GC Shah, Senior Advisor at Wood (Houston, Texas, US), provides a thorough overview of the LNG-FERC permit application process, including some practical pointers for navigating through the process.
The Federal Energy Regulatory Commission (FERC) is the lead governmental agency in the US that reviews/approves LNG facility applications. FERC oversees LNG facilities through its lifecycle, including its construction phase. Other nations have similar review/approval processes. LNG-FERC application process is lengthy and cost-intensive and as you can imagine missteps could cause costly delays.
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Technology and site selection are among the initial steps that precede LNG permit application process. There are a number of mature LNG technologies and selection requires consideration of a myriad factors including, for example, feed composition, plant size, maturity of process, environmental and safety considerations, operability, process complexity (which could impact safety and profitability), and constructability. Site selection is influence by additional factors including supply and shipment infrastructure, soil characteristics, and public’s reception for the project.
FERC-LNG permitting process entails concerted effort from numerous con-tractors. Process is transparent to public and involves document review to minute details. Simply put, it involves pre-filing, public meetings, FERC review and public meetings, and eventual approval if the application meets permitting criteria. Consider the following issues for navigating through the application process.
Permit application considerations
1. Public rapport
All managers aim to minimise adverse safety, environmental, and socio-economic impact in the neighbouring community. Industry experts have aptly observed that LNG plants have demonstrated good safety record. This is a testament to LNG sponsors, operators, and the permit review process itself. Yet, it is not uncommon to run into heated concern from communities. Consider the following:
- Public meetings pose challenges as well as opportunities – to build relationships. Public interaction requires technical capability as well as diplomacy. The focus of these meetings should be to allay public’s concerns.
- At an early stage, identify and quantify to the extent possible, all impacts on the neighbours – environmental impacts, economic impact, societal impact (demographics), endangered species, protected lands and others. Obviously, some of the impacts will be positive for the community, while others may have adverse impact. In these cases, show safeguards you will put in place to minimise these impacts to a ‘low risk,’ level that is palatable to public.
- Remember, public meetings are not a one-time event. Think in terms of lifecycle. Establish a system by which you will be able to respond to pub-lic’s questions and concerns promptly.
- Perhaps this point is axiomatic – Keep legal department abreast of key developments.
- Select alternate sites, so that, in the event of intense public opposition at a specific site, you can choose an alternate site.
2. Rapport with regulatory agencies
A number of federal, state, and local regulatory agencies including, for example, EPA, Coast Guard, PHMSA (DOT – Pipelines and Hazardous Material Safety Administration), DHS (Department of Homeland Security), local city and county administrations, would be involved in the review process. Systems should be in place to answer their concerns/queries.
3. Document infrastructure
The term document infrastructure is intended to mean all relevant re-ports, studies, drawings, correspondence, and their accessibility. Alt-hough this is an intuitively obvious point, it is not uncommon to have inadequate documents and documents which are difficult to access. Consider the following:
- For systems involving diverse databases, develop ways which would facilitate document access and retrieval.
- Conduct appropriate studies to ensure compliance with numerous regulations including NFPA 59 A, and regulations referenced by 59A and LNG-FERC resource reports 1 and 13 guidance.
- Upgrade studies as the project progresses.
- Although intuitively obvious, study results should be in general agreement.
4. Contractor management
For LNG projects, multiple contractors are a norm, rather than an exception, and contractors may be dispersed globally. As might be expected, you are faced with multiple data management and communication systems.
- Ensure that diverse data management and communication systems do not result in crucial project delays. Facilitate communication among contractors – the goal is to avoid delays in project progress, while maintaining confidentiality of critical information.
- Insist on getting experience professional with relevant background in LNG industry.
- This point relates to divestitures and acquisitions of contractors. Unfortunately, these events could affect accessibility and confidentiality of your documents. Establish data management systems so that these events (divestitures/acquisitions) would have minimal impact on your documents.
5. Document management
One recurring occurrence, though seemingly minor, involves requests for information from FERC, and other agencies including state, local agencies, and the public. Consider the following points which are prone to be ignored:
- All documents should be consistent and should not contradict. For instance, a drawing might show that tank spacing for refrigerant tanks is 30 ft, while a risk assessment report might show it as 20 ft.
- Drawings should have sufficient clarity so that their 11x17 pdf copies would be easy to read. Avoid densely populated drawings.
- Studies should list all assumptions clearly and should demonstrate compliance with applicable regulatory codes.
- As the project progresses, there should be a system that ensures all documents are updated and are in congruence.
- Avoid if possible, or minimise, cross referencing documents. Excessive cross referencing will slow down document review by FERC as well as by public. Delays, collectively, could cause considerable financial loss.
- If a project is an extension of an earlier project, it is natural to indicate “refer to this document from project xxx.xxx.” Older documents should be accessible quickly. If this is not the case, prepare documents which are specific to the current project.
To sum up, the FERC-LNG process is indeed lengthy and requires good planning and management. Public participation and document management play a key role in its success.
Read the article online at: https://www.lngindustry.com/special-reports/04092020/practical-tips-for-managing-lng-ferc-permit-application-process/