Energy Companies See Gulf Coast as LNG Gateway
Mississippi is on the verge of building two new terminals to import liquefied natural gas, which may create environmental hazards. In this 2006 article from Gulf Coast Reconstruction Watch, Tim Shorrock reports that Pascagoula residents who might otherwise protest are distracted by their own recovery needs.
Image: Rebuilding, Inc.
Tim Shorrock

A consortium of energy companies is hungrily waiting for federal approval for a pair of gas terminals in Mississippi that could make the Gulf Coast one of the nation's premiere routes for imported liquefied natural gas (LNG).

The two projects, planned by Chevron Corp. and Gulf LNG of Houston, could begin construction as early as November. After completion, they will provide about 100 jobs to the region.

That's a pittance compared to the labor-intensive casino industry, which is slated to bring thousands of jobs to the region over the next few years. But the trade-off, industry and government officials say, will be the transformation of the Gulf into a regional energy gateway for a nation desperate for alternative sources of fuel.

According to the Department of Energy, U.S. demand for LNG will rise from 3 percent of total supply in 2005 to 15 percent by 2025.

At a time of tightening energy supplies, LNG is widely seen as less harmful to the environment because it releases less carbon dioxide than coal or petroleum. It is produced by cooling natural gas extracted from fields in Qatar, Indonesia, West Africa and elsewhere to extremely cold temperatures, transforming it into liquid and dramatically reducing its volume. The liquid gas is carried on special tankers to its final destination, where it is unloaded, turned back into gas, sent through pipelines and burned to produce electricity.

According to the Department of Energy, U.S. demand for LNG will rise from 3 percent of total supply in 2005 to 15 percent by 2025. In fall of 2005, however, there were only five LNG terminals in operation in the lower 48, including one in the Gulf and another in Puerto Rico. In contrast, Japan, the world's leading LNG importer, has 28 operating terminals. The Bush administration wants to change that ratio: Since 2001, 15 new LNG projects have been approved by the business-friendly Federal Energy Regulation Commission (FERC), and at least 20 more are in the planning stages.

The largest concentration of LNG terminals will be along the Gulf Coast. The Chevron and Gulf LNG projects will be located in Pascagoula, Miss., home of the giant Northrop Grumman naval shipyard and one of the nation's largest oil refineries, also operated by Chevron.

These projects, if completed, will vastly increase shipping traffic along the crowded Mississippi Sound, adding some 300 giant tankers a year to the area's already busy maritime traffic. They will also eat up precious marsh space along the coast and disturb millions of tons of sediment, much of it toxic, which must be dredged to create channels for the giant tankers.

For a process so fraught with environmental risk, FERC and the Mississippi Department of Marine Resources have moved with remarkable speed to approve the new projects. Last May, FERC released a draft environmental impact statement concluding that building and operating the two LNG terminals "would have limited adverse environmental impact" as long as the companies adopted proper safety precautions.

A month later, FERC sponsored a meeting in Pascagoula to receive public comment on the two LNG projects. One of those testifying, environmental activist Paula Vassey, argued that the projects would negatively affect wetlands, fisheries and air emissions. "Jackson County, Mississippi, is being asked to eat the pollution so Chevron can make more money," she said.

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