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Safety Concerns Tie Up LNG Development

By CBS News chief investigative correspondent Armen Keteyian and producer Phil Hirschkorn

Fall River, Massachusetts, has long drawn its identity from the water. First it came from the textile trade, and lately it's because of opposition to one of the nation's first land-based liquefied natural gas, or LNG, terminals slated to be built in the coastal enclave of nearly 100,000 people.

Longtime mayor Ed Lambert, who left office on Friday, has led the opposition to an LNG terminal in the city's backyard. Nine thousand people live within one mile of the 73-acre industrial site along the Taunton River where Weaver's Cove Energy, a subsidiary of energy giant Hess, hopes to build the terminal.

"To put them in the middle of an urban neighborhood, simply to enhance the profit margin of the energy industry, is significantly wrong," Lambert told us when we surveyed the proposed plant site earlier this year. Houses begin a block away, many lying on dead end streets with no outlet in the direction away from the site.

"It truly is like needlessly painting a bulls-eye on a working class community," Lambert says.

The fear, in a post-9/11 world, stems from what might happen if an LNG tanker were attacked or even it suffered an accident, such as a collision at sea. According to a Government Accountability Office report issued earlier this year, all but one of 19 experts surveyed believe an LNG spill could "present hazards to the public."

The debate over LNG safety is increasing as clean-burning natural gas now accounts for almost 25 percent of all energy consumed in this country. In the past year, 95% of all new electricity generated in the U.S. came from natural gas, according to the Federal Energy Regulatory Commission, the agency which reviews all LNG proposals and green-lighted Weaver's Cove.

Hess Energy argues LNG would bring $3 million in taxes annually to Fall River while an increased LNG supply saves American consumers millions of dollars in lower energy bills.

"There's just a growing demand for natural gas, and North America can't meet that demand with its own production," says Mark Robinson, FERC's executive director.

That demand is fueling a shift from LNG facilities miles off the U.S. coast to more efficient and less costly land-based terminals, like Fall River's which are closer to tanker trucks, pipelines and people. LNG is imported in huge, double-hulled tankers arriving hundreds of times a year in U.S. ports. Before transport, the gas is chilled to -265 degrees Fahrenheit into a condensed liquid.

The hypothetical worst-case scenario begins if an LNG tanker were breached, and the super-cool liquid escapes, quickly turning into vapor as it spills on the water. A potentially flammable cloud could form and ignite. The radiated heat could burn skin on those outside up to a mile away, according to scientific studies, including one by Sandia National Laboratories in New Mexico.

In addition, according the scenario depicted by some scientists, if the vapor cloud drifted over a populated area and ignited, it could burn people and property nearby.

"There has never been a single cargo lost anywhere in the world of an LNG tanker," says Robinson, who has overseen the approval of 19 new LNG plants in the past five years, from Texas and Louisiana to Georgia and Mississippi to New Jersey and Massachusetts. Nine new plans are before FERC that would bring LNG facilities for the first time to California, Oregon, Maine and New York.

"Flammable, vaporous clouds passing over cities is something that when we look at the facts, we don't see how that can even occur on a deliberate event," Robinson says.

"That vision - it's somewhere between improbable and impossible," Robinson says. "It's not that everyone within that one mile would be subject to some type a catastrophic event. If you have clothing on, you're protected. If you move behind a tree, you're protected. If you're in a wooden structure, you're protected. So it's not like you might think."

LNG supporters point out that in 40 years, no double-hulled LNG tanker has suffered a leak or spill, that it is no more dangerous than gasoline or a gasoline fire, and that other targets that would be much more accessible than a Coast Guard-guarded ship.

Lambert says, "They dismiss it by suggesting that the likelihood that anything like that could ever happen would be minimal. My response to that is that I don't know that they ever could have predicted that terrorists would hijack planes and take down the World Trade Center."

LNG would be carried to Fall River in 85-foot wide, 750-foot long tankers - two-and-half football fields long and bigger than some World War II battleships. The journey along the Taunton River would take four hours cruising 21 miles of shoreline. In the last mile, the tankers would pass under four bridges, the last only 98 feet wide.

"It's a little bit tight, and there's no room for error," says Captain Roy Nash, who oversaw the Coast Guard review of the Weaver's Cove project.

"We are making sure we look at every possible safety and security concern and making sure if it's to be done it can be done every time," Nash told us on a ride along the river. "Every single time, and if it can't be, then it won't go forward."

Security experts, such as Paul Kurtz, Chief Operating Officer of Good Harbor Consulting, worry that even with a Coast Guard escort LNG ships could be vulnerable to a seaborne attack, the way an explosives-laden al Qaeda raft fatally bombed the U.S.S. Cole in Yemen in 2000, killing 17 sailors.

"When a tanker pulls into port and it's at rest, and it begins off-loading its fuel, it really does become more of a sitting duck," says Kurtz, also a CBS News consultant.

He says LNG tankers could also be rammed by another ship or punctured by a shoulder-fired missile fired by someone standing on shore.

"It doesn't seem prudent to me at all to allow this facility to go forward. The right thing to do is to take a step back, to look for another area to establish an LNG tanker facility," Kurtz says.

The Coast Guard apparently agrees. In a letter to Weaver's Cove this Wednesday, Nash wrote that the narrow waterway along Fall River is "unsuitable" for LNG tanker traffic.

"The captain's decision lacks the necessary factual support, and we intend to appeal," Weaver's Cover said in a statement to CBS News. "The decision disregards critical facts in the record and introduces both new data and new concerns on which Weaver's Cove Energy was not provided an opportunity to comment."

Although the battle over Fall River continues, its outgoing mayor says, "We really do think for all practical purposes the project is dead. The Coast Guard decision, from our perspective, appears bulletproof."

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