Regulating LNG Facilities

Depending on location and use, an LNG facility may be regulated by several federal agencies, primarily the Federal Energy Regulatory Commission (FERC), the U.S. Coast Guard (USCG), and PHMSA, and by state utility regulatory agencies.

U.S. LNG import and export terminals are inspected for safe operations by the Federal Energy Regulatory Commission (FERC), the U.S. Coast Guard (USCG), and PHMSA. Peak-shaving, LNG satellite, and vehicular fuel LNG plants connected to the interstate gas transmission system are inspected by both FERC and PHMSA. Peak-shaving, LNG satellite, and vehicular fuel LNG plants connected to intrastate gas transmission pipelines or gas distribution systems are typically inspected by a State agency through an agreement with PHMSA.

PHMSA

PHMSA does not have siting authority of LNG plants.

PHMSA has exclusive authority to establish and enforce safety regulations for onshore LNG facilities. PHMSA LNG safety regulations are codified in 49 CFR Part 193, which prescribes safety standards for LNG facilities used in the transportation of gas by pipeline that is subject to federal pipeline safety laws (49 U.S.C. 60101 et seq.) and 49 CFR Part 192. 49 CFR §193.2001 establishes the scope of Part 193. PHMSA inspects LNG facilities and operators to enforce compliance with the requirements of Part 193.

49 CFR §193.2005 defines the applicability of the regulations established in Part 193. Those regulations address requirements for siting, design, construction, equipment, operations, personnel qualification and training, fire protection, and security of LNG facilities.

49 CFR §193.2013 identifies documents incorporated by reference (IBR) partly or wholly in Part 193. The National Technology Transfer and Advancement Act (NTTAA), United States Public Law 104-113, requires federal agencies to IBR existing consensus technical standards when possible and makes privately-developed technical standards enforceable under federal regulations. National Fire Protection Association (NFPA) 59A, 2001 edition – Standard for the Production, Storage, and Handling of Liquefied Natural Gas (LNG) – is a voluntary consensus standard and is a fundamental part of LNG regulations.

Operators are required to submit annual reports, incident reports, and safety-related condition reports per 49 CFR PART 191. LNG operators also are required to submit data to the National Pipeline Mapping System (NPMS). See the LNG Maps & Data page for more information.

PHMSA periodically inspects each LNG facility under its jurisdiction for compliance with Part 193.  During the inspections, PHMSA reviews operator records to determine if facility equipment has been properly maintained and if the operator has developed and follows operation, maintenance, security, and emergency procedures that ensure the continued safe operation of the facility. PHMSA enforces violations it finds. Enforcement can include civil penalties or orders directing action. In addition, if PHMSA finds conditions that are hazardous, it can require expeditious corrections of the conditions through corrective action orders.

PHMSA Advisory Bulletins

PHMSA uses advisory bulletins to inform affected pipeline operators and federal and state pipeline safety personnel of matters that have the potential of becoming safety or environmental risks. For example, PHMSA issued Advisory Bulletin ADB-12-02 on February 23, 2012, to remind operators of pipelines and LNG facilities of the need to conduct post-accident drug and alcohol testing of all potentially involved personnel despite uncertainty about the circumstances of the accident. Following are some other advisory bulletins issued to LNG facility operators.

• ADB-12-09 – to remind operators of gas, hazardous liquid, and liquefied natural gas pipeline facilities that operators should immediately and directly notify the Public Safety Access Point (PSAP) that serves the communities and jurisdictions in which those pipelines are located when there are indications of a pipeline facility emergency.
• ADB-11-03 – Pipeline Safety: Updates to Pipeline and Liquefied Natural Gas Reporting Requirements
• ADB-10-07 – Liquefied Natural Gas Facilities: Obtaining Approval of Alternative Vapor-Gas Dispersion Models
• ADB-06-04 – Lessons Learned From a Security Breach at a Liquefied Natural Gas Facility

PHMSA LNG Interpretations

PHMSA provides written clarifications of the pipeline safety regulations (49 CFR Parts 190-199) in the form of interpretation letters. These letters reflect PHMSA's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations provide one form of guidance regarding the regulations. An interpretation applies a particular rule to a particular set of facts and circumstances, and may be relied upon only by those persons to whom the interpretation is specifically addressed. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the pipeline safety regulations.

PHMSA interpretations regarding LNG are available online to provide the public with a greater awareness and understanding of the regulations. Additional PHMSA regulatory interpretations regarding LNG are also available.

State Enforcement of Federal Pipeline Safety Regulations

The Natural Gas Pipeline Safety Act of 1968, as amended, (NGPSA) authorizes the U.S. Department of Transportation to regulate pipeline transportation of natural (flammable, toxic, or corrosive) gas and other gases, as well as the transportation and storage of LNG. Operator compliance with federal and state pipeline safety regulations is monitored through a comprehensive inspection and enforcement program and through direct dialogue with operator management. State agencies work in partnership with PHMSA to assure jurisdictional operators are meeting requirements for safe, reliable, and environmentally sound operation of their facilities. More information is available regarding federal/state partnerships.

FERC

FERC is responsible for authorizing the siting and construction of onshore and near-shore LNG import or export facilities under Section 3 of the Natural Gas Act. Additionally, FERC inspects peak-shaving, LNG satellite, and vehicular fuel LNG plants connected to the interstate gas transmission system. The Commission, under Section 7 of the Natural Gas Act, also issues certificates of public convenience and necessity for LNG facilities engaged in interstate natural gas transportation by pipeline. As required by the National Environmental Policy Act (NEPA), FERC prepares environmental assessments or impact statements for proposed LNG facilities under its jurisdiction. FERC is the lead federal agency under NEPA to analyze the environmental, safety, security, and cryogenic design of proposed LNG facilities.

FERC regulations are found in Title 18 Code of Federal Regulations (18 CFR) Chapter 1, Subchapter E. LNG projects which are approved and built are subject to FERC oversight for as long as the facility is in operation. As of 2016, FERC listed 24 operational LNG facilities under its regulatory jurisdiction. Follow this link for additional details on FERC’s responsibilities in regulating LNG facilities and maps showing existing, approved, and proposed North American LNG projects, as well as FERC jurisdictional LNG peak-shaving plants.

For additional details on FERC's LNG siting process, visit http://www.ferc.gov/industries/gas/indus-act/lng.asp.

U.S. Coast Guard

The USCG has authority and regulates the marine transfer areas for each new waterfront facility handling LNG. USCG also regulates new construction in the marine transfer area for each existing waterfront facility handling LNG. The USCG conducts waterway suitability assessments to address navigation safety and port security issues associated with LNG ship traffic. USCG regulations pertaining to waterfront facilities handling LNG are identified in 33 CFR Part 127. For additional details, see the USCG Navigation And Vessel Inspection Circular (NVIC) No. 01-2011.

The USCG and the U.S. Department of Transportation's (DOT) Maritime Administration (MARAD) share responsibility for the safety, security, and environmental review of deepwater port LNG terminals.

The USCG is responsible to develop and maintain regulations and standards for deepwater ports and for processing deepwater port license applications. The Maritime Transportation Security Act of 2002 (MTSA) amended the Deepwater Port Act (DWPA) of 1974, 33 United States Code 1501, et seq., to include natural gas. This allowed for the construction and operation of offshore facilities to import and process natural gas for distribution through the country's pipeline infrastructure. The USCG coordinates agency and public reviews and participation in the deepwater port licensing process. The USCG manages the development of a single environmental impact statement (EIS) for compliance with the National Environmental Policy Act of 1969 (NEPA) for deepwater port license applications and associated federal permits. The USCG develops guidance for oversight of post-licensing activities associated with the development of deepwater ports including the design, construction, and activation phases, environmental monitoring programs, operational procedures, risk assessments, security plans, safety and inspections. The USCG also maintains and updates the regulations for deepwater ports, found in 33 Code of Federal Regulations (CFR) Subchapter NN. Follow this link for additional details on the U.S. Coast Guard role in deepwater port siting.

The USCG and the U.S. Department of Transportation's (DOT) Maritime Administration (MARAD) share responsibility for the safety, security, and environmental review of deepwater port LNG terminals.

The Maritime Administrator will render a final decision licensing decision based on the applicant's ability to meet and comply with the following nine criteria as set forth in the Deepwater Port Act of 1974:

1. Demonstrate Financial Responsibility
2. Demonstrate Compliance with Relevant Laws, Regulations, and License Conditions
3. Determination of National Interest
4. Non Interference with International Navigation
5. Minimal Impact on the Marine Environment
6. Compliance with National Environmental Laws
7. Consultation with the Secretaries of the Army, State and Defense
8. Approval of the Governor of the Adjacent Coastal State
9. Consistency with Coastal Zone Management Program(s)

The Maritime Administration's decision to approve, approve with conditions or deny the application is documented in a Record of Decision that includes a summary of the nine criteria outlined above as well as a summary of the environmental conditions derived from the EIS process. Subsequently, upon further demonstration of financial capability to construct, operate and decommission the deepwater port, the Maritime Administrator may issue a license for the deepwater port.

Visit the MARAD website for additional information on the MARAD deepwater port licensing program.