risk to a waterway already seen as a high-threat port system, critics say.

"The extraordinary security in Boston Harbor is official recognition that these ships constitute an attractive target for terrorist actions," said Alan Muller, executive director of Green Delaware, which opposes local LNG projects.

LNG is natural gas chilled to minus 260 degrees Fahrenheit. As a liquid, it occupies 1/600th the space, making it economical to be shipped from Russia, Algeria, Trinidad and other countries. The LNG industry says that there have been no tanker accidents in 40 years and 33,000 voyages.

The U.S. Department of Homeland Security warned in 2003 that LNG tankers and terminals could become terrorist targets. The Congressional Research Service said tankers might be attacked to destroy their cargo or might be commandeered as weapons.

While LNG is not explosive, when exposed to air, it vaporizes into a white cloud that can ignite into a massive fire.

Arguably, LNG traffic on the Delaware would mean greater challenges than at Boston Harbor.

To get to the BP project, a tanker would pass under the Delaware Memorial Bridge and near downtown Wilmington. The Salem Nuclear Power Station has told regulators that it is concerned about vulnerable LNG tankers parked next door.

A trip to PGW's Port Richmond site, meanwhile, would involve passing three more bridges, six oil refineries, the airport, and riverfront towns.

The Federal Energy Regulatory Commission (FERC) must approve any LNG terminal application, while the Coast Guard decides whether a waterway is suitable for the tankers.

Capt. Jonathan Sarubbi, the Coast Guard officer in charge in Philadelphia, said it's too early to say what security measures his agency might recommend for either the BP or PGW projects.

"Each port is unique," Sarubbi said. "There are a range of options available to us."

Facing grassroots opposition, energy companies recently scrapped LNG projects in Maine, California and Alabama. Mayors in Providence, R.I., and Fall River, Mass., are fighting proposals, while Boston's mayor made an unsuccessful bid in court to ban LNG tankers from Boston Harbor.

Fall River Mayor Edward M. Lambert Jr. said it was "absolute foolishness" to put LNG terminals in urban areas. He said he has tried for two years to stop a project by Hess LNG, which received an initial favorable review from federal regulators last August.

Lambert said LNG tankers would have to pass under four bridges to reach Fall River. Coast Guard officials have not decided whether the bridges would have to close, but Lambert said the impact would be "horrific," stopping Interstate 195 traffic over the Braga Bridge.

"We'd have a backup from here to Providence, 15 miles away," Lambert said.

Concerned about BP's Gloucester County proposal, Delaware's environmental secretary on Feb. 3 denied a permit for the 1,900-foot tanker pier, which would extend into part of the river claimed by Delaware. The denial was based on the state's 1971 Coastal Zone Act, which was established to protect its coast from the effects of heavy industry. BP appealed the ruling on Tuesday.

Lawrence A. Husick, a homeland security expert for the Foreign Policy Research Institute in Philadelphia, said LNG tankers have to be protected, producing hidden costs for communities. A Congressional Research Service report said public-safety agencies in Massachusetts, including the Coast Guard, spend $80,000 to safeguard each LNG tanker in Boston Harbor.

In a report for the institute released Wednesday, Husick said the best location locally for a terminal would be an offshore site in the Delaware Bay, far from people. The region would save on security costs.

"What may appear to be a less desirable location might in fact turn out to be cheaper," Husick said.

The consequences of a terrorist attack on an LNG tanker are unknown. But in December, Sandia National Laboratories reported that such an attack could create a fire hot enough to cause second-degree burns on people a mile away and damage buildings within a third of a mile.

The study also determined that risks from spills are "small and manageable," and that risks of intentional breaches "can be significantly reduced with appropriate security, planning, prevention and mitigation."

Ships on the Delaware River already haul large volumes of dangerous cargo - crude oil and gasoline; liquid forms of butane and propane; benzene and sulfuric acid.

"The reality is, there's a lot out there right now that people just may not be aware of," said BP spokesman Thomas Mueller.

BP, he said, selected the Logan Township site for its relative remoteness and because an existing natural gas pipeline is nearby. He noted that the LNG terminal near Boston is "right in the center of things. It is surrounded by neighbors, businesses."

He said BP's terminal would have safety features such as an inner and outer wall for storage tanks and a containment dike. Tankers, he added, would be double-hulled and BP would pay for tugboat escorts.

FERC is expected to release in a few months an impact study on environmental, security and safety issues.

Thomas Knudsen, PGW's chief executive, said the gas utility might select a partner this summer to develop a pier, arrange for tankers, and market LNG to other customers. Revenue from the partnership, he said, would help PGW to offset future rate hikes. "This could obviate that," he said.

He said he believes that the risks are manageable. For 35 years, PGW has been buying natural gas from pipelines, liquefying it, and storing it in tanks in Port Richmond. The liquefied fuel is converted back to a gas during peak winter months.

"You have vulnerable assets all over the place," Knudsen said. "Are we just going to pull our skirts over our head and get away from here? Or do we embrace the possibility of progress and address these problems in a larger context?"

So far, communities have had difficulty getting a handle on the security risks posed by LNG terminals. BP has held dozens of community meetings on its project, while PGW has vowed to do the same once it selects a partner.

But details and debate about the hazards of LNG projects are shrouded in secrecy. The Coast Guard is holding closed-door sessions on the security risks of the BP project, but requires participants to sign a form, promising not to share information.

Sharon Finlayson, of the New Jersey Environmental Federation, refused, saying that the gag order left her "feeling very, very uncomfortable."

In Fall River, meanwhile, Mayor Lambert wanted to read a report, commissioned by Hess LNG, on whether the project in his city was vulnerable to a terrorist attack. But citing the Patriot Act, regulators with FERC said that if he read the report, he could not discuss it.

He, too, refused. "It would render the information useless to me," Lambert said. "They're almost telling us we can't have a reasonable debate on this issue."

Contact staff writer Jennifer Lin at 215-854-5659.

Last modified: 22 October 2005

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