Interpretation Response #PI-09-0007 ([Federal Energy Regulatory Commission] [Mr. Jeff C. Wright])
Below is the interpretation response detail and a list of regulations sections applicable to this response.
Interpretation Response Details
Response Publish Date:
Company Name: Federal Energy Regulatory Commission
Individual Name: Mr. Jeff C. Wright
Country: US
View the Interpretation Document
Response text:
July 31, 2009
Mr. Jeff C. Wright
Director
Office of Energy Projects
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C. 20426
Dear Mr. Wright:
The Federal Energy Regulatory Commission (FERC) has asked whether the Siting Requirements in Subpart B, Part 193, Title 49, Code of Federal Regulations apply to a liquefied natural gas (LNG) transfer system with the following components: (l) an offshore marine berth with unloading piping located in Mount Hope Bay, Massachusetts, and (2) an interconnected pipe-inpipe (PIP) transfer system that includes processing equipment and extends 4.25 miles from the berth, through the waters and into the lands beneath the Bay and Taunton River, to a storage tank located on the grounds of a waterfront LNG plant in Fall River, Massachusetts.
Having carefully considered your question, we find that the Mount Hope Bay LNG transfer system is a marine cargo transfer system, and that the application of our Siting Requirements is, therefore, authorized by law. We further find, however, that our approved models for calculating thermal-radiation and vapor-gas dispersion distances cannot be practicably applied to the second component of this system, the 4.25-mile PIP transfer system. Accordingly, the applicant must develop, and submit to our Administrator for approval, an alternative model for calculating those distances consistent with the specific requirements listed in Subpart B and the general principles stated in this opinion.
1. Background
Two federal agencies other than FERC regulate waterfront LNG plants and offshore LNG facilities. The first is the Pipeline and Hazardous Materials Safety Administration (PHMSA), an organization within the U.S. Department of Transportation (DOT) that has jurisdiction over any gas pipeline facility used for transporting, storing, or converting LNG in interstate or foreign commerce.' The second is the U.S. Coast Guard (USCG), an agency formerly within DOT but now within the U.S. Department of Homeland Security (DHS),2 that has jurisdiction over any structure in navigable waters (or on immediately adjacent lands) used for the unloading, storage, and movement of hazardous substances, induding LNG.3
Though our jurisdiction significantly overlaps, Congress has not clearly delineated the authority ofPHMSA or USCG, except to note in our authorizing statute that an "[LNG] gas pipeline facility ... does not include any part ofa structure or equipment located in navigable waters[.),.4 But that provision, enacted in response to a 1979 delegation by the DOT Secretary to USCG,s was not meant to limit our jurisdiction. Rather, it was intended to prohibit USCG from acquiring our preemptive rulemaking authority through a secretarial delegation and using that authority to issue regulations for structures in navigable waters (an action that, if undertaken, would be contrary to the State savings clause provision in the Ports and Waterways Safety ACt).6 Thus, aside from affirming that PHMSA lacks unfettered authority to regulate structures located in navigable waters, that provision does not otherwise proscribe our jurisdiction over LNG facilities.7
Nonetheless, PHMSA has traditionally not regulated LNG facilities in navigable waters as a matter of discretion, 8 except with respect to the application of the Siting Requirements in Subpart B, Part 193. Indeed, our regulations explicitly state that those requirements apply to the portion of a marine cargo transfer system that lies "between the marine vessel and the last manifold (or in the absence ofa manifold the last valve) located immediately before a storage tank.,,9 That policy, in effect for nearly 30 years, has ensured that a set of uniform, preemptive siting requirements can be applied to an entire waterfront LNG plant, including any portion located in navigable waters, while allowing USCG to regulate nearly all other maritime matters, including the design, construction, operation, and maintenance of the marine cargo transfer system. Therefore, Part 193 does not generally regulate LNG facilities in navigable waters, except with respect to the siting of marine cargo transfer systems.
II. Analysis
With that background in mind, we must first determine whether the Mount Hope Bay LNG transfer system' 0 is a marine cargo transfer system. A marine cargo transfer system is defined in Subpart A as "a component, or system of components functioning as a unit, used exclusively for transferring hazardous fluids in bulk between a ... marine vessel and a storage tank."" The Mount Hope Bay LNG transfer system has two main components, '2 an offshore marine berth and an interconnected 4.25-mile PIP transfer system, I3 and those components function as a unit for the sole purpose of facilitating the bulk transfer of LNG from a marine vessel to a storage tank. 14 Thus, the Mount Hope Bay LNG transfer system is a marine cargo transfer system under Part 193,'5
We must next determine whether the application of the Siting Requirements to this system is authorized by law. Our jurisdiction over LNG facilities extends without limitation to any gas pipeline facility that is used for transporting, storing, or converting LNG in interstate or foreign commerce, and our regulations state that the Siting Requirements apply to the part of a marine cargo transfer system that lies between the vessel and the last manifold or valve before a storage tank. Having already determined that the Mount Hope Bay LNG transfer system is a marine cargo transfer system, we conclude that the application of our Siting Requirements to this system is authorized by law.
We recognize, however, that the practicability of applying those requirements to the Mount Hope Bay LNG transfer system is limited in at least one respect. Specifically, Subpart B states that certain models must be used to calculate the thermal-radiation and vapor-gas-dispersion distances for an LNG transfer system, but those models cannot be practicably applied to the 4.25-mile PIP transfer system. 16 Nevertheless, those regulations also authorize our Administrator to approve "alternate models" for calculating the thermal-radiation and vapor-gas-dispersion distances for LNG transfer systems, provided those alternative models "take into account the same physical factors" as the approved models and are "validated by experimental test data. ,,17 Our opinion is that such an alternative model, if properly developed by the applicant and approved by our Administrator, could be practicably applied to the entire Mount Hope Bay LNG transfer system in a manner consistent with public safety and the requirements of Part 193.
III. Conclusion
The Mount Hope Bay LNG transfer system is a marine cargo transfer system, and the application of the Siting Requirements is, therefore, authorized by law. However, using the standard models in Subpart B to calculate the thermal radiation and vapor-gas dispersion distances for the 4.25- mile system of PIP transfer piping is impracticable. Accordingly, the applicant must develop, and submit to the PHMSA Administrator for approval, an alternative model for calculating those distances consistent with the specific requirements in Subpart B and the general principles stated in this opinion.
I hope this information is helpful to you. If I can be of further assistance, please contact me at (202) 366-4595.
16 49 C.F.R. §§ 193.2057(a), 193.2059(a).
Jeffrey D. Wiese
Associate Administrator for Pipeline Safety