The boom in natural gas supply, infrastructure, and uses is changing the energy landscape and presenting safety considerations for enforcers, regulators, and first responders
BY JESSE ROMAN
THE SABINE PASS LIQUEFIED NATURAL GAS (LNG) export terminal, a dizzying maze of pipes, cranes, and tanks, rises dramatically from 1,000 acres of Louisiana bayou, a short distance upriver from the Gulf of Mexico. One of the largest industrial facilities constructed in North America this decade, its owner, Houston-based Cheniere Energy, has expectations for its gleaming new terminal that match the $20 billion price tag. With domestic natural gas production booming and a recent shift in U.S. policy to allow gas exports, Cheniere and a host of other energy companies are lining up for the opportunity to sell American LNG to energy-hungry markets in Europe and Asia. On February 24, when the facility loaded its first tanker, Sabine Pass became the first operational LNG export terminal in the U.S. lower 48, and the first facility to ship gas extracted from the country’s gas-rich shale fields.
The fact that Sabine Pass exists represents a dramatic turnaround in the gas industry. Once thought to be past its peak, and even in decline, U.S. gas production is soaring to all-time highs thanks in large part to innovative extraction techniques, including hydraulic fracturing and horizontal drilling. The “shale revolution,” as this transformation has come to be known, is driving huge increases in gas demand and, in turn, billions of dollars in infrastructure investment in the U.S. and around the world.
Sabine Pass may be the grandest example yet of the boom, but it is hardly alone. Five other large LNG export terminals have already won approval from the Federal Energy Regulatory Commission (FERC), with four now under construction and an additional 22 terminals seeking permits to build. Aside from export, FERC lists more than 100 additional large-scale LNG facilities, performing a variety of functions, that are now in operation in the U.S. with more coming online all the time. Projects include storage facilities to supply LNG to large consumers such as the proliferation of gas-fueled power plants; a plethora of new refueling stations to service a growing fleet of natural gas–powered trucks, trains, ships, and industrial vehicles; thousands of miles of proposed pipeline projects; as well as LNG liquefaction and gasification plants.
The new $20 billion Sabine Pass terminal in Louisiana signals the United States' emerging status as a net exporter of natural gas. Photograph: Cheniere Energy Corp.
The boom impacts enforcers, who must make sure these new LNG facilities—where billions of cubic feet of flammable and potentially explosive gas is liquefied, gasified, transported, and stored—run safely. It impacts engineers and regulators, who must ensure that facilities are properly designed and sited to prevent mass casualties in case of an incident. And it has big implications for first responders, who need to be educated and trained to plan and respond as more vehicles, tanker trucks, fuel stations, and large LNG storage facilities move into their jurisdictions.
NFPA has been proactive in addressing this expansion; numerous NFPA codes and standards apply to these projects. The most-used code, NFPA 59A, Production, Storage, and Handling of Liquefied Natural Gas, informs the construction, siting, security, storage, and operations at most of the nation’s burgeoning LNG facilities. The code has never attracted more interest than it’s getting now, said Jay Jablonski, the chair of the technical committee and a principal at HSB PLC insurance, which insures several large LNG facilities. “Now that there’s all of this activity happening with LNG all over the world, we’re seeing much more input from interested parties,” he said. “A decade ago, natural gas was really a stagnant industry—there was little construction [of new facilities], and the focus was on keeping existing plants running. Back then, we might not get a single public comment on this code.”
‘This is not where it belongs’
Code at a Glance
NFPA 59A, Production, Storage, and Handling of Liquefied Natural Gas
NFPA’s primary code for all liquefied natural gas (LNG) facilities is comprehensive. The code establishes the essential requirements for all facilities that handle, store, and produce LNG. Among other things, the code provides requirements for:
» Facility siting and layout
» Facility design and construction
» Facility inspection and maintenance
» Facility fire protection and security
» Facility instrumentation, controls,
» Facility systems for transferring LNG
» Training of personnel involved with LNG
» Design, construction, inspection, and installation of vaporization operations, storage tanks, and piping systems and components
The renewed interest in LNG and subsequent building boom boils down to simple economics. The sustained spike in gas supply has caused the U.S. commercial price to fall roughly 50 percent, from a high of $15.64 per thousand cubic feet in July 2008 to $7.38 in November 2015, according to the U.S. Energy Information Administration (EIA). When supplies rise and prices fall, demand typically explodes. Predictably, U.S. gas consumption is now at all-time highs, with annual record amounts of natural gas consumed every year since 2007. With prices so low, businesses are devising more and more ways to use gas, invest in it, and improve their bottom lines. As a result, LNG is popping up in places it never has before, in quantities once thought unimaginable.
Acushnet, Massachusetts, a tree-lined town of 10,000 people just north of Buzzards Bay and Cape Cod, is one of those unlikely spots that recently found itself on the forefront of the shale revolution. Well-kept single-family houses line the town’s sleepy Main Street, along with a pizza joint, a fried seafood restaurant, a post office, and little else. “This is old New England here, a working-class town,” Fire Chief Kevin Gallagher said. “There aren’t many residents in this community playing the stock market. Their investments are in their homes.”
Acushnet was jolted awake last summer when Eversource, a local energy utility, announced plans to build two enormous LNG tanks on 250 acres it owns, a mile and a half from the town’s elementary school. Each of the proposed tanks would be 17 stories high and nearly a football field in diameter; together they would hold 6.8 billion cubic feet of liquefied natural gas—enough to meet the needs of about 60 million average U.S. homes for a year.
Storing that much flammable and potentially explosive fuel in their backyards has given many residents pause. They worry that the project will make the town a terrorism target and cause property values to plummet. “Twenty-five percent of New England’s LNG is going to be in Acushnet, in a residential community surrounded by homes, surrounded by hospitals, surrounded by schools,” resident Roger Cabral, the leader of a local opposition group, recently told a radio station. “It’s the wrong spot for this project. Maybe it needs to be somewhere—this is not where it belongs.”
If the permits to build are approved, natural gas will begin arriving at the Acushnet facility sometime in 2018, transported from Pennsylvania’s prolific shale fields via a vast network of underground pipes. From there the gas will enter the facility’s liquefaction cooling system, which will gradually chill it to –260 degrees F, condensing it into a liquid 1/600th the volume of the gas. Like shrinking a beach ball to the volume of a ping pong ball, reducing natural gas to its liquid state, LNG, provides much greater storage capacity and is the preferred method for transport over land and sea.
The Acushnet project is indicative of the gas infrastructure boom taking place across the nation to feed a growing gas demand. In Eversource’s case, the demand comes from new natural gas–fed power plants. “The fact is there are more customers coming online for electricity and for natural gas and using more of both, but the system to get that gas into New England in the amounts that are needed is lagging,” said Mike Durand, a spokesman for Eversource. “As a result, the price stability of electricity in the region is suffering. One of the big reasons for this [Acushnet] project is to help our electricity customers see more stable and lower-priced electricity costs.”
A rendering of a facility proposed in Acushnet, Massachusetts, that would store 6.8 billion cubic feet of LNG. Photograph: Eversource.
Nationwide, pressure to reduce emissions and cut costs is leading to the retirement of older coal and nuclear power plants, many of which are being replaced with cheaper and cleaner natural gas–burning plants. ICF, a market analysis firm, has predicted that roughly 40 gigawatts, or 12 percent of the current coal-fired installed capacity in the U.S., will be retired by 2020. In New England alone, planned coal and nuclear power plant retirements totaling 4,200 megawatts (MW) of generation—enough to power approximately 4.2 million homes each year—will be taken offline by 2019. ISO New England, a nonprofit that manages the region’s power supply, has identified an additional 5,000 MW of generation that could retire by 2020. If new and existing gas-powered plants are to carry the load, the region needs a more reliable supply of gas, according to Eversource.
The lack of sufficient gas supply has caused electricity prices in the region to nearly double at times in recent years. The supply crunch is especially acute on cold winter days when consumer heating quickly eats up natural gas supplies and forces plants to seek other types of fuel at higher costs—which is where extra LNG storage capacity in facilities like the one proposed for Acushnet would help, Durand said. Concurrent with the storage project, the energy companies Eversource, Spectra Energy, and National Grid are jointly proposing an accompanying update and expansion of the region’s pipeline network to efficiently deliver the gas to the plants. Together, the pipeline and storage projects would save customers $1 billion in electricity costs per year through rate decreases, according to Eversource.
Chief Gallagher is reserving judgment on the proposed Acushnet project for now, but he admits it is daunting for his small department of five full-time firefighters and 30 on-call members. “Since July there hasn’t been a day where I haven’t thought about this project and what the implications will be for the town and surrounding communities, and what it will mean for this department,” he said. “My focus is on trying to put together a well-balanced plan to meet any potential issues—not knowing what those issues may be adds a level of anxiety.”
For now, he said, his department is looking at similar operations in other communities, evaluating their response plans, staffing levels, apparatus inventory, call volumes, incident history, and other variables—anything, he said, “to get a sense of the resource needs that may await us.”
‘A new world coming’
When the NFPA 59A technical committee met in Houston last May to consider final provisions for the upcoming document, Guy Colonna, NFPA’s division manager for Industrial and Chemical Engineering, had places like Acushnet and the worries of fire chiefs like Gallagher on his mind. “I asked the committee, ‘Are we sure there isn’t something about this document that we overlooked?’” Colonna said. “‘Are we sure there aren’t any gaps? There is a whole new world coming and we really need to hit everything.’”
The universal answer around the room: The code is solid.
The 2016 edition of NFPA 59A debuted in December with minimal changes. It added language allowing the use of a new LNG tank membrane technology, and a new chapter with guidance on developing a performance-based risk analysis for siting LNG facilities. “Having all of these new facilities being planned and built was a big impetus for this addition, but I think it’s also part of a push in standards in general right now to include this type of risk-based analysis,” Jablonski, the NFPA 59A committee chair, said of the new chapter. “We thought it ensures a better level of consistency.”
The fact that there were so few changes to the body of the code, in spite of the level of activity in the industry, speaks to the code’s maturity and how much is already known about LNG, Jablonski said. “In general it is a very well-run industry that strictly follows appropriate design standards wherever they be,” he said. “In fact, I think LNG terminals are less dangerous than a typical crude oil refinery. Refining crude is an incredibly complex process; a lot has to go on to take crude and turn it into all of the various products. With natural gas, it’s just about cooling it into a liquid and heating it up into a gas.”
The comparatively low cost, low emissions, and high energy output of natural gas remain attractive to companies that use large quantities of fuel for transportation. Photograph: Clean Energy Fuels Corp.
Colonna agreed, saying that the processes these facilities use have been understood for years. “Now, though, it is being done on a much grander scale,” he said.
In Acushnet, unbeknownst to many residents until recently, Eversource has owned and operated a pair of much smaller LNG storage tanks on its property for 44 years. Fuel trucks visit the tanks about 300 times a year to unload liquid or load gas for delivery to local customers; according to Gallagher, there have been no recorded safety incidents at the facility. The proposed facility, which will include liquefaction operations and tanks about 10 times larger than the existing tanks, will also be subject to NFPA 59A.
While there has been some unease with the public regarding LNG projects, the natural gas industry doesn’t seem worried by the proliferation of gas facilities, Colonna said. “This has never seemed to be a significant advisory service concern here at NFPA, from the designer, installer, or enforcer standpoint,” he said. “The majority of calls we get are generally from designers and enforcers who want to make sure they have researched everything and have all information they need to make good decisions.”
At the moment, Colonna does not anticipate a need for new LNG codes or standards, or major additions or rewrites, unless there are innovations in the processes for handling, liquefying, or gasifying LNG. New LNG knowledge acquired through future research could also lead to possible revisions.
Periodically, an incident serves as a reminder that LNG is capable of causing death and destruction. A recent notable example occurred in 2004 when an explosion flattened a large portion of the Skikda LNG liquefaction and export terminal in Algeria. The blast killed 27 people, the deadliest event in the industry in more than three decades. A report from the plant owner later concluded that a large amount of LNG leaked from a pipe at the facility, creating a vapor cloud that exploded when it came into contact with a flame source, thought to be a nearby boiler [see “Cloud Hazard,” page 54]. The gas leak was not detected.
In 2014, gas processing equipment at an LNG storage facility in Washington State exploded, sending debris flying as far as 300 yards. Shrapnel injured four employees, and a fifth was hospitalized with burns. According to a report, 600,000 gallons of LNG leaked from a damaged tank following the blast, sending a vapor cloud drifting toward a nearby town. The facility and all residents within a two-mile radius were evacuated, but there were no subsequent explosions.
Transportation: By land and by sea
A growing natural gas sector where NFPA is actively trying to stay ahead of the curve is transportation, from rail and long-haul trucks to municipal buses to cargo ships. Even as the price of diesel—traditionally, one of the fuels of choice for transporting goods around the world—continues to plunge, the comparatively low cost, low emissions, and high energy output of natural gas remain attractive to companies that use large quantities of fuel. Consider this: as of February, 1 million Btu worth of energy from natural gas cost $2.13, while an equivalent amount of diesel energy, about seven gallons, cost $14 at the pump, according to industry sources. Natural gas prices are also generally more stable than oil, allowing fleet managers to better predict future costs.
Read Supply Side
Suddenly, the United States has natural gas to spare. How did that happen?
All those factors have led cities such as Boston, Los Angeles, and New York City to switch over their municipal bus fleets to run on natural gas. Most United Parcel Service trucks run on natural gas, as well. It is estimated that up to 70 percent of all new waste-management vehicles run on natural gas, and recent advancements in engines have led to significantly more natural gas–powered heavy-
duty trucks, freight trains, and maritime vessels. There are now an estimated 20 million natural gas–powered road vehicles worldwide, and to service these growing fleets, there are nearly 1,000 LNG and compressed natural gas (CNG) refueling stations across the U.S., and the number continues to grow, according to the U.S. Department of Energy. LNG is now part of NFPA’s Alternative Fuel Vehicles Safety Training Program for first responders.
NFPA 52, Vehicular Gaseous Fuel Systems, which debuted in 1984, addresses LNG-powered engines, as well as the safety of LNG/CNG refueling stations. The 2016 edition of NFPA 52, which is in the final draft stages, has been restructured and reorganized to make it easier to follow. The document also includes new and updated guidance on facility modification, a growing trend as companies decide to add LNG and CNG refueling to their existing facilities, said Denis Ding, an NFPA 52 technical committee member and an executive at California-based Clean Energy Fuels, which operates about 550 natural gas refueling stations across the country.
Ding said that LNG/CNG stations have many similar safety and prevention features as traditional diesel stations, such as separation from ignition sources and emergency automatic fuel shut offs. But there are also many differences, he said. Traditional fuel stations have leak detection at ground level, for example, while LNG/CNG stations are required to have detection above because the gas rises. Also, diesel stations focus on containment if there is a spill on the ground. Natural gas stations, however, are designed to prevent the gas from pooling and collecting and ban any overhead structures that could trap the gas and prevent it from dissipating into the atmosphere. There are also different provisions for the devices that pump the gas.
“The nozzle is a little different—it has some interlocking mechanisms that secure onto the vehicle,” Ding said. “It does require some minimal user training, so customers understand how to operate the equipment.”
Despite the rapid growth of land-based natural gas–powered vehicles, some observers believe the maritime industry could actually achieve the greatest LNG market penetration. While LNG is cheaper than the heavy fuel oil used by most ships, tight international emissions standards are also a big impetus for the maritime industry to switch to gas. As of January 2015, there were 134 LNG-fuelled ships in operation or on order, according to the International Gas Union. The consulting firm DNV GL predicts that, by 2020, 1,000 new ships with natural gas–powered engines will be delivered, and an additional 600 to 700 ships could be retrofitted to run on LNG.
Operators from across the maritime industry are looking at LNG as a potential fuel, according to Larry Russell, a senior chemical and marine specialist at NFPA. “It runs the gamut—ferries, tug boats, oil field supply boats, barges, oil tank ships, and container ships,” he said. “In the last three years or so LNG as a marine fuel has taken off.”
Russell also serves on the Coast Guard’s Chemical Transportation Advisory Committee, which for the last three years has studied LNG as a marine fuel in preparation to make recommendations to the Coast Guard as it fine tunes its regulations surrounding LNG. The Coast Guard is the primary enforcer on maritime standards in the U.S., and references several NFPA codes.
NFPA 306, Control of Gas Hazards on Vessels, is in the midst of changes related to the recent emergence of LNG. Chapter 9 addresses ships that carry flammable cryogenic liquids, including LNG, but it looks at LNG only as cargo, not as a fuel. NFPA 312, Fire Protection of Vessels During Construction, Conversion, Repair, and Lay-Up, could also be impacted by the emergence of LNG, Russell said. The Committee on Gas Hazards has already received a few public inputs on the issue, Russell said. The closing date for public input on NFPA 306 is in June, after which the committee will meet to complete a first revision.
Perhaps the most significant issue that the Coast Guard must address is ship design, Russell said. Put simply, areas aboard vessels are currently designated as either hazardous or nonhazardous, and they remain separate. The hazardous areas on tank vessels are typically where cargo (bulk petroleum products, chemicals, and gases) is stored, and the nonhazardous areas are where the crew sleeps and works, such as the engine room. However, now that flammable gas is becoming the fuel, these distinct separations are not so clear; putting LNG in fuel tanks, in close proximity to crew living and work spaces, presents challenges, Russell said. “If you have a leak in a diesel fuel system, you end up with a messy spill in the engine room. If you break an LNG fuel system, you could have flammable gas in the engine room, which is a lot more dangerous from an explosion standpoint,” he said. “There’s a much higher risk of something bad happening.”
So far, though, an awareness of the potential hazards, coupled with proactive prevention efforts and strict adherence to codes and regulations, has resulted in a mostly sound safety record for the LNG industry as a whole, according to NFPA’s Colonna. “It’s easy to get people concerned about LNG because, without a doubt, if a significant amount of the product is released and it finds a way to ignite, it’s going to create a big problem,” he said. “I’m not saying LNG doesn’t pose a danger, but from a risk standpoint, the likelihood of something happening, based on the history, is really low. LNG facilities are sited with a lot of scrutiny, and part of that scrutiny comes out of our standard, which is why we are very active in trying to refine that process.”
Gallagher, the Acushnet fire chief, recently requested to be on the NFPA 59A technical committee, a role he hopes to take on in the near future. “I did that because it’s more than just a standard for us,” he said. “LNG is a process we’re living every day.”