[Congressional Record Volume 150, Number 73 (Friday, May 21, 2004)]
[Extensions of Remarks]
[Page E930]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCTION OF THE LIQUEFIED NATURAL GAS IMPORT TERMINAL DEVELOPMENT 
                              ACT OF 2004

                                 ______
                                 

                            HON. GENE GREEN

                                of texas

                    in the house of representatives

                         Thursday, May 20, 2004

  Mr. GREEN of Texas. Mr. Speaker, to counter the negative effects of 
soaring natural gas prices on the economy and consumers, Representative 
Gene Green (D-Houston) and Representative Lee Terry (R-NE) introduced 
legislation to simplify the siting of onshore Liquefied Natural Gas 
(LNG) terminals.
   ``In June 2003, Alan Greenspan testified before the Committee that 
LNG was critical for the future stability of our economy. It would be a 
great help to provide LNG with the same regulatory certainty we provide 
natural gas pipelines.''
  According to the National Petroleum Council, the United States is on 
course to pay an additional $1 trillion in natural gas costs over the 
next 20 years due to shortages. Along with increased domestic 
production and an Alaskan natural gas pipeline, LNG projects promise to 
help stabilize prices, but the permitting process for LNG facilities is 
uncertain and disputed, without clear lines between State and Federal 
authority.
   ``We need LNG, and we must make LNG terminals safe and secure. 
Current safety and security procedures and other proposals will be 
fully considered during this debate.''
   ``Unless we get LNG right, our Nation's $454 billion chemical 
industry and 1 million jobs could go the way of the steel industry. 
Electric power and heating bills are also crunching consumers. The 
Nation needs to address LNG in a meaningful way, and this legislation 
moves us on the right track.''
  A summary of The Liquefied Natural Gas Import Terminal Development 
Act of 2004 is attached.


                             Talking Points

       Q: Why give FERC all the authority?
       A: Like natural gas pipelines, LNG sites are national 
     significant energy projects involving international and 
     interstate commerce. FERC has stringent siting restrictions 
     in place for LNG currently.
       FERC believes they have this authority, but because 
     interest in LNG projects have exploded, it may be necessary 
     to spell FERC's authority out.
       Q: What about state agencies that want to stop them?
       A: We think they are making political plays. There are 
     little if any air emissions or water discharges. The 
     facilities have tough safety standards under FERC and tough 
     security standards under the Coast Guard (Maritime 
     Transportation Security Act).
       We are saying that the states cannot question a ``public 
     interest'' determination by FERC, because that is an 
     interstate commerce determination.
       Q: What about local zoning regulations?
       A: FERC has tough siting standards that almost certainly 
     preclude a site violating zoning standards. (There must be a 
     buffer zone that is great enough so that flammable vapors 
     will not reach beyond facility property lines. FERC also 
     enforces DOT and National Fire Administration regulations 
     that limit siting to appropriate areas.)
       If we need language to reassure on local zoning, we are 
     open to that. We are not trying to change LNG siting 
     standards--we just stop states from arbitrarily blocking 
     projects.
       Q: What about security?
       A: All facilities will be covered by the Maritime 
     Transportation Security Act. In addition, there are 
     extraordinary procedures beyond that law for security, 
     including ship inspections, escorts and site security 
     coordination with local law enforcement.
       One proposal is using American crews on LNG tankers. We are 
     open to adding security measures to the bill if the debate we 
     have indicates more measures are needed.
                                  ____


               Summary of the Terry-Green LNG Legislation


                   Why we need to expand LNG capacity

       Because of its efficiency and environmental benefits, 
     natural gas use has increased dramatically over recent years. 
     Demand has caught up with supply, and natural gas prices are 
     up more than 80 percent over the past four years. At the same 
     time, U.S. natural gas production is falling at about two 
     percent a year.
       Over the next two decades, U.S. natural gas consumption is 
     expected to rise 40 percent (and 70 percent throughout North 
     America). It is expected that U.S. production will meet only 
     75 percent of the nation's demand by 2025. This is especially 
     sobering considering that the United States consumes about 25 
     percent of the world's natural gas production--but holds only 
     three percent of the world's natural gas reserves.
       We must look for new options now, if we are to avoid the 
     adverse economic implications. (According to the National 
     Petroleum Council, the United States is on course to pay an 
     additional $1 trillion in natural gas costs over the next 20 
     years due to shortages.) The Rocky Mountains, the Gulf of 
     Mexico and Alaska will continue to be a vital part of our 
     supply. However, expanding our liquefied natural gas (LNG) 
     capacity is also critical, so we may bring natural gas from 
     more ample supplies from around the world--creating a 
     ``safety value'' to provide some leverage in determining 
     natural gas availability and prices.
       LNG--natural gas chilled to -260 degrees Fahrenheit--allows 
     the safe transportation of gas from large-producing fields in 
     places such as western Africa, the Caribbean, Malaysia, 
     Australia, Qatar, South America, Russia, and Eastern Europe. 
     LNG has been safely transported by ship for nearly half a 
     century, with countries such as Japan receiving LNG shipments 
     every 20 hours.
       Currently, around 30 LNG terminals are in various stages of 
     planning in the United States. With natural gas prices up 
     from $1.50/thousand cubic feet pre-1995 to more than $6 
     today, boosting LNG's role in our energy portfolio is a 
     sensible step.


             What the Terry-Green LNG legislation would do

       This legislation would compliment the pending energy bill 
     (H.R. 6) by working to add LNG to our energy portfolio. It 
     would also provide parity between the application/review 
     process for on-shore and offshore terminals. Specifically, 
     this bill would:
       Eliminate jurisdictional conflicts and legal ambiguities on 
     siting and construction of LNG terminals. Jurisdictional 
     conflicts between federal and state agencies threaten to 
     delay or kill new LNG projects. Since the importation of LNG 
     is a matter of foreign commerce, the Terry-Green bill would 
     clarify that approval and siting authority for LNG facilities 
     is most appropriately determined at the federal level, as 
     established under the Natural Gas Act. It also clarifies that 
     a public interest finding by the Federal Energy Regulatory 
     Commission (FERC) regarding the siting, construction, 
     expansion and operation of LNG terminals under the Natural 
     Gas Act is pre-emptive, and is not subject to second-guessing 
     under state or local law.
       Create a lead agency for LNG project review and permitting. 
     Currently, several federal departments, and some state 
     agencies, have a role in the approval process for 
     construction or expansion of an onshore LNG terminal. This 
     bill clarifies that the FERC is the lead agency, to 
     streamline environmental review and permitting. Other federal 
     agencies--and state agencies with authority delegated by 
     federal law--keep their independent regulatory 
     responsibilities. However, such agencies must act in a manner 
     consistent with the public interest determination made by the 
     FERC under the Natural Gas Act.
       Set a deadline for FERC review of LNG terminal 
     applications. Currently, there is no time requirement for 
     FERC review of a LNG terminal application. To ensure a prompt 
     evaluation, this bill requires the FERC to issue its decision 
     one year after the application has been completed. The bill 
     also gives the FERC authority to establish deadlines for 
     other agencies making permitting decisions, taking into 
     account timelines established by other Federal statutes.
       Remove regulatory uncertainties for those building/
     expanding onshore LNG terminals. This bill codifies the 
     FERC's important ``Hackberry'' decision on open access 
     requirements, giving developers the certainty they need 
     regarding economic regulation. This policy is necessary to 
     encourage the development of new LNG capacity, especially 
     considering a typical onshore LNG project can cost more than 
     $500 million.

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