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Revised Job Impact Exemption Statement - 6 NYCRR Part 570

Liquefied Natural Gas

In accordance with Section 201-a(2)(a) of the State Administrative Procedure Act, a Job Impact Statement has not been prepared for this rule making, as it is not expected to create a substantial adverse impact on jobs and employment opportunities in New York State (the State). To the contrary, 6 NYCRR Part 570 is expected to create, as set forth below, a positive impact on employment opportunities.

The New York State Department of Environmental Conservation (DEC) has determined that the proposed Liquefied Natural Gas (LNG) regulations will have a positive impact on jobs and employment opportunities throughout the State. There would be a creation of an essentially new industry with this rulemaking and it will not replace any existing petroleum or chemical facilities in the State. There are several types of LNG facilities that could be developed in connection with this new industry. Under the regulations proposed in September, 2013, these included: LNG import/export terminals (which would require federal approvals); peak-shaving plants that produce/store/vaporize LNG; regional LNG production facilities (relatively large quantities). But under the revised proposal, these three types of LNG facilities will not be permitted, as the capacity limit of 70,000 in effect excludes them from the Part 570 permitting program. However, LNG production at natural gas wells; LNG production at facilities with access to a natural gas pipeline; and, most immediately, LNG fueling facilities without on-site production of LNG are still likely. Types of employees needed for the LNG industry include, but are not limited to, truckers (employed by either the LNG facility or an independent transportation company); fire and safety, and security personnel; and operators for various locations in the process at LNG facilities. In many cases, facilities can be expected to be operating 24 hours per day, 7 days per week.

An LNG study was conducted in 2011 by the New York State Energy Research and Development Authority, with DEC staff providing input on the scope of work and review of the resulting report. This study indicated that there would be several permanent jobs at each new LNG facility, as well as temporary jobs during the initial construction, installation and start-up of these facilities. It also estimated that between 10 and 25 facilities (best estimate 21) will be permitted in the first 5 years after Part 570 is promulgated. For additional information, please refer to the report, "NYS Liquefied Natural Gas, 6 NYCRR Part 570, Promulgation Support Study," dated September 20, 2011, which is available on DEC's web site. After this report was issued, DEC received several inquiries from industry and utilities indicating their interest in LNG facilities.

The following outline provides information about each section of the proposed regulations and the impact on potential employment opportunities in this new LNG industry.

Section 570.1 contains a description of the general purpose, applicability, definitions, exemptions, severability, and enforcement provisions of Part 570. The purpose of this section is to ensure the orderly and efficient administration of Article 23, Title 17 of the Environmental Conservation Law (ECL) at LNG facilities throughout the State. There is no negative effect on the generation of employment opportunities under this section.

Section 570.2 applies to the permit requirements and application procedures for LNG facilities, including explanation of the permit application process; criteria for siting; permit issuance, duration and renewal; public participation guidelines; modification of permit and change of ownership; permit suspension or revocation; an upper limit of 70,000 gallons on the total amount of LNG that will be allowed to be stored at a permitted facility; and program fees and costs. This new limit on facility capacity at a permitted LNG facility will eliminate or greatly curtail the possibility of new peak shaving facilities and regional LNG production facilities. As noted above, LNG import or export facilities would be primarily under federal jurisdiction. This section also outlines the required procedures to obtain a permit for constructing and operating LNG facilities, which will result in increased economic growth and job creation in the State.

Section 570.3 applies to site inspections, recordkeeping, and training of local fire department personnel. Applicants for permits shall offer emergency training for local fire department staff required for local code enforcement. Compliance with training and inspection requirements can either be determined by DEC's personnel, or by third parties who are qualified to monitor compliance, thereby creating additional potential for employment. New York State Department of Public Service (NYSDPS) has inspection responsibilities for those LNG facilities under the jurisdiction of the Public Service Commission. It is expected that existing NYSDPS staff will handle the limited number of additional inspections that the LNG regulations will require for facilities under their jurisdiction.

Section 570.4 delineates the intrastate and interstate transportation requirements of LNG within the State, and thus does not result in job creation, reduction, or elimination.

Section 570.5 applies to the requirement that pre-existing facilities comply with the rules and regulations of this Part and the procedures outlined in the LNG statute, ECL Article 23 Title 17. This section does not affect job creation, reduction, or elimination; these facilities are expected to continue to operate substantially as before promulgation of Part 570. The term referring to these facilities has been changed from that used in the proposed documents noticed on September 11, 2013, from "non-conforming" to pre-existing" facilities.

Section 570.6 applies to the permanent closure of out-of-service LNG storage tanks, referring to engineering guidelines and procedures that must be complied with to ensure proper closure. Closure activities performed at these LNG facilities will most likely result in increased temporary employment.

Section 570.7 pertains to financial assurance that may be required by DEC to ensure proper closure of LNG facilities, the form and amount of which will be established by DEC. This section does not affect job creation, reduction, or elimination.

Section 570.8 states the requirements for reporting a spill of LNG at a permitted facility. This section does not result in job creation, reduction, or elimination.

Section 570.9 recognizes the existence of a moratorium on the siting of LNG facilities in New York City and specifies that the LNG regulations will not affect any moratorium. This section does not result in job creation, reduction, or elimination.

Section 570.10 provides a listing of reference materials that are cited in 6 NYCRR Part 570, including those that are incorporated by reference, and explains how they can be obtained for inspection or purchasing, which does not impact job creation, reduction, or elimination.

In consideration of the foregoing, DEC concludes that adoption of this regulatory proposal for new LNG facilities will not have substantial adverse impacts on jobs within the State. Rather, with the construction and operation of new LNG facilities, a relatively small number of various employment opportunities will be created at different types of LNG facilities based on growth of this new alternative fuel and its availability throughout the State.

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