Washington — The US Pipeline and Hazardous Materials Safety Administration is taking an expanded role in reviewing LNG export projects, the agency told developers of major LNG projects this month.
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Letters from PHMSA to developers appear to shed light on one step the administration is taking to ease staffing constraints that may hamper reviews of the major export terminal projects at the US Federal Energy Regulatory Commission.
Fifteen projects, primarily on the Gulf Coast, are currently working their way through the FERC process. Industry officials, lawmakers and even some FERC commissioners have cited difficulties attracting enough expert staff at FERC to tackle the volume and scale of projects, even as developers competing in the global market seek greater certainty about the timing.
With a spotlight on that pace, FERC and PHMSA earlier this summer promised to better coordinate their work to shave off time.
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Kenneth Lee, director of engineering and research in PHMSA's Office of Pipeline Safety, sent letters to individual developers August 14 about the agency's "new process on siting reviews."
"Effective immediately, [PHMSA] will be responsible for evaluating a project's compliance with siting requirements" in PHMSA regulations related to LNG facilities, he wrote. In particular, he said the scope of this review will include thermal radiation protection, flammable vapor dispersion protection, ability to withstand wind forces, and siting requirements in National Fire Protection Association standards related to production, storage and handling of LNG.
Among the projects notified were Jordan Cove LNG, Rio Grande LNG, Gulf LNG and Venture Global Plaquemines LNG, and the Texas LNG project, according to FERC filings posted over the last week.
PHMSA has previously provided feedback or evaluation of FERC's reviews of project design but will now take on a more front-line role in conducting reviews, according to a government official who asked to speak on the condition of anonymity. Engineering staff in PHMSA's pipeline safety office will be handling the responsibility, this official said.
Lee, in his letters, asked the developers to submit the most recent design spill documentation to his agency.
Tamara Young-Allen, a spokeswoman at FERC, noted that PHMSA has had a longstanding role in LNG project reviews in partnership with FERC. "PHMSA is already a participant of a February 2004 Interagency Agreement, along with the US Coast Guard and FERC, to ensure greater coordination and exchange of information among these agencies in addressing the full range of safety and security issues at LNG terminals and related marine operations."
PHMSA's letter to developers follows a July announcement that FERC and PHMSA would soon sign a memorandum of understanding on collaborative procedures to significantly cut review times. FERC Chairman McIntyre said the effort would make full use of PHMSA expertise "to study potential impacts as to public safety of each and every LNG proposal." The MOU is still pending.
FERC earlier this summer asked LNG developers to consider hiring third-party contractors to assist the commission with fire protection reviews.
In a sign of keen interest on Capitol Hill, eight senators -- including Senate Energy and Natural Resources Chairman Lisa Murkowski, Republican-Alaska, and Senator Bill Cassidy, Republican-Louisiana -- wrote FERC Tuesday seeking details about how the agency plans to expedite its reviews.
FERC Chairman Kevin McIntyre has previously promised agreements with other regulators, such as the departments of Transportation and Energy, to streamline the processing. There is also potential to use more third-party contractors and to find efficiencies in FERC's own processes, he has suggested.
FERC Commissioner Neil Chatterjee several times on Twitter discussed ideas for easing staffing constraints amid stiff competition for qualified lawyers and engineers. Legislation introduced in July by Representatives Pete Olson, Republican-Texas and Gene Green, Democrat-Texas, aims to allow FERC to pay higher salaries for specialized staff.
Permitting timelines are not the only headwinds. US LNG developers have worried their competiveness could be harmed by steel tariffs driving up materials costs as well as threatened retaliatory tariffs by China on US LNG.
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