Presenter: Larry McKinney

Commission Agenda Item No. 13
Liquefied Natural Gas (LNG) Facilities in Texas – Assessing the Potential for Adverse Impacts to Fish and Wildlife Resources
May 2006

I. Executive Summary: Over the last several years, there has been a rush to propose and permit facilities that process liquefied natural gas (LNG) in the United States. In those proposal facilities, natural gas is super-cooled to a liquid in the exporting country and shipped to the U.S. in specialized tankers. Receiving terminals must have capability to convert the LNG back to gaseous form (regassification or vaporization), temporarily store it, and distribute natural gas to markets via pipelines. Currently five such facilities operate in the continental United States and some 38 additional facilities are proposed. Prior to 2002, only one facility existed on the Gulf Coast. Currently there are 12 terminals that have been licensed, proposed or in the process of licensing in or near Texas (includes one terminal on the Louisiana side of the Sabine Pass).

There are two categories of LNG facilities - Onshore and Offshore. Nine of the Texas facilities are sited onshore and the remainder offshore of Texas - Louisiana. The most significant environmental issues associated with LNG facilities involve the vaporization process. Closed- loop systems generally use a portion of the incoming LNG to heat the product to a transportable gas. All of the inshore Texas facilities propose to use this approach. The offshore facilities propose to use the open-loop process, which allows flow-through seawater to warm the LNG for transport.

Staffs have worked closely with those proposing LNG facilities in Texas to minimize impacts wherever possible and have been successful to some degree. All onshore facilities will use a closed-loop system and there have been some innovative proposals to benefit fish and wildlife resources. Numerous concerns remain and mitigation for those impacts has been the subject of considerable discussion with permit applicants for some of these proposed facilities. Offshore facilities continue to propose open-loop systems that will use large water volumes to heat the LNG. All natural resource management agencies (federal and state) as well as conservation organizations are concerned about potential impacts on fish eggs and larva.

Staff will brief the Commission about these issues and efforts to address the concerns summarized herein.