WASHINGTON –A detailed Sandia National Laboratories and Department of Energy report offering chilling scenarios about the effects of a terrorist attack on ship-borne liquefied natural gas (LNG) exploded into the headlines last month—and the news coverage appeared to lend credence to arguments brandished by opponents of building more of the marine terminals to handle increased fuel imports.

“Terror attack the top danger of LNG transport, study finds,” trumpeted the San Diego Union-Tribune. Up the coast, the headline in the Long Beach Press Telegram, the hometown newspaper of one of the country’s largest ports, where a new LNG facility is being contemplated, noted darkly, “Attack on LNG a deadly scenario—Fire from terror strike on tanker could burn skin up to a mile away.” 

Meanwhile, in Texas, the U.S. petrochemical industry heartland, where as many as eight LNG terminals are contemplated along the Gulf of Mexico, an article in the Houston Chronicle reported: “LNG ship attack a potential disaster—Massive injury, property damage envisioned in federal report.” 

And in Massachusetts, where LNG tankers plying through Boston harbor pass a few hundred yards from the downtown area, the Boston Globe reaffirmed vivid local interest in the story with the headline: “Study spells out high toll on city in LNG attack.”

LNG and deep-water ports, it seems, have suddenly become a very hot issue.

Quickly, the U.S. Coast Guard let it be known that it had convened a working group to draw up guidelines for protecting LNG tankers in harbor areas from terrorist attack—protocols that could be used in the construction of new terminals. (The construction of more than 40 terminals around the country is currently being considered; many as eight are planned in the next five years, on all three coasts, several near major urban centers.)

Predictably, anti-LNG activists from Maine to California hailed the 166-page unclassified part of the Sandia study (detailed discussions of specific threats contained in a classified version of the report were not disclosed) as definitive, slam-dunk support for their cause.

“This confirms everything that we have been saying,” said Bry Myown of the Long Beach (Calif.) Citizens for Utility Reform, which is fighting a proposed $400 million LNG terminal at the city’s sprawling port, in a San Diego Union-Tribune news story. “We are already a terrorist target. We move 70 percent of the cargo on the West Coast.” 

LNG opponents point out that the report by Sandia, the respected federal research facility, was by far the most definitive look at the risks faced by tankers carrying the super-cooled fuel; all the more so because it used innovative, highly-sophisticated computer models to analyze new and existing data.

The headlines and subsequent brouhaha, however, told only part of the story, proponents of building more LNG facilities and others say.

“I do think that people have read more into the report than it really is saying,” Dennis Bryant, a senior maritime specialist with the Washington law firm of Holland & Knight, told Port Security News in a telephone interview.

“I also find it interesting that this report and the ones that have preceded it by various authors have been almost exclusively theoretical, based on computer analysis and prognostication,” Bryant added.

HEAT AND LIGHT

Not only is LNG is a cheaper, cleaner burning fuel, proponents argue, which benefits both consumers and efforts to protect the environment.

The heat generated by the Sandia report, the proponents add, has outpaced the light shed by its findings—and in some ways has overshadowed the debate about other important issues, such as how many LNG import facilities the country needs; how many of these should be deepwater ports; where they should be located according to business models, and how many LNG carriers can the economy support.

There is also a budding jurisdictional dispute, legal experts say, regarding how much authority the federal government, and particularly the Federal Energy Regulatory Commission, has in determining the placement of shore-side LNG facilities, and whether it is already pre-empting the states in that role.

Critics of the press coverage note that after the September 11, 2001 terrorist attacks, threats from the shadowy al-Qaeda are not unique to LNG shipping, being just one of any number of possible threat scenarios, and that the mere existence of such potential dangers has not stopped Americans from, for example, traveling by air or working in skyscrapers.

They also point out that the path-breaking study itself was nonetheless also limited in important ways, even as it recommended that “the most rigorous deterrent measures” be used to ensure security, rather than a flat-out prohibition of tankers from carrying LNG near highly populated areas. 

For example, observers point out, the Sandia report did not evaluate the chances that a terrorist attack would succeed—an important point, given the rigorous security procedures already used by the U.S. Coast Guard and other law enforcement agencies, as well as the protections afforded by the double-hulled construction of the LNG tankers.

The Sandia study did note, however, that, since 9/11, additional security measures designed to “reduce the potential for intentional LNG spills over water” have been implemented. These include “earlier notice of a ship’s arrival (from 24 hours to 96 hours), investigation of crew backgrounds, at-sea boardings of LNG ships and special security sweeps, and positive control of an LNG ship during port transit.”

“Risks from intentional events, such as terrorist attacks, can be significantly reduced with appropriate security, planning, prevention, and mitigation,” the report says in a section on “key conclusions.” While the consequences “from an intentional breach can be more severe than those from accidental breaches,” the Sandia researchers found, “(m)ultiple techniques exist to enhance LNG spill safety and security management and to reduce the potential or a large LNG spill due to intentional threats.

“If effectively implemented,” the study said, “these techniques could significantly reduce the potential for an intentional LNG spill.”

"The Sandia study confirms that LNG tankers are very strong ships and that the site specific risk management activities that the Coast Guard already has in place can significantly reduce the possibility of a major loss of cargo from an accident or attack,” said Rear Adm. Thomas H. Gilmour, Coast Guard assistant commandant for marine safety, security and environmental protection, in response to the report’s release.

"The classified version of the study will provide us even more information, and will assist the Coast Guard in further refining our risk reduction efforts to prevent the types of attack that have the highest potential for a major loss of cargo,” he added.

Some observers also point out that the industry has had a nearly spotless safety record in more than four decades of LNG shipping operations. 

“LNG carriers and other liquefied gas carriers are about the safest ships out there—they have a fabulous safety record,” Bryant said. “There was an incident about a year ago in which a U.S. nuclear submarine surfaced underneath an LNG carrier and punched a hole in the bottom, and still couldn’t penetrate the cargo tank. These are intentionally very, very well-built vessels, and very well maintained.” 

(Even before the Sandia report was released, the authoritative British maritime publication, Fairplay, led an October 21, 2004 cover story, “LNG fights scare tactics,” by noting: “As an industry with a near-unblemished safety record spanning its 45-year existence, liquefied natural gas shipping interests are aghast at the latest irresponsible attempts to undermine its credibility.”)

Proponents emphasize that the Sandia study noted that its conclusions were drawn from computer simulation; they had to be, because there have been no major accidents involving a modern LNG tanker, and thus no data from an actual spill to be studied. 

In fact, the only time a liquefied gas carrier was attacked by missiles—in the Persian Gulf in October 1984—the ship was able to return safely to port after the damage from three armor-piercing rockets was contained and the crew returned home without injury.

WHY LNG?

LNG, which is transported by large tankers from overseas to terminals where it is unloaded, is then processed and sent via pipeline to users. Flat domestic fuel production and a growing demand for natural gas, particularly for electric power generation, has led to a surge in LNG imports into the United States from the Pacific Rim, the Middle East, and other regions. 

As noted in a recent report by the National Petroleum Council, “Balancing Natural Gas Policy—Fueling the Demands of a Growing Economy,” traditional North American production “will provide 75 percent of long-term U.S. gas needed, but will be unable to meet projected demand,” while “… New, large-scale resources such as LNG and Arctic gas are available and could meet 20-25 percent of demand.”

While in 2004, LNG accounted for just over two percent of the natural gas demand in the United States, by 2025, according to the Energy Information Administration, liquefied natural gas is expected to account for 15 percent or more of the nation’s gas supply. In New England, a region where the LNG issue is hotly debated, the economy depends on the super-cooled fuel for up to 20 percent of its energy.

Currently, four marine LNG terminals operate in the United States: Lake Charles, Louisiana; Everett, Massachusetts; Elba Island, Georgia, and Cove Point, Maryland.

Because an important factor in siting new LNG terminals is their proximity to a market—high demand but limited supply areas—many of the more than 40 marine LNG terminals under consideration are proposed for near or adjacent to major population centers.

WHAT THE SANDIA REPORT SAID

Whether one supports LNG marine terminals or opposes them, it is clear that the Sandia report has fundamentally altered the atmosphere in which the debate takes place. 

The conclusions drawn from it, however, “depends on who is reading it,” according to one analyst consulted by Port Security News. “The LNG industry generally reads it as overall favorable; the opponents of putting facilities in their backyard see it as justification (for their arguments) to have them build it somewhere else.”

The study reported in its opening sentence that, before it was undertaken, “While recognized standards exist for the systematic safety analysis of potential spills or releases from LNG storage terminals and facilities on land, no equivalent set of standards or guidance exists for the evaluation of the safety or consequences from LNG spills over water.”

It noted that while in its minus-260 degrees liquid state, LNG cannot explode nor is it flammable. However, if a missile or a bomb tears a hole in a vessel or a storage tank, the liquid released would be transformed into gas—and possibly result in a raging inferno.

The report analyzed when might happen as a result of “several credible” terror scenarios, including attacks from missiles, airplanes or a rocket-propelled grenade; the ramming by an explosives-bearing boat, like the October 2000 attack on the USS Cole, or internal sabotage.

The study found that a terrorist attack on a tanker could, in theory, cause a thermal blast that would cause major injuries and buildings to catch fire more than a third of a mile away, and cause second-degree burns on exposed skin for up to a mile.

The study also concluded that foam insulation used on many LNG tankers would likely decompose under the searing heat from a fire, which “could lead to rupture or collapse” of adjacent tanks, leading to more intense fires of longer duration. Such events, it said, “cannot be ruled out, especially for larger spills.”

The Sandia report also addressed previously little-debated dangers, such as the possibility that an LNG explosion could cause cascading blasts at nearby power stations or other facilities. It added: “Strategies to prevent large, coordinated events can be developed but can be costly.”

REMEMBER THE GAZ FOUNTAIN!

Bryant pointed out that the only liquefied gas tanker that has fallen prey to an armed attack was the Gaz Fountain, a first-generation fully refrigerated vessel that was hit by three “Maverick” TV-guided, air-to-ground armor-piercing rockets on the morning of October 12, 1984, after being stalked by an Iranian fighter plane during the Iran-Iraq “tanker wars” in the Arabian Gulf.

The explosive blast from one rocket resulted in escaping gas from ruptured pipework catching fire; another missile penetrated the deck and detonated above a cargo tank, causing LPG to ignite a torch-like flame that thrust as high as 600 feet into the sky.

A conventional LPG (liquid petroleum gas) carrier built in 1969, with three fully refrigerated, free-standing prismatic cargo tanks surrounded by loose perlite insulation, all the Gaz Fountain’s safety controls and fire-fighting equipment were either partially or wholly destroyed in the explosions or ensuing fires.

After being hit, the Gaz Fountain crew tripped the cargo emergency shut-down system, stopped its engines, and then abandoned ship. Later, after the fires on the ship were successfully extinguished and its gas-tight integrity restored while still under tow off Dubai, it was subsequently successfully salvaged and put back into service.

LPG has “some of the same characteristics” as does LNG, noted Bryant, the Holland & Knight maritime specialist, “and for some factors is even more dangerous for a ship—for one thing, it is heavier than air, so it settles onto the ocean surface rather than rising into the air as it escapes.”

Neither the Sandia study, nor those that came before it, Bryant noted, “talk about the one time in history that a bulk liquid carrier was attacked”—the Gaz Fountain—in an episode “that turned out not to be catastrophic.

“I think it is interesting that no one talks about it … a very clear instance of an aggressive attack on a liquid bulk carrier,” Bryant said. He added that because many of the studies on liquid gas issues are prepared by opponents of LNG, they “don’t want to acknowledge that it might be possible that this stuff might not be quite as hazardous or horrendous as some people think it is—and I’m not saying that it is absolutely safe.

“But if you read these studies, you would think that the ships are likely to blow up and disintegrate, killing the crew and anyone within at least within 500 meters, if not further. Yet (in the case of the Gaz Fountain), it didn’t happen. ” 

NIMBY TO THE RESCUE?

Opposition to marine LNG facilities (referred to by one observer as “part of the old NIMBY process—‘not in my backyard’”) is strongest in areas where such installations already exist near population centers or are viewed as potential sites for future development. 

The anti-LNG sentiment is particularly intense in the Northeast and West Coasts, although less so along the Gulf of Mexico, where people are used to and comfortable with the petrochemical industry. In Louisiana and Texas, where a number of sites are proposed, local opposition to them is virtually nil.

One of the places where the role of LNG is most hotly debated is Boston. In the wake of the 9/11 attacks, the Coast Guard shut Boston harbor to LNG tanker traffic, although it was later reopened, despite a suit filed by Mayor Thomas M. Menino to prevent their return.

Following publication of the Sandia report, Menino was quoted in the Gloucester Daily Times as saying: “It’s going to become obvious after this report that (an offshore facility) is the only real, viable option over the long term.”

The controversy in Bean Town was rekindled anew last year when former White House counter-terrorism director Richard Clarke wrote in a book, Against All Enemies: Inside America’s War on Terror, that al Qaeda operatives had entered the United States before the 9/11 outrage by stowing away on LNG tankers in Algeria and jumping ship in Boston. [It was subsequently reported that, while several Algerian stowaways may have entered the United States on LNG tankers, there was no evidence that they were al Qaeda operatives.]

Following release of the Sandia report in December, Gov. Mitt Romney, (R.), said that, while he was satisfied with the “quite complete and robust” security surrounding LNG deliveries through the harbor, the state was reinforcing security at storage facilities in Everett and other nearby fuel depots, the Boston Herald reported.

Rep. Edward J. Markey, (D.), whose congressional district includes the Distrigas facility in Everett, called the Sandia report “sobering,” adding: “Sandia’s findings only underscore the need to ensure that any future LNG terminals are sited remotely.”

A proposal to build another LNG facility, this one in Fall River, Mass., had earlier been met by opposition from nearly every area politician, as well as city-sponsored rallies against the idea.

In Long Beach, the city council announced that in the wake of the Sandia report, it would be holding a workshop to study plans by Sound Energy Solutions, a subsidiary of Mitsubishi Corp. to build a 27-acre LNG terminal in the bustling seaport that would open in 2008. The terminal, port officials say, could supply California with 10 percent of the natural gas it currently needs.

Last year, the Long Beach Harbor Commission hired the Oklahoma-based Quest Consultants, to conduct a year-long hazards analysis on the proposed facility. The firm was tasked with examining eight disaster scenarios, including reviews of possible aircraft or missile strikes on the LNG ships and storage tanks that might endanger the surrounding community.

Back in the Northeast, in Maine, Harpswell voters last March rejected a proposed $350 million LNG terminal. However, several months later, the Passamaquoddy Indians approved a tribal partnership with Smith Cogeneration Management, Inc. of Oklahoma City, to build a $30-million LNG site on tribal land in Passamaquoddy Bay.

Although the plan has split the local community into pro- and anti-LNG camps in both Maine and in neighboring New Brunswick, Canada, the tribe reached out to hire Savvy Inc, to run its public relations campaign—creating in the process an interesting alliance. 

Dennis Bailey, a spokesman for former Gov. Angus King, (I), and Savvy president, was the chief spokesman for Casinos No!, a group that spearheaded the defeat of a November 2003 ballot initiative that would have authorized the Passamaquoddy and Penobscot tribes to operate a casino.

“It was never about the tribe,” Bailey was quoted in Wednesday’s Portland Press Herald. 

“I told them casinos were not economic development.”

“I think LNG represents a great economic development opportunity,” Bailey added, “not just for the tribe but for the entire state.” 

Martin Edwin Andersen can be reached via Mick_Andersen@portsecuritynews.com