Forgotten Nikiski LNG targeted West Coast

1970s proposal, a project of California utilities, had full environmental review under the new National Environmental Policy Act

Bill White

Researcher/writer for the Office of the Federal Coordinator

The Coast Guard’s anxiety

Among agencies, only the Coast Guard seemed to get its pulse rate racing over the Western LNG project. But only for a while before it, too, signed off.

In October 1975, the Federal Power Commission staff wrote to the Coast Guard asking questions about the safety hazards of ice, tides and currents at the Nikiski port and the wisdom of putting a second LNG terminal there.

On Nov. 14, 1975, the blunt response came from Rear Adm. J.B. Hayes, commander of the 17th Coast Guard District, which patrols the vast Alaska coast.

“The addition of any other LNG facility in this location will substantially increase the risk to life, property and the environment.” Hayes wrote. “Nikiski is quite frankly, a poor choice. I strongly recommend that cognizant officials of your agency visit Nikiski during winter conditions before any decision is made in this matter.”

Here’s the deal, Hayes wrote. Incoming tides — called flood tides — typically sweep up the east side of Cook Inlet. That’s where the three existing docks are, for the fertilizer plant, ConocoPhillips LNG plant and oil refinery, in that order from south to north. A strong flood tide can flow at up to 7 knots. When pushed by brisk southwest winds, the flow can near 11 knots. In the presence of winter ice cakes — some a half-mile wide moving at or near surface-current velocities — and when two or more ships are docked, the potential for trouble is high.

“The ultimate danger is that of a large cake of ice or a buildup of smaller cakes and brash striking a moored vessel and causing it to break away from its mooring,” Hayes wrote. “The primary hazard is the inability of the vessels torn away from their loading berth or executing emergency break away procedures, to maneuver in heavy ice so as to prevent collision with other pier facilities or vessels in the area.”

Putting another dock at the southern end of this line of dominos seems unwise, Hayes suggested.

To support his point, the admiral attached a letter from the LNG tanker Polar Alaska’s captain concerning an incident 10 months earlier, on Jan. 8, 1975.

An oil tanker, docked north of his LNG ship, broke loose and started drifting toward the LNG pier, the captain wrote in the letter to his boss. At that moment, the Polar Alaska was loading LNG. They swiftly shut off the LNG flow. “The entire crew of the SS ‘Polar Alaska’ was immediately alerted for an emergency cast off.” Before the ship could leave, though, the runaway oil tanker gained engine and steering controls. It skirted “dangerously close” past the LNG ship without hitting it. Especially in winter, “there is a constant danger when two or more ships are moored at Nikiski Pier and I beg you to take all the steps to avoid a situation which jeopardize the ships and their crews,” the LNG tanker captain wrote.

Hayes also attached a series of log reports of ice problems Nikiski ships endured in the frigid winter of 1971.

The Western LNG sponsors got busy.

They developed emergency-response plans. They got all Nikiski port users to agree to port protocols when ice danger is high, including closing the port if necessary. Then they invited Coast Guard officials for a show-and-tell of the new safety culture.

The Coast Guard was mollified.

“Since November 1975 a number of significant changes have taken place,” Hayes wrote to the power commission on March 9, 1977. “These include formation of the Nikiski Operators’ Safety Committee, the adoption of voluntary operating procedures by the Committee, the upgrading of existing facilities at the port complex, and further studies by Pacific Alaska Company regarding currents and ship breakaways. As a result of these steps, and under existing Coast Guard regulatory authority, I am now convinced that present and future Nikiski operations can be conducted safely, though perhaps under conditions of considerable economic burden to the operators.”

Unchanging tides

In the frigid predawn of Feb. 2, 2006, a surging tide and ice floes pressed against the docked tanker Seabulk Pride as it loaded fuel oil and gasoline from the Tesoro oil refinery. Mooring lines snapped along its hull until the ship drifted away. The tanker finally beached a half-mile north of the dock.

The Coast Guard investigation concluded the port’s severe-ice rules were adequate, the ship’s crew just didn’t follow them. The vessel and its engine room were inadequately manned. The crew members weren’t trained for dealing with heavy ice. They didn’t know how to moor a ship for the strain it would endure.

A 2007 study of ways to make the Nikiski port safer in light of the Seabulk Pride accident concluded that in many ways the docks there are models of proper design. The authors found it interesting that mooring-line failures have occurred at the refinery and fertilizer dock but not the LNG dock between them.

“It may be that ConocoPhillips, because they employ only two identical ships whose crew have extensive experience in Cook Inlet and working with the facility dock force, have substantially reduced the risk from the ‘human element,’” the report said.

The report noted the absence of tugs to back up tankers at Nikiski, an unusual omission among northern-latitude ports worldwide studied. Four months later, the Tesoro refinery announced it would deploy a tractor tug year-round to help tankers arriving and leaving its dock.

Alternatives to Nikiski

Other Cook Inlet sites had inferior geologic, climatic or oceanographic qualities, or had technical problems, the study concluded. The alternate getting closest scrutiny was Cape Starichkof, farther south Cook Inlet’s east bank, near the town of Anchor Point. Fewer ice problems there, the study found. But a plant there would be more conspicuous than in industrial Nikiski, and it would be more likely to clash with the local salmon industry.

Expanding the ConocoPhillips plant sounded good on paper. But the plant would have to be redesigned and updated, requiring it to be shut down for a time, interrupting its ongoing contract to deliver LNG to Tokyo utilities. Besides, the plant owners might be unwilling.

Cook Inlet gas instead could be piped north to Fairbanks or northeast to Tok, where it could feed into the big proposed Alaskan Northwest gas pipeline project from Prudhoe Bay to the Lower 48. Each idea had its problems, particularly landsliding and faulting on the route to Tok, where the environmental impact would be greater.

Always an option is to do nothing, to build no project. “Inasmuch as there is a need for natural gas, this alternative would appear to be unacceptable,” the study said.

Impact statements then, and today, also discuss what unavoidable environmental changes would occur if a project gets built.

For Western LNG, most were pretty obvious:

The pipeline corridors would be stripped of trees. The LNG plant site would have buildings and paving where none existed before; surface water would run off differently. Land would not revegetate naturally. Some of the nearby bluff would be excavated for an access road to deliver plant modules. The plant would solidify the neighborhood as an industrial center and further discourage nearby land use for recreation and homes. More ships at Nikiski “would largely preclude boating activities in the tanker mooring area” and “would interfere with set net fishermen who have previously utilized the immediate area.”

For the project, the FERC staff recommended Pacific Alaska take 24 actions to mitigate environmental impacts.

Some involved pipeline routing. Some concerned safety designs, emergency plans and timing of report filings. Several specified how to avoid damaging streams or disturbing nesting birds during construction — such as via winter construction. For fuel, the tankers should burn LNG that has revaporized — called boil-off gas — when docked or approaching Nikiski rather than more polluting bunker-C oil, the impact statement said.

What’s different today

In January 2014, Steve Butt, senior project manager for Alaska LNG, told an Alaska business group he’s confident tankers calling at the liquefaction plant will handle the Inlet’s worst. His team has been consulting with ship pilots who deal with the world’s most treacherous tides and currents, and it has planted a buoy in the Inlet to harvest contemporary data on ebbs and flows there.

The tankers calling at Nikiski for Alaska LNG will be larger and more powerful that the 1970s-era tankers. But they shouldn’t draw much more of a draft.

The Western LNG EIS said the shipping channel then would need a minimum depth of 42 feet — 47 to 57 feet where the wave action is lively. The tankers Western LNG was looking to build would have sailed with perhaps a 35-foot draft when loaded. Although larger, the Alaska LNG tankers likely would have drafts of less than 40 feet, based on what’s getting built today. A small increase in draft can allow a lot more breadth and capacity in the ships. The world’s largest LNG tankers — the Q-Max ships sailing out of Qatar and far larger than what Alaska LNG proposes — have about a 40-foot draft.

Much also has changed in how government agencies scrutinize large development projects.

More now is known about the soils, wetlands, water quality and water bodies, vegetation, air, wildlife, geologic hazards, archeological sites, other land uses and other environmental facets of the Cook Inlet region. That is because over the years more information has been collected about them — all for studies of other projects.

And the people preparing the studies have gotten more sophisticated at understanding these topics in all their subtleties and nuances.

If a generalization can be made about environmental impact statements over time, it’s that each new one raises the bar a little bit for all those that follow.

In contrast to the 334-page Western LNG environmental impact statement, the 2007 EIS for the proposed Knik Arm bridge ran more than 1,000 pages, not counting thousands more in appendices and technical reports attached to it.

The Western LNG environmental impact statement makes only the briefest citation of the Marine Mammal Protection Act — in fact just a single mention. And it never mentions the Endangered Species Act. Both will play into permitting of the Alaska LNG project.

Cook Inlet hosts at least two endangered species, beluga whales listed in 2008, and western Steller sea lions listed in 1997. (The sea lions have only a scant presence in the upper Inlet.) Under these laws, the Alaska LNG project likely would need a “biological opinion” — a study by federal agencies — that would consider whether the project would further jeopardize the belugas and sea lions or the whales’ critical habitat in the Inlet. Under the Marine Mammal Act, the project would need a permit allowing an accidental harming or harassing of the mammals.

Biological opinions examining whether the endangered species will be OK are big deals.

When Apache Alaska Corp. wanted to conduct 3-D seismic surveys of its Cook Inlet oil and gas leases in 2013, the National Marine Fisheries Service and U.S. Army Corps of Engineers tackled the subject.

The 137-page joint opinion was almost one-third as long as the entire Western LNG EIS circa 1978.

These studies and others would consider the cumulative impacts of the LNG project with other oil and gas development, fishing, tourism and various commercial activities in Cook Inlet. This collective look at how one project interacts with others on the Inlet’s environment didn’t really happen back in the 1970s.

Government reviews today also take a sharper look at how development affects Native communities and their cultures, and on minorities and low-income populations. FERC now formally consults with nearby Native communities on a government-to-government basis to gain their input on projects. That didn’t happen in 1978.

Climate-change analyses and spill-response capabilities also are looming larger in environmental analyses.

And air-quality standards are stricter today ... plus they continue to evolve.

As one agency official involved in Alaska environmental studies put it: Compared to the 1970s, there’s more data in the baseline, more baseline monitoring and more information to regurgitate in an environmental impact statement.

Western LNG fades away

With gas-industry price deregulation, drillers found and produced more low-cost natural gas. North America didn’t need expensive Alaska gas.

Eventually, by the early 1980s, both projects’ sponsors just stopped filing their paperwork with the regulators. (The lower one-third of the North Slope gas pipeline — from Alberta to the Lower 48 — actually was built and has been flowing Western Canada gas for 30 years.)

Even before markets killed it, the Western LNG project almost ran aground on a soap opera of local and state politics in California, where the gas would have been received and used.

Originally, three LNG receiving sites were proposed, including Point Conception northwest of Santa Barbara. The California Coastal Commission had siting authority for LNG receiving terminals. But the panel’s mission also included protecting the marine life, spectacular views and other assets of Point Conception. Getting site approval for there would be no walk on the beach.

The other two proposed sites were to the south, in Oxnard and Los Angeles, where a lot more people lived. While some local leaders wanted the jobs and cited the industry’s low safety risk, others noted the area’s earthquake hazards and the thousands who could die in a worst-case disaster scenario.

To avert a stalemate and force a decision, the California Legislature in 1977 mandated a study to rank the best sites for LNG receiving terminals. Of 82 sites evaluated, Point Conception was one of only four that met all environmental criteria. Eventually, both the state and FERC sanctioned the site.

But by the time court appeals had been exhausted, “increasing domestic natural gas supplies had rendered the project uneconomic,” as the California Energy Commission later put it.

Plans for the Western LNG project got stacked away on library shelves.

Part 1 of this story appeared in the March 9 issue. Editor’s note: This is a reprint from the Office of the Federal Coordinator, Alaska Natural Gas Transportation Projects, online at www.arcticgas.gov/forgotten-nikiski-lng-proposal-had-full-environmental-review