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Gold/Mining/Energy : LNG -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (360)	5/17/2005 7:36:21 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 919

LNG process put on hold Tuesday, May 17, 2005 By BEN RAINES Staff Reporter al.com The U.S. Coast Guard has suspended the approval process for a liquefied natural gas terminal that would be built 11 miles south of Dauphin Island, in an attempt to address new concerns from federal regulators about potentially damaging effects on fish populations in the Gulf of Mexico. An April letter from the U.S. Environmental Protection Agency insists that the Coast Guard review the possibility that fish numbers in Alabama and Mississippi waters would be hit especially hard by the use of 50 billion gallons of seawater each year. EPA officials also described the possibility of a 5-mile-long plume from the facility that would carry 25 times more sediment than the average flow of the Mississippi River. And they warned that impacts on redfish, shrimp, crabs and other Gulf sea life could be "compounded over time" as the facility continues to take a toll on the eggs and larvae of these creatures. ConocoPhillips Corp. proposes to install an enormous concrete island called Compass Port and receive shipments of super-cooled natural gas arriving aboard some of the largest vessels in the world. The terminal would use the billion gallons of seawater each year to reheat the liquid gas cargo and return it to the familiar vaporous form used by industry and for residential heating and cooking. Federal fisheries experts said water run through the terminal would be "sterilized," with virtually all life in it eliminated. Coast Guard officials said the hold on the permit application would last until ConocoPhillips responds to the issues raised by the EPA. The information supplied would then have to be analyzed by the Coast Guard and incorporated into a final Environmental Impact Statement. It is unclear how long the permitting hold will be in effect. ConocoPhillips and other companies are racing to get LNG terminals up and running in the Gulf, with billions of dollars' worth of business at stake. Several such terminals have been proposed around the Gulf. Worry over the cumulative impact on Gulf fisheries has generated strong opposition from shrimpers, environmentalists, recreational and commercial fishermen and federal scientists because the young of numerous species -- most of them too small to swim away from the pull of the machinery -- would be sucked through a radiator-like system and killed. Natural gas: The existing, land-based LNG terminals in the United States use natural gas to reheat the liquid cargo. Coast Guard documents estimate that offshore terminals would have to use between 1 and 2 percent of the gas brought in each year for reheating, if the companies were not allowed to use the warm seawater. ConocoPhillips plans to bring in more than $1 billion worth of gas each year, based on a Mobile Register calculation including the number of deliveries, the holding capacity of the ships and current market prices. Using seawater to warm the gas will save between $20 million and $40 million a year, according to an Environmental Impact Statement for another terminal proposed offshore of Louisiana. Shell Oil indicated that it would abandon its terminal off the Louisiana coast if the government required the use of natural gas for reheating, according to news accounts. ConocoPhillips officials declined to say whether they would abandon their project if regulators deny permission for the seawater gas warming method. In the April comment letter, EPA officials wrote that the company's Draft Environmental Impact Statement was inadequate from a number of perspectives, and failed to properly address the impact of killing millions of baby fish, shrimp and crabs every day of the year. Decision made: Last week, the Coast Guard informed ConocoPhillips that the company's application was on hold until concerns raised by EPA and other agencies have been addressed. The Coast Guard wrote that the additional information -- and the temporary halt in the permit process -- would be necessary in order to comply with federal law. Linsi Crain, a spokeswoman with ConocoPhillips, acknowledged that the permit had been delayed. "We will continue to work with the Coast Guard to get a more robust Environmental Impact Statement, and I think that's where we're moving," Crain said. EPA scientists warned that ConocoPhillips may have in essence diluted the impacts of the facility by analyzing its effects on fish stocks throughout the entire Gulf of Mexico. EPA noted that the influence of the Mississippi River means populations of marine creatures in Alabama, Mississippi and along the Florida Panhandle are somewhat isolated from the rest of the Gulf of Mexico. According to EPA, larval animals killed by a terminal off Alabama will not be replaced by larval creatures from other parts of the Gulf. In effect, this section of the coast would simply lose millions of eggs and juvenile sea creatures every day. "It is reasonable to expect, therefore, that the deepwater port's fishery impacts will be localized with effects experienced mainly by the existing Mississippi-Alabama shelf fish stocks," reads the EPA letter. Coastal fish: The agency asks the Coast Guard to predict the terminal's impact on fish populations directly off Alabama and Mississippi, instead of solely measuring the effect of the terminal against Gulfwide fish populations as the impact statement does. The National Marine Fisheries Service has previously performed that calculation, and found that the Compass Port terminal could wipe out 25 percent of the annual redfish harvest in both states. Other species, including crabs and shrimp, could be similarly affected, according to fisheries scientists. In addition to the loss of fish large enough to be legally kept by fishermen, the agency states that the breeding population of numerous species could be substantially reduced, and warns such a loss would be "compounded" the longer the facility operates. ConocoPhillips "should provide an analysis of the effects of potential brood stock loss to fish populations and long term effects of such loss on fisheries," reads the EPA comment. Sediment plume: The EPA letter also raised the issue of a large and muddy sediment plume that would be generated by the terminal's use of seawater. The plume, which is expected to extend about five miles from the facility, had escaped the attention of many state and federal officials. Mud and sand on the sea floor would be disturbed and spread into the water column by the 150 million gallons of water expelled from the terminal each day during operation. The plume would be about 25 times muddier than the Mississippi River, according to data in the Compass Port impact statement and hydrological studies detailing the river's average sediment load. The EPA letter suggests that the effects of such a plume have not been adequately addressed and should be viewed as "a significant long-term, adverse water quality impact." "This is new to me. This was never mentioned in anything I read," said Steve Heath, with Alabama's Division of Marine Resources. "We're talking about changing the bottom contour. Obviously, whatever lived there would be directly impacted ... it's definitely something to be concerned about." Heath said he was pleased that the EPA had become involved. "They're going to slow the process down, and that's the wise thing to do in order to get a better understanding of these things that could have such a tremendous impact out there," he said. (Staff Reporter Russ Henderson contributed to this report.)