PDF _ RL32073 - Liquefied Natural Gas (LNG) Infrastructure Security: Issues for Congress
13-May-2008; Paul W. Parfomak; 31 p.

Update: Previous releases:
March 16, 2005
June 3, 2005

Abstract: Liquefied natural gas (LNG) is a hazardous fuel shipped in large tankers from overseas to U.S. ports. LNG is also manufactured domestically and is often stored near population centers. Because LNG infrastructure is highly visible and easily identified, it can be vulnerable to terrorist attack. Since September 11, 2001, the U.S. LNG industry and federal agencies have put new measures in place to respond to the possibility of terrorism. Nonetheless, public concerns about LNG risks continue to raise questions about LNG security. Rising natural gas prices and the possibility of domestic shortages are sharply increasing LNG demand. Faced with the widely perceived national need for greater LNG imports, and persistent public concerns about LNG risks, some in Congress are examining the adequacy of security provisions in federal LNG regulation.

LNG infrastructure consists primarily of tankers, import terminals, and inland storage plants. There are seven active U.S. terminals and proposals for numerous others. Potentially catastrophic events could arise from a serious accident or attack on such facilities, such as pool or vapor cloud fires. But LNG has a record of relative safety for the last 40 years, and no LNG tanker or land-based facility has been attacked by terrorists. The likelihood and possible impacts from LNG attacks continue to be debated among experts.

Several federal agencies oversee the security of LNG infrastructure. The Coast Guard has lead responsibility for LNG shipping and marine terminal security under provisions in the Maritime Transportation Security Act of 2002 (P.L. 107-295) and the Security and Accountability for Every Port Act of 2006 (P.L. 109-347). The Office of Pipeline Safety (OPS) and the Transportation Security Administration (TSA) both have security authority for LNG storage plants within gas utilities, as well as some security authority for LNG marine terminals. The Federal Energy Regulatory Commission (FERC) approves the siting, with some security oversight, of on-shore LNG marine terminals and certain utility LNG plants. The Coast Guard, OPS and FERC have agreed to cooperate in the siting approval of new LNG facilities, inspection and operational review of existing facilities, informal communication, and dispute resolution.

Federal initiatives to secure LNG are still evolving, but a variety of industry and agency representatives suggest they are reducing the vulnerability of LNG to terrorism. As Congress continues its oversight of LNG, it may consider whether future LNG security requirements will be appropriately funded, whether these requirements will be balanced against evolving risks, and whether the LNG industry is carrying its fair share of the security burden. Congress may also act to improve its understanding of LNG security risks. Costly “blanket” investments in LNG security might be avoided if more refined terror threat information were available to focus security spending on a narrower set of infrastructure vulnerabilities. Finally, Congress may initiate action to better understand the security and trade implications of efforts to promote U.S.-flagged LNG tankers and U.S. crews. This report will be updated as events warrant.

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Topics: Energy, Natural Resources, Risk & Reform

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