LNG SAFETY AND SECURITY Michelle Michot Foss, Ph.D. Chief Energy Economist and CEE Head 1801 Allen Parkway Houston, Texas 77019 Tel 713-654-5400 Fax 713-654-5405 [email protected] www.beg.utexas.edu/energyecon/lng June 2012 © Center for Energy Economics No reproduction, distribution or attribution without permission. Table of Contents Executive Summary ...................................................................................... 5 Introduction ................................................................................................. 8 Safety Considerations in LNG Operations .......................................................... 9 LNG Properties and Potential Hazards ............................................................ 12 LNG Properties ........................................................................................ 12 Types of LNG Hazards ............................................................................... 17 How Is a Safe, Secure LNG Value Chain Achieved? .......................................... 20 Brief Overview of the LNG Value Chain ........................................................ 21 The LNG Value Chain in the U.S. and North America ..................................... 21 Application of Safety Conditions to the LNG Value Chain ................................ 29 Conclusions ............................................................................................... 45 Appendix 1: Descriptions of LNG Facilities ...................................................... 48 Appendix 2: LNG Regulations ....................................................................... 53 Appendix 3: Who Regulates LNG in the U.S.? .................................................. 56 Onshore/Marine ....................................................................................... 56 Offshore ................................................................................................. 56 Federal Regulation of LNG ......................................................................... 57 The Department of Energy (DOE) ............................................................ 57 The Federal Energy Regulatory Commission (FERC) ................................... 57 The Department of Transportation (DOT) .................................................. 58 The U.S. Coast Guard (USCG) ................................................................. 59 The U.S. Environmental Protection Agency (EPA) ....................................... 59 State regulation of LNG............................................................................. 59 Local regulation of LNG ............................................................................. 60 LNG Safety and Security - 2 – Non-Governmental Regulation of LNG ......................................................... 60 Appendix 4: Risk Perception ......................................................................... 62 Terrorism ................................................................................................ 62 Earthquakes ............................................................................................ 63 Maritime Incidents ................................................................................. 64 Operational Incidents ............................................................................. 65 Appendix 5: Major LNG Incidents .................................................................. 66 Cleveland, Ohio, 1944 .............................................................................. 68 Staten Island, New York, February 1973 ..................................................... 69 Cove Point, Maryland, October 1979 ........................................................... 70 LNG Vehicle Incidents ............................................................................... 70 Appendix 6: Glossary of Terms ..................................................................... 75 Appendix 7: Conversion Table ...................................................................... 77 List of Figures and Tables Figures Figure 1. Continuous Improvement of LNG Safety, Environmental, and Security Infrastructure ......................................................................................... 9 Figure 2. Critical Safety Conditions ............................................................... 10 Figure 3. Flammable Range for Methane (LNG) .............................................. 14 Figure 4. Summary Comparison of LNG and Other Fuels .................................. 17 Figure 5. LNG Value Chain .......................................................................... 21 Figure 6. LNG Liquefaction Export Facility in Kenai, Alaska ............................... 22 Figure 7. A Peak Shaving Facility ................................................................. 24 Figure 8. Typical LNG Receiving Terminal/Re-gasification Facility ...................... 24 Figure 9. The Energy Bridge™ System .......................................................... 25 Figure 10. A Satellite Storage Facility (left) and LNG Truck (right) .................... 27 LNG Safety and Security - 3 – Figure 11. U.S. LNG Facilities Storage Capacity .............................................. 28 Figure 12. U.S. Regional LNG Storage Deliverability ........................................ 29 Figure 13. Conceptual Design of Storage Tanks .............................................. 30 Figure 14. Single Containment Tanks ............................................................ 31 Figure 15. A Spherical Tank ......................................................................... 32 Figure 16. LNG Lagos - Membrane Type LNG Carrier ....................................... 32 Figure 17. Double Containment Tanks .......................................................... 34 Figure 18. Full Containment Tanks ............................................................... 35 Figure 19. Tank Section of a Spherical Moss Design ........................................ 36 Figure 20. Example Safety Zone: Cove Point ................................................. 39 Figure 21. LNG Jetty with Unloading Arms - ALNG .......................................... 48 Figure 22. Underground LNG tank: T-2 tank at Fukukita station of Saibu Gas Co., Ltd. ..................................................................................................... 50 Figure 23. In pit LNG storage tank ............................................................... 50 Figure 24. Open Rack Vaporizer ................................................................... 51 Figure 25. Seven Submerged Combustion Vaporizers, Lake Charles, La., Terminal .......................................................................................................... 52 Figure 26. U.S. LNG Regulators ................................................................... 56 Figure 27. LNG incidents before and after 1985 by ship type ............................ 65 Figure 28. Energy accident fatalities by source, 1907–2007 ............................. 68 Tables Table 1. Comparison of Properties of Liquid Fuels ........................................... 14 Table 2. Autoignition Temperature of Liquid Fuels ........................................... 16 Table 3. LNG Facilities in the U.S. and Japan.................................................. 64 Table 4. Major Energy-related Incidents Worldwide, 1907-2007 ....................... 66 Table 5. Major LNG Incidents ....................................................................... 72 LNG Safety and Security - 4 – LNG SAFETY AND SECURITY1 EXECUTIVE SUMMARY This briefing paper is the second in a series that describes the liquefied natural gas (LNG) industry and the increasingly important role that LNG may play in the nation’s energy future. The first paper, Introduction to LNG, briefs the reader on LNG and touches on many of the key issues related to the LNG industry. This paper’s first edition came out in October 2003 and deals with safety and security aspects of LNG operations. A third paper, The Role of LNG in North American Natural Gas Supply and Demand, followed in September 2004. All of these reports, with supplemental information, were compiled in a complete online fact book, Guide to LNG in North America, www.beg.utexas.edu/energyecon/lng. LNG has been transported and used safely in the U.S. and worldwide for roughly 40 years. The U.S. has three types of LNG facilities: LNG export, LNG import, and LNG peaking facilities. The U.S. has the largest number of LNG facilities in the world, scattered throughout the country and located near population centers where natural gas is needed. The LNG industry has an excellent safety record. This strong safety record is a result of several factors. First, the industry has technically and operationally evolved to ensure safe and secure operations. Technical and operational advances include everything from the engineering that underlies LNG facilities to operational procedures to technical competency of personnel. Second, the physical and chemical properties of LNG are such that risks and hazards are well understood and incorporated into technology and operations. Third the standards, codes, and regulations that apply to the LNG industry further ensure safety. While we in the U.S. have our own regulatory requirements for LNG operators, we have benefited from the evolving international standards and codes that regulate the industry.