Issue: April 2006
The Price of Gas

A proposed LNG terminal in Baltimore raises questions of safety for the Bay.


     They’re still a long way off, barely hull-up on the horizon. But the specter of LNG (liquefied natural gas) tankers lumbering in and out of Baltimore already is raising questions about safety and inconvenience for Bay residents-including recreational boaters. And experience elsewhere suggests that the tougher the safety rules, the greater the inconvenience.

     The AES Corp., an international energy company based in Arlington, Va., has an option to buy land at Sparrows Point, where it wants to build an LNG terminal. AES hasn’t formally asked permission from the Federal Energy Regulatory Commission (FERC), but it already has conducted exploratory talks, hired public relations help and met with the public as well as elected officials. AES hopes for federal approval by the end of 2007 and says the $400 million facility could start operating by late 2010.

     Arguing in favor of the proposal are economics and a strong record of tanker safety. Natural gas, or methane, is the cleanest-burning fossil fuel, heats most U.S. homes and is increasingly used to generate elect-ricity as coal-burning plants are phased out. The federal government predicts a steady increase in demand. But North American production has peaked, and natural gas can’t be piped across the oceans-which is where LNG tankers come in.

     To be shipped, natural gas is cooled (260 below) and compressed into liquid, which not only drastically reduces its volume, but also makes it nonexplosive. A fleet of more than 100 double-hull tankers, each typically more than 900 feet long, hauls it. There are now six U.S. terminals-including a recently reactivated one at Cove Point, on the Western Shore of the Bay just above the Patuxent River-but dozens more have been proposed. After the liquid gas is offloaded at the terminals, it is converted back to

vapor and piped inland. The increased supply of natural gas, economic theory holds, should bring prices down or at least slow their increase.

     Proposed terminals tend to meet stout resistance, though. Sites in Massachusetts and New Jersey are tied up in court challenges that could prevent their construction or delay it for years. Some fishermen complain they’ve been pushed off favored fishing grounds by LNG operations (as at Cove Point). In Baltimore, local media now report concerns about the environmental impact of a terminal at Sparrows Point, including whether the necessary dredging would hurt crabbing, and the terminal’s potential impact on property values.

     But the biggest concern, here and elsewhere, is safety-even though LNG tankers have a record of zero fatal accidents in more than a half century of operations. “Risks from accidental LNG spills, such as from collisions and groundings, are small and manageable with current safety policies and practices,” summarized a 2004 report from Sandia National Laboratories on the potential effects of a spill over water. Most likely, the liquid methane would just leak out and vaporize in the air.

     The complicating factor is the risk of terrorism, or as the Sandia study put it, an “intentional breach scenario.” In a report prepared for the state of Rhode Island, which is also studying proposals for LNG terminals, Richard A. Clarke (former antiterrorism adviser to four U.S. presidents) and his consulting company warned that al Qaeda already has used small boats to launch damaging attacks against ships-the U.S.S. Cole and the French supertanker MV Limburg-and might try similar tactics against an LNG tanker or terminal. In a deliberate attack, it’s more likely something would ignite the liquid methane as it vaporizes and mixes with air-causing an explosion and a high risk of “catastrophic” damage.

     To minimize the risk to LNG terminals and tankers, the Coast Guard is empowered to impose safety zones around the tankers and terminals. It’s too early to predict what the zones would be for LNG tankers coming up the Bay and offloading in Baltimore. “We don’t expect it will be much different [from the zones imposed around vessels offloading at Cove Point],” says Aaron Samson, managing director of LNG projects for AES Corp. Those zones are 500 yards around the terminal and 500 yards around tankers in transit, and AES spokeswomen Linda McCarty says the plans for the LNG facility call for it to be built more than 500 yards from the Brewerton Channel, through which large ships travel to other terminals in the Port of Baltimore.

     What about the zone surrounding the tankers heading to Sparrows Point? Lieutenant Andrew Ely, enforcement division chief for the Coast Guard’s Baltimore sector, says no decision has been made, but he adds a 500-yard zone “might be unreasonable . . . when you look at how much of the waterway would be closed down.”

     On the other hand, worry about a terrorist strike in a heavily urbanized area could lead to an even bigger zone around the ships while they are under way. That’s what happened in Massachusetts. After the September 11 attacks, the Bush administration shut down LNG shipments through Boston harbor for two weeks because Clarke warned the shipping was at risk of terrorist attacks. But New England needs the LNG, which has been providing much of its heating fuel for three decades with no tanker mishaps. Shipments were resumed. Then the Sandia Labs study renewed concerns about terrorism, so state and local officials demanded new restrictions, including an armed Coast Guard escort and an expanded exclusion zone.

     As described in the Clarke report for Rhode Island, here’s a typical procession when a tanker approaches the terminal: First come small, fast police boats; next come two Coast Guard patrol boats, armed with machine guns; six tugboats accompany the tanker itself; a Port Authority fireboat follows it, and a larger Coast Guard cutter brings up the rear. Coast Guard rules say all other vessels must keep clear two miles ahead, one mile behind and 3,000 feet on either side of a moving LNG tanker, with no vessels at all moving alongside it within the harbor. Police cars are posted on the piers and a bridge is closed as the tanker is towed beneath. Meanwhile, take-offs and landings are halted at Logan Airport as the vessel passes alongside several runways.