WASHINGTON – The Senate agreed Wednesday to give federal regulators clear authority to override state objections to the siting of liquefied natural gas (search) import facilities, rejecting a proposal that would have allowed governors to block a project because of public health or environmental concerns.
Supporters for increased federal authority over LNG import facilities argued that the country will require huge increases of natural gas imports in coming years and that state-imposed roadblocks could hamstring needed import projects. They argued states will continue to have a say in siting decisions because of various local and state requirements for local permits.
The Senate rejected, 52-45, a proposed amendment to a sweeping energy bill that would have allowed governors to veto a final LNG siting decision by the Federal Energy Regulatory Commission. The Senate was expected to finish the energy bill this week.
The chamber was also taking up a proposal to require automakers to increase their vehicles' fuel economy and another amendment that would address climate change by requiring industry to reduce heat-trapping "greenhouse" pollution.
Both proposals are opposed by the White House and were viewed as unlikely to be approved.
The Senate made clear on Tuesday its support for President Bush's climate policies that rely solely on voluntary industry efforts to curtail the growth of greenhouse emissions. By a 66-29 vote, the Senate endorsed a climate policy that increases government support for developing new technologies to reduce greenhouse emissions and avoids the imposition of mandatory emission caps.
The LNG siting issue raised concerns from many senators from coastal states where dozens of import facilities are being proposed.
"States must have a role in siting LNG facilities in order to protect the welfare of their citizens," argued Sen. Dianne Feinstein, D-Calif., whose state has been the focus of a legal fight over authority of FERC to approve an LNG terminal in Long Beach despite state objections.
The energy bill includes a provision clarifying that FERC has the "exclusive" authority to make a final decision on an LNG import facility.
"Any governor that wants to participate ... has ample opportunity to do that," maintained Sen. Pete Domenici, R-N.M., adding that there were "a myriad" of zoning, environmental and other permits that a project still must obtain.
But he said that the country is dependent on natural gas and will need a growing amount of LNG imports to meet demand. "The country can't wait around and say we'll wait until this matter is litigated to see how many governors will say no until we find one that will say yes," said Domenici.
A growing number of coastal states, especially in heavily populated areas of the Northeast and West, have raised concerns over siting LNG sites because of the potential for a spill or possible terrorist attack against a site or incoming LNG tanker.
A report last year by the Sandia federal lab concluded terrorists could tear one or more holes in a tanker that would release LNG and create an intense fire capable of causing significant property damage and serious burns as far as a mile away.
"We're not talking about the siting a neighborhood ballpark or a Wal-Mart," said Sen. Olympia Snowe, R-Maine, where communities have rejected several LNG projects. "It's a state rights issue, plain and simple."
There are four LNG import facilities currently operating in Massachusetts, Maryland, Georgia and Louisiana. More than 40 additional facilities have been proposed, including some in heavily populated areas where the projects have generated strong local and state objections.
While currently LNG accounts for only about 3 percent of U.S. natural gas use, the Energy Department estimates the market share will grow to more than 20 percent by 2025 because of a decline in domestic natural gas supplies.
LNG is natural gas that is cooled to minus-260 degrees Fahrenheit to liquid form so it can be shipped on a specially designed tanker. At an import facility that liquid is stored in tanks before being gradually warmed and returned to a gaseous state and shipped through conventional pipelines.