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.

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.

The state marine resources office held its own hearing on the dredging and wetlands issues affecting the Gulf LNG project in late June. John McCutchen, chief operating officer for what the company calls the "Gulf LNG Clean Energy Project," provided details of the planned terminal. It will include a 62-acre dredged berth area to accommodate tankers. The liquid gas will be off-loaded into 260,000-cubic-meter LNG storage tanks and go through a series of pumps and vaporizers to change the LNG back to gas. The gas will then be fed into three interstate pipelines for delivery to Florida and other inland markets.

Like the FERC event, the marine resources hearing was sparsely attended. The government's zeal to push these projects forward while the region is still recovering has frustrated groups opposed to the LNG projects, who say local citizens are too absorbed with their own survival to attend hearings. "They don't have time to be citizen activists the way they used to, and keep an eye on everything that's going on," complained Becky Gillette, the co-chair of the Mississippi Chapter of the Sierra Club.

In testimony before the marine board, Gillette discussed the potential danger to the public of catastrophic fires from marine accidents or terrorist actions targeting LNG vessels. "I think it would be wrong to expect Pascagoula to take two of these LNG ports on when there's no other communities in the country that have a large population that is based next to one of these LNG plants," she said. "This is simply not a risk that people elsewhere are willing to accept." Six of the eight witnesses at the hearing opposed the projects, including activist Vessey, who asked the state commissioners to delay any decision on dredging to conduct further soil testing at the proposed LNG site.

On July 9, the state's marine resources office gave Gulf LNG the green light to start dredging more than 60 acres of the Bayou Casotte Ship Channel and fill in more than 15 acres near the site of its planned facility.

"Soon we hope to receive a final environmental impact statement by FERC, followed by permits to construct and operate the facility," Gulf LNG spokesman Scott Wagner told GCRW. There are "no significant environmental issues" that need to be addressed, he said.

Gulf LNG is partly owned by Sonangol, the Angolan state-owned energy company that will supply 100 percent of the natural gas the company will import through the terminal. Sonangol's LNG fields are being developed by a consortium of companies that include Chevron, British Petroleum, TOTAL and Exxon Mobil.

The Houston investors behind the terminal are not well-known, and hope to stay that way. Asked about the primary owners of Gulf LNG, Wagner described them as a "small group of investors." But he would not identify them by name, saying "they like to remain low-key." In fact, the project is headed by McCutchen, Dee Osborne and Joseph Peacock.

All three men used to work for Crest Investment Corp., a company owned by Jamal Daniel, a Syrian-American businessman based in Houston. Daniel has close ties to the Bush family and is an adviser to New Bridge Strategies, a Washington lobbying firm once associated with Mississippi Gov. Haley Barbour. Daniel was recently identified as the single largest donor to Barbour's 2005 election committee in Mississippi.

So it was hardly surprising to read, in a press release distributed by Gulf LNG last year, that the governor had endorsed the LNG projects in Pascagoula. The Chevron and Gulf LNG terminals, Barbour said, will "address a growing demand for energy in the U.S. and would position Mississippi as a leader in the supply of clean and reliable energy to the region."

Originally appeared in 2006 on the Gulf Coast Reconstruction Watch website. Copyright © 2006 by Tim Shorrock. Reprinted with permission.