Tall stack of authorizations await

The Alaska LNG project faces formidable permitting; below is a primer on the federal agencies whose approvals would be required

Bill White

Researcher/writer for the Office of the Federal Coordinator

Army Corps of Engineers

The project would touch a variety of wetlands in the 800-mile span between the Nikiski port in southern Alaska and Point Thomson/Prudhoe Bay on the Arctic Coast:

•Forested wetlands whose disruption could affect nutrients, stream flows and water quality.

•Scrub-and-shrub wetlands that serve a similar function as forested wetlands, but also support bird nests and animal browse.

•Emergent wetlands of sedges, grasses and scattered shrubs that buffer floodwaters, moderate stream flows and are home to juvenile fish, waterfowl and other wildlife.

•Miscellaneous other wetlands, which include ponds, small lakes and streams.

Within these types of wetlands lie many nuances and subtleties - such as those slaked by groundwater; those fed by rain, snow and overland flow; and those watered by both, to cite one example.

This is where the Corps of Engineers comes in. It regulates the discharge of dredged or fill material into U.S. waters or wetlands. Trenching the pipeline through wetlands would disturb them and would need Corps approval. The Corps would consider not only the trench, but how the buried pipeline would affect the function of surrounding wetlands. Or it would direct the sponsors to avoid particular wetlands.

The same goes for any wetlands affected by constructing the LNG plant, pipeline compressor stations, pipeline construction camps and the like, as well as the gas treatment plant at Prudhoe.

The Corps also would permit the pipeline crossing of rivers and other navigable water bodies, whether the pipe spans the river or tunnels under it.

This permit stems from one of the nation’s oldest environmental laws: the Rivers and Harbors Act of 1899. Section 10 basically aims to avoid the chaos of anybody putting anything they want in waters that other people use.

A Section 10 permit aims to protect the navigable integrity of the water body from new structures, dredging or disposed material.

The Corps has a third permitting authority that could apply to the Alaska LNG project. If the project sponsors need to deepen the shipping channel to Prudhoe Bay’s West Dock so that sealifts of deeper-draft barges could deliver construction materials, the Corps would permit transport of dredged sediment to an offshore disposal site in the Beaufort Sea.

The Corps or the Environmental Protection Agency separately would permit the offshore disposal site, as discussed in the next section.

Environmental Protection Agency

LNG buyers don’t want CO2 in the gas. LNG sellers don’t want it either. CO2 doesn’t burn, it becomes corrosive when mixed with water, and it would solidify during liquefaction (think dry ice), clunking up the machinery.

So the project sponsors would build a gas treatment plant to remove about 500 million cubic feet a day of CO2 from the produced gas stream and inject it back underground to help pressure more Prudhoe oil to the surface.

The gas treatment plant mainly would be built outside Alaska, hauled to the North Slope aboard sealifts during three or four summers, then assembled. These would be the biggest sealifts there in many years. An approach channel might need to be deepened to get the mega-barges into Prudhoe’s West Dock.

If so, the sponsors would need a Corps of Engineers permit before depositing dredged material in the ocean. The EPA would need to concur on the permit. Either the Corps or the EPA would identify a Beaufort Sea disposal site. If the EPA designates the site, the EPA and the Corps would develop a site-management plan and revise it every 10 years. If the Corps picks an alternative site, the EPA must approve it.

Any dredging that might be needed in upper Cook Inlet for LNG plant construction at Nikiski or operations would follow a simpler process. The project sponsors would need a Corps permit and disposal site. EPA wouldn’t need to OK the permit but would maintain oversight of the permit and disposal site.

EPA could play several other roles in the Alaska LNG project.

It would review and have oversight of Corps’ permits to place construction fill material in wetlands, streams, rivers and lakes.

The Alaska Department of Environmental Conservation has been delegated responsibility to issue permits on air emissions - from the gas treatment plant, the LNG plant, pipeline compressor stations and elsewhere - and wastewater disposal. The EPA has authority to step in if it finds the state permits are inconsistent with applicable laws and regulations.

EPA also would be a cooperating agency and would review the adequacy of the Alaska LNG environmental impact statement.

Fish and Wildlife Service/National Marine Fisheries Service

Congress has split oversight of endangered and threatened species, and marine mammals. It assigned some to the Fish and Wildlife Service. The National Marine Fisheries Service oversees others.

Polar bears, walruses and sea otters, among others - Fish and Wildlife Service.

Whales, seals and sea lions, among others - National Marine Fisheries Service.

The Alaska LNG sponsors would need authorizations from both agencies. The processes are similar and rigorous under the variety of federal laws that apply, principally the Marine Mammal Protection Act of 1972 and the Endangered Species Act of 1973.

Other laws are important, too, such as the Migratory Bird Treaty Act, Bald and Golden Eagle Protection Act, Fur Seal Act, Magnuson-Stevens Fisheries Conservation Act’s essential fish habitat provisions and, of course, the National Environmental Policy Act, which mandates that agencies describe and disclose the environmental implications of their decisions.

To account for the incidental take of marine mammals - unintentional harassment, injuries or deaths - each agency would issue an “incidental take authorization.” These come in two forms: A one-year incidental harassment authorization, or a letter of authorization valid for up to five years and supported by specific regulations. The authorization would govern the do’s and don’ts of Alaska LNG activities pertaining to the marine mammals.

The public process needed to obtain these can take months to more than a year, depending on the type of authorization requested.

As for endangered or threatened species, the gas project could encounter perhaps 10 or more of them. Ten were listed in the October 2012 environmental impact statement for the smaller, 737-mile state-sponsored gas-pipeline project from Prudhoe Bay to near Anchorage.

These were bowhead, fin, humpback and Cook Inlet beluga whales, Steller sea lions, Eskimo Curlews, polar bears, spectacled and Steller’s eiders, and the Southwest stock of Northern sea otters.

The endangered Cook Inlet belugas were named even though the state-sponsored gas pipeline would stop short of Cook Inlet. The belugas were noted because the project might need to deliver construction materials to the Port of Anchorage, which could disturb whales and their critical habitat. Pipeline construction also could cross salmon streams that flow to Cook Inlet, possibly reducing the food available to belugas, the EIS said, although both risks could be mitigated to minimize the chances of a problem. The Alaska LNG project plans to lay its pipeline across Cook Inlet, through beluga habitat, though sponsors haven’t selected their preferred route yet.

The Alaska LNG list of affected endangered or threatened species could exceed 10. For example, the project could affect Beaufort Sea bearded and ringed seals, which were listed as threatened in December 2012.

Then again, humpback whales could come off the endangered list. Their count is up and biologists are considering whether to delist them.

Under the Endangered Species Act, if the Fish and Wildlife Service or National Marine Fisheries Service determines the project is likely to harm a species or its critical habitat, the agency would study the situation and issue a “biological opinion” discussing it and an incidental take statement, if appropriate, allowing construction to proceed under strict conditions.

Bald and golden eagles, and their nests, are protected under a separate law. Killing obviously is a no-no. But so are noises that can be avoided. Construction projects make plenty of noise. Project sponsors would identify the nests along the route and avoid them. A Fish and Wildlife Service permit would be needed for any incidental harm to the eagles or their nests.

Winter construction, when fewer birds are around, is one way to avoid the eagles, endangered birds and migratory birds protected by other federal laws.

Seasonal construction also could mitigate damage to salmon streams and other “essential fish habitat” recognized under the Magnuson-Stevens Act. Federal biologists would be consulted for their recommendations on ways to minimize or eliminate harm from any project work in such habitat.

Pipeline and Hazardous Materials Safety Administration

One potential problem: Slopes that could slump, taking the buried pipe with it.

Or these: Frost-heaving ground that could lift the pipe, or thawing frozen soils that cause the pipe to sag.

Or this: Abrupt ground shifts during earthquakes.

Pipeline engineers have devised techniques called strain-based design to combat such stresses and strains.

The Pipeline and Hazardous Materials Safety Administration is charged with ensuring the pipeline would be built and operated to meet the objectives of federal safety standards.

The regulations don’t really speak directly to the kind of severe longitudinal strain peculiar to Alaska. It’s possible, if not likely, the Alaska LNG sponsors would propose to use new or different construction materials or methods - such as in the properties of the steel pipe or the pipe coating - or strain-based design elements that regulations don’t specifically cover.

PHMSA would consider issuing a special permit for each deviation from the regulations, as long as the proposed methods or materials meet the standards’ objectives.

Coast Guard

Bridges: Any bridges for the project would be subject to various laws that aim to ensure that the reasonable needs of navigation are maintained on all of the nation’s navigable waters.

If the pipeline needed to bridge a navigable waterway, such as the Yukon River, the sponsors would apply for a permit. The Coast Guard would analyze potential navigation impacts as well as environmental, historical and/or socio-economic impacts covered under NEPA and related laws and regulations.

LNG plant: The Alaska LNG plant operating at full capacity would load about five tankers a week. The Coast Guard would assess the suitability of Cook Inlet to handle LNG tanker traffic.

Under a passel of laws as well as an executive order from President Harry Truman in the feverish early days of the Cold War, the Coast Guard has responsibility for the safety and security of waterways, ports and other facilities along waterways, such as LNG plants. This extends to LNG carrier operations in transit and at berth.

The Coast Guard would require project sponsors to submit a “water suitability assessment” of the channel that tankers would sail to and from the LNG plant. The assessment would cover water depths; tidal range; other traffic in the channel; bridges; underwater pipelines and cables; maneuvers required to berth; where people live nearby and other details.

The Coast Guard also would send to FERC its recommendation and analysis to assist the commission with its decision whether to approve the LNG facility.

Beyond this, the Coast Guard generally would support FERC’s overall environmental-impact analysis work, providing information on tanker and port operations, potential hazards and ways to mitigate them. Coast Guard regulations detail the fire and earthquake codes, emergency communications and systems, safety training and procedures that the Alaska LNG sponsors would need to follow for their Nikiski terminal.

Before the plant starts up, the owner or operator would need the Coast Guard to approve its facility security plan, and would submit its operations and emergency manuals.

Department of Energy

Alaska LNG sponsors likely would apply to the department for two authorizations. That has been the practice among prospective LNG exporters in recent years.

One application would seek permission to export to any of the 18 nations with which the United States has a free-trade agreement covering natural gas. Getting Energy Department approval of these applications is automatic because such trade is deemed to be in the nation’s interest.

The other application would cover exports elsewhere in the world. This would apply to almost all LNG importing nations, including such biggies as Japan, China, India and Taiwan. Getting these applications approved can be much more difficult, time consuming and political.

The national interest is key. Federal law says permission to export gas to non-free-trade destinations will be granted unless, after a hearing and public process, the government “finds that the proposed exportation ... will not be consistent with the public interest.” Opponents of a proposal must make a persuasive case that exports would be bad for the United States - or the gas can go overseas.

Energy Department officials have said they consider adequacy of U.S. gas supply, energy security, price, job creation, gross domestic product, balance of trade, the environment and other factors in weighing the national interest.

For proposed Lower 48 U.S. LNG exports, opponents have included some gas-consuming petrochemical businesses and utilities, environmentalists and some people who live near the proposed plants.

The Energy Department had approved seven applications for exports to non-free-trade partners as of spring 2014, conditioned on the projects also getting FERC sanctioning. The agency determined opponents did not make strong enough cases against exports. The average time from application to conditional approval was 23 months.

As of spring 2014, the Energy Department had 26 other applications pending. The department also proposed a new approach: To act on applications only after FERC - or other federal agency in charge of environmental assessment - has sanctioned a project for construction, rather than issue conditional approvals while FERC considered the project.

The president

This presidential involvement applies only to North Slope gas, not to any of the Lower 48 LNG export projects under way or proposed.

Here’s what was up back then.

In 1976, the United States was amid an energy crisis.

Oil - U.S. oil production and reserves were shrinking. Imports were rising. Gasoline prices soaring. An Arab oil embargo - the OPEC Age had dawned.

Natural gas - production and reserves sagging, shortages looming.

Inflation pounded consumers - up 11 percent in 1974; another 9.1 percent in 1975.

Americans were mad, worried, apprehensive.

In 1976, Congress passed the Alaska Natural Gas Transportation Act to help spur development of a pipeline system that would flow North Slope gas to the rescue through Canada down into Lower 48 markets.

To ensure Alaska gas helped North Americans, Section 719j says that if North Slope gas exports exceed 1 million cubic feet a day to somewhere other than Canada or Mexico, “the President must make and publish an express finding that such exports will not diminish the total quantity or quality nor increase the total price of energy available to the United States.”

How much is 1 million cubic feet per day? Not much - the furnaces of roughly 1,600 Anchorage homes burn through that amount on a typical January day. A pretty low threshold to trigger the presidential finding. The law remains active.

On Jan. 12, 1988, LNG exports of North Slope gas got such a presidential finding. The now-shelved Yukon Pacific LNG export project was pending then, but President Ronald Reagan’s finding doesn’t specifically mention that project. It simply declares generically that it’s OK to export the gas.

It’s unclear whether this 1988 finding would still apply to an export project 30 or more years later, or whether the finding would need to be revisited. U.S. natural gas markets have evolved considerably since the 1980s.

Editor’s note: This is a reprint from the Office of the Federal Coordinator, Alaska Natural Gas Transportation Projects, online at www.arcticgas.gov/tall-stack-authorizations-await-alaska-lng-project. Part 1 ran in the Aug. 24 issue.