Are Small-Scale Lng Export Facilities Underregulated in the U.S.?

Abstract

In 2015, the Federal Energy Regulatory Commission (FERC) ruled that small-scale facilities that export liquified natural gas (LNG) via truck-sized containers fall outside their jurisdiction. Several groups contend that the exports lack proper oversight. We describe current local, state, and federal oversight of small-scale export facilities and the current risks of environmental injustice in siting, leaks and incidents from operations, and incidents in transport. We find that the current governance arrangement does not appear to lead to environmental injustice: recently sited facilities were not disproportionately located in low-income or minority communities. Regarding other risks, the average small-scale liquefaction facility had a leak once every four years, an operation incident (e.g., a major leak) once every 70 years, and a trucking incident roughly once every 60 years. FERC oversight and the resulting environmental assessments do not appear to reduce risks from operations as evidenced by leak and incident rates for small-scale facilities with and without FERC oversight.