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Summary

Liquefied natural gas (LNG) is a hazardous fuel shipped in large tankers to U.S. ports from overseas. While LNG has historically made up a small part of U.S. natural gas supplies, rising gas prices, current price volatility, and the possibility of domestic shortages are sharply increasing LNG demand. To meet this demand, energy companies have proposed new LNG import terminals throughout the coastal United States. Many of these terminals would be built onshore near populated areas. The Federal Energy Regulatory Commission (FERC) grants federal approval for the siting of new onshore LNG facilities under the Natural Gas Act of 1938 and the Energy Policy Act of 2005 (P.L. 109-58). This approval process incorporates minimum safety standards for LNG established by the Department of Transportation. Although LNG has had a record of relative safety for the last 45 years, and no LNG tanker or land-based facility has been attacked by terrorists, proposals for new LNG terminal facilities have generated considerable public concern. Some community groups and governments officials fear that LNG terminals may expose nearby residents to unacceptable hazards. Ongoing public concern about LNG safety has focused congressional attention on the exclusivity of FERC's LNG siting authority, proposals for a regional LNG siting process, the lack of "remote" siting requirements in FERC regulations, state permitting requirements under the Clean Water Act and the Coastal Zone Management Act, terrorism attractiveness of LNG, the adequacy of Coast Guard security resources, and other issues. Faced with the widely perceived need for greater LNG imports, and persistent public concerns about LNG safety, Congress is debating changes to safety and environmental provisions in federal LNG siting regulation. H.R. 2830 would require the Coast Guard to certify it has adequate resources for LNG security before approving an LNG facility's security plan. S. 323 would require LNG terminal developers to identify employees and agents engaged in activities to persuade communities of the benefits of the approval. S. 1174 and S. 3441 would require state concurrence of federal siting approval decisions for onshore LNG terminals. H.R. 2042 includes provisions both for state LNG siting concurrence and for developer agent identification. H.R. 1564 would prohibit the construction of LNG terminals employing "a floating storage regasification unit" in estuaries of national significance. S. 1579 seeks to promote improved coordination among Federal, regional, state, and local agencies conducting LNG siting reviews under the Coastal Zone Management Act. S. 2822 would repeal FERC's exclusive LNG siting authority. H.R. 6720 would establish a national commission for the placement of natural gas infrastructure, including LNG infrastructure. Both industry and government analysts project continued growth in the demand for natural gas -- and a constrained ability for domestic gas producers to meet that demand. If policy makers encourage LNG imports, then the need to foster the other energy options may be diminished -- and vice versa. Thus decisions about LNG infrastructure could have consequences for a broader array of natural gas supply policies.

Related Legislation:
• H.R.2830
• S.323
• S.1174
• S.3441
• H.R.2042
• H.R.1564
• S.1579
• S.2822
• H.R.6720

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