LNG explosion shines light on 42-year-old gas rules

The last time the federal government wrote regulations for the liquefied natural gas industry, Pac-Man was the hot new video game and Ronald Reagan was on his way to the White House for the first time.

It was 1980, and the idea of chilling natural gas to subzero temperatures and loading it onto ships was a novelty in the United States. Forty-two years later, the LNG industry is growing rapidly — along with local pollution, climate-warming methane emissions, and the risk of fires and explosions to communities.

By the end of this year, the Transportation Department’s pipeline safety regulator may have new guidelines for the industry. But the process is fraught with uncertainty: It has failed once before, in 2016, and the industry is already lining up to argue for a light-handed approach.

In the meantime, near-misses and environmental problems highlight the risk. Most recently, a fireball at a plant near Freeport, Texas, touched off a fire that burned for 40 minutes, led to the temporary closure of the plant and knocked about 20 percent of U.S. export capacity offline for months, disrupting the United States’ plan to replace Russian gas in Europe (Energywire, June 15).

“It’s important to remember that LNG poses unique safety risks, often above and beyond those posed by other hydrocarbon transportation, due to the high pressure and density,” said Bill Caram, executive director of the Pipeline Safety Trust, a Bellingham, Wash.-based safety advocacy group that tracks LNG safety.

Seven LNG plants are currently operating, handling billions of cubic feet of methane every day and making the United States the leading exporter of natural gas. More than a dozen new plants or production lines are planned or under construction. The United States exported nearly 10 billion cubic feet of LNG per day last year, up from essentially nothing in 2015.

The industry has indicated that it is open to new rules from the Pipeline and Hazardous Materials Safety Administration (PHMSA), but is already setting expectations. The Center for Liquefied Natural Gas is calling for flexible, “nimble” regulations and a “holistic” approach that “exchanges expertise and innovation between safety officials and industry.”

“We absolutely will be submitting comments” on the upcoming proposed rules, said Daphne Magnuson, spokesperson for the Center for Liquefied Natural Gas, an industry group that is part of the Natural Gas Supply Association.

Any complaints from the industry that new protections could slow development or reduce exports could now have increased salience. Russia’s invasion and bombardment of Ukraine, and the sanctions imposed in response, have positioned U.S. LNG as a way for Europe to replace Russian gas. And the Biden administration has promised to help.

Environmental groups and others, however, are increasingly fighting natural gas exports from the United States, pointing to international calls from scientists that fossil fuel use must rapidly decline if the world is to avoid the worst impacts of climate change.

‘It’s incessant’

When the current safety rules were written, LNG was used primarily as a backup supply for gas-fired power plants when demand peaked. It was referred to as “peak shaving.”

Today, massive terminals along the coasts handle billions of cubic feet of gas piped in every day from production fields. They shrink it six hundredfold into a cryogenic liquid for shipping overseas on vessels roughly the size of aircraft carriers.

The operations of those plants don’t always sit well with the people who live around them.

Many of the existing terminals appear to have high levels of emissions, both from accidental releases and from flares that are used to burn waste gases, according to environmentalists and nearby residents.

Venture Global LNG’s Calcasieu Pass terminal outside Cameron, La., has reported five gas releases to the state Department of Environmental Quality, according to research by the Louisiana Bucket Brigade, an environmental group. Most of them occurred before the plant began shipping gas in March — one release in January totaled 180,000 pounds of methane.

The plant’s flares burned 84 out of 90 days between Jan. 27 and April 27, according to John Allaire, a nearby resident who works with the Bucket Brigade.

Down the coast in Portland, Texas, flares have been burning steadily since Cheniere Energy Inc. opened its Corpus Christi LNG terminal, said Errol Summerlin, a retired attorney who lives near the facility.

“It’s incessant, it really is,” Summerlin said.

Tom Myers, vice president for health, safety and environmental matters at Cheniere, said his company supports the agency’s efforts to update the rules.

“These two issues — safety and emissions — are vital to the present and future of natural gas and LNG, and we look forward to working with PHMSA and others as these rules are crafted,” Myers said in a statement.

Freeport LNG declined to comment and Venture Global, which operates the Calcasieu Pass terminal, didn’t respond to requests for comment.

Summerlin has helped organize environmental and grassroots groups to fight the LNG facility in court and in front of state regulators, but they’ve barely slowed the plant’s construction.

Federal regulations on methane from the LNG industry could conceivably address the amount of flaring that happens at the plants. At least two states, New Mexico and Colorado, have enacted limits on openly burning gas as part of their state regulations on methane.

“I think clearly any kind of federal oversight or federal regulation to control this would be absolutely encouraging,” Summerlin said.

Regulators in Texas have historically pushed back against federal rules, arguing that the state is better positioned to oversee the energy industry.

The main physical danger at an LNG site is a leak forming a cloud of low-lying natural gas that drifts until it hits an ignition source — even simple static electricity — and bursts into flames. Experts worry that, since so much gas is stored at each terminal, damage could spread from one part of the facility to another and spiral out of control.

That’s apparently what happened at an Algerian LNG terminal in 2004. A gas leak touched off an explosion that destroyed three of the plant’s six liquefaction trains and killed 27 people.

The Center for Liquefied Natural Gas says safety is a priority at all LNG facilities. But a chemical safety expert has been warning for years that PHMSA allows companies to severely underestimate the danger of an explosion at a terminal.

Jerry Havens is a professor emeritus of chemical engineering at the University of Arkansas who developed computer models for LNG regulators. The industry, he said, is building a generation of LNG infrastructure that fails to properly account for the risk of a massive accident.

Current assumptions, Havens says, are built around the properties of methane, which is lighter than air and disperses upward in the event of a leak. That might have been adequate for a previous generation of LNG terminals designed for importing methane into the United States.

But at export terminals, where gas must be chilled to minus 260 degrees Fahrenheit, the production lines are rife with “heavier hydrocarbons” such as ethane and propane that present a higher risk of exploding.

“Our regulatory process is failing to satisfactorily consider fully the accident consequences that attend the operation of LNG Export Terminals that must be considered in the public interest,” Havens said in comments to PHMSA last year.

Havens said he believes the worst-case accident at an LNG terminal could be 10 times worse than the one PHMSA uses for its planning, which is based on computer models. Earlier this month, he formally petitioned PHMSA to end the use of the disaster model the agency currently uses to calculate the danger of several terminals.

Looking toward 2023

The last significant push to update the regulations occurred in 2016, the last full year of the Obama administration.

The LNG export drive was in full swing, with a wave of terminals under construction or planned. PHMSA announced plans to revise the regulations and hosted a meeting of experts to discuss them (Energywire, June 7, 2016).

The effort came after years of criticism of lax safety rules, including a 2015 congressional hearing during which Rep. Jackie Speier (D-Calif.) called PHMSA “not only a toothless tiger, but one that has overdosed on quaaludes and is passed out on the job.”

But momentum slowed after President Donald Trump took office.

The Trump administration turned its efforts to cutting back on regulation, and Trump ordered PHMSA to create a path for another type of LNG transportation: shipping it by rail (Energywire, July 22, 2019). The agency’s broader LNG proposal dropped off the federal government’s regulatory plan, and the senior engineer who was shepherding development of a proposal retired.

It wasn’t the first time the federal government’s regulation writers had missed an LNG revolution.

In 2003, the LNG industry rushed to build import facilities after then-Federal Reserve Chair Alan Greenspan warned that diminishing supplies of natural gas were threatening the U.S. economy. While such import terminals were larger than the “peak shaving” facilities at power plants, safety experts say they were less hazardous than their export counterparts.

By 2008, the shale gas drilling rush had begun, and the gas import business soured. Domestic production of methane soared, resulting in a glut of supply that drove down prices. A new export industry took its place, retrofitting some of the older import facilities. New terminals were planned, and they are now shipping gas.

Though the 2016 discussions didn’t advance new federal regulations, PHMSA officials say agency staff carried some of the knowledge gained in the 2016 meeting with them when they assisted in developing a new industry standard for the National Fire Protection Association, which sets standards that can be incorporated into the LNG rule.

PHMSA officials are planning to send a draft of updated LNG safety rules to the office of the secretary of Transportation by the end of September. They’re expecting to publish those proposed rules in the Federal Register in March 2023.

But publication of such a proposal would mark only another early step in a long process. Comment periods — and multiple draft updates — can take years to finish. It took nine years for the agency to enact regulations arising from a fatal 2010 pipeline explosion in San Bruno, Calif.

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