A Closer Look At The Proposed LNG Terminals

First Published: 2005-01-19

A lot of hot air is being expelled over liquified natural gas terminals that may soon be built in Freeport or on Ocean Cay near Bimini to pipe gas to power plants in Florida.

Some commentators are worried about the influence such a major foreign enterprise may have on the country, while others fear a serious accident or terror attack.

So what exactly are we looking at? Well, here's one newspaper account of an lng plant in northern California's Humboldt Bay that would be similar to those planned for the Bahamas:

"The tankers, 900 feet long by 150 feet wide, would be the largest ships ever to enter (the bay). These behemoths would become a familiar sight – at the rate of two per week. Their hazardous cargo, 33 million gallons worth per ship, would be pumped into storage tanks 150 feet tall and 250 feet across.

"A re-gasification plant would warm the fuel, which clocks in at a chilly 260 degrees below zero in its liquid state, back into its normal vapour form. The gas would then be sent via a 36-inch pipeline out to Red Bluff, a distance of 155 miles, where it would feed into the Central Valley's energy grid.

"It would also power a new 220 megawatt power plant that would replace the aging facility that the region still depends on. The entire construction project, which would include building a new dock, is likely to take three years and cost $750 million."

As in the Bahamas, there is much opposition to this proposal, despite the fact that the plants will pump hundreds of millions of dollars into the economy. However, we need to put things in perspective by accepting that everything has a price.

The plain fact is that all existing large-scale energy technologies (from nuclear to coal, oil and gas) present substantial safety hazards – both natural and man-made.

In the Bahamas, we currently get all our energy from imported oil. But there are some very serious and well-known environmental risks involved in the transportation, storage and use of petroleum products.

Several companies have drilled for oil in Bahamian waters over the past 30 years. Kerr McGee, of Texas, holds the latest licence issued in 2002. And oil exploration and production can affect the integrity of the coastal shelf and impact marine life.

That's because a significant percentage of the oil produced offshore spills into the sea. And a recent Saudi report estimated that a million barrels of oil and waste products are dumped or spilled into the Persian Gulf every year by shipping.

In addition to the routine deballasting of ships, transporting oil to world markets runs the risk of major tanker accidents. A single pint of oil can cover one acre of ocean surface, which is the habitat of plankton and crab larvae that are the bottom link in the marine food chain.

Oil storage and distribution is also dangerous – just ask the operation managers at Clifton. In 2001, lightning struck a storage facility near New Orleans causing the world's largest tank fire, which consumed 300,000 barrels of fuel. Two years earlier an oil pipeline exploded in Texas and burned wildly for days.

Although we have yet to experience a major explosion, fuel supply facilities in the Bahamas have have leaked significant quantities of toxic hydrocarbons into the environment, which brings us to the issue of ground water contamination.

Waste oil and spilled fuel are very hazardous to our health and safety. The water table under Nassau International Airport is said to be a sea of kerosene (leaked avgas). And BEC's diesel pipeline from Clifton to Blue Hills has ruptured at least once along Carmichael Road, spilling thousands of gallons into the water table and giving rise to landmark lawsuits.

Service station storage tanks have also leaked in the past – Texaco was forced to buy the property next to its Shirley Street & Retirement Road station because of a fuel leak years ago. The house remains uninhabitable today.

Then there is the question of disposal. The top 25 countries worldwide generate 5.5 billion gallons of used motor oil annually, and 47.5 billion gallons of disposable hydrocarbons. In Nassau, Bahamas Mack Truck collects about 4,000 gallons of used oil a week from auto dealers, repair shops and marinas. This is either incinerated (at cost) by special burners, or mixed with asphalt for road paving.

"We burn about 12 gallons of oil per hour, 24 hours a day, 365 days a year," said Bob Lynch of Bahamas Mack Truck. "And we've been doing that since March 2001. But unfortunately, there's no market for heat in the Bahamas."

More to the point is the way BEC disposes of its used oil. It is simply stored on the ground in rusting 55-gallon drums throughout the country – thousands of them on all the major islands. This has been the practice for decades, and it poses an environmental threat of immense proportions.

And the oil industry is not immune from terrorism or accidents. Two years ago, a French tanker was attacked in Yemen and set ablaze. In 1993, three ships collided in Tampa Bay, releasing huge amounts of fuel into the harbour. Just recently, a big tanker was shoved aground at Freeport by Hurricane Frances, blocking the container port.

Nuclear power plants also generate safety fears. There are over 400 reactors in 32 countries supplying 16 per cent of the world's electricity. Two major reactor accidents have occurred in the history of civil nuclear power – Three Mile Island in the US and Chernobyl in Russia. The first was contained and the other had no provision for containment. But public opposition has prevented the expansion of nuclear power in many countries, particularly the US.

Before oil and nuclear power, the world relied on coal for much of its energy. And the Financial Times recently reported that "to the horror of environmentalists, King Coal is back. The fuel already fires more than half the power stations in the US – and reliance on coal is increasing for the first time in decades."

Experts predict that coal's contribution to global energy use will double to 50 per cent by 2015 as big developing countries like Indian and China seek a supply of reliable, low-cost energy. And coal, too, presents massive environmental problems. Burning it releases huge quantities of carbon and sulphur, which pollute the air and contribute to catastrophic climate change.

The other fossil fuel that is in plentiful supply is clean-burning natural gas, which used to be disposed of as a nuisance by oil producers. By 2020 it is expected that world consumption of gas will exceed that of oil. The only problem is getting the gas to high-demand markets like the US, Japan and Europe.

That's why technology was developed to chill the gas to a liquid state for transport in special tankers. And, according to a recent report by the US Congressional Research Service, since international LNG commerce began in 1959, "tankers have carried over 33,000 LNG shipments without a serious accident at sea or in port."

This report added that, based on insurance records and industry sources, there have been 30 LNG tanker "incidents" – leaks, groundings or collisions. Of these, "12 involved small spills which caused some freezing damage but did not ignite. Two incidents caused small vapour vent fires which were quickly extinguished."

Land-based LNG facilities have also been relatively free of serious mishaps. Tokyo Bay receives an LNG ship nearly every 20 hours, and LNG terminals have so far withstood strong earthquakes. But to avoid "low probability, high consequence events", experts say LNG terminals should be located two to three miles from populated areas.

The recent Belgian natural gas pipeline explosion (which caused 10 deaths) is often cited by anti-LNG campaigners as a warning for us. But news reports put this tragedy in perspective – the explosion was Belgium's worst disaster since a 1996 highway pileup that killed 14 people. We doubt if anyone in the Bahamas will call for a ban on motor vehicles.

Safety record aside, there's no getting around the fact that LNG (like most fuel) is inherently dangerous. And when you factor in the terrorism concern that has arisen since 9/11, it makes perfect sense that every LNG tanker that enters Boston harbour has an armed Coast Guard escort and that communities are wary about accepting LNG facilities in their "back yard".

Meanwhile, experts warn that global oil production – the basis for the industrialized agricultural system that feeds most of the world's people – is about to peak and then decline, leading to soaring energy and food prices and the possible collapse of modern civilization.

And non-renewable energy sources (like solar) are still not sufficiently developed or economical to supply urban electricity grids, although there is plenty of room to improve conservation and efficiency.

It's a tough call all around.

The column 'Tough Call' by Larry Smith is published in The Tribune every Thursday and is reprinted here as a courtesy. Mr. Smith founded and successfully grew an advertising agency over 20 years. Under his direction Media Enterprises diversified into short-run commercial printing and publishing, and is now the largest non-fiction book wholesaler in the Bahamas. He has 30 years experience as a journalist and publicist and has contributed numerous articles and columns to the Bahamian press. A former reporter at the Nassau Guardian, local correspondent for Reuters and editor at the Bahamas News Bureau, he conceived and edited the Bahama Almanac (published 2000 by Media Enterprises), wrote the commentary for Mike Toogood's Portrait of an Archipelago (published 2004 by Macmillan Caribbean), and edited the Bahamas Environmental Handbook (published 2002 by the government). In 2003 he took a year's leave of absence from Media Enterprises to lead a transition management team at the Nassau Guardian after the paper was acquired by local investors. After leaving the Guardian he was contracted by the Tribune as online manager/editor and columnist. He has a degree in political science and journalism from the University of Miami. Mr. Smith can be contacted at: larry@tribunemedia.net

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