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Summary of Assessment of Public Comment (10/30/2014) - 6 NYCRR Part 570

Liquefied Natural Gas Facilities

On September 11, 2013, the New York State Department of Environmental Conservation (DEC) proposed the adoption of 6 NYCRR Part 570 to implement requirements for siting and operation of Liquefied Natural Gas (LNG) facilities and transportation of LNG under Environmental Conservation Law (ECL) Article 23, Title 17 ("LNG statute"). A public hearing was held on October 30, 2013 in Albany, NY. In response to public requests, the comment period was extended 30 days to December 4, 2013. DEC received approximately 57,000 submittals, representing approximately 131,000 individual comments. All comments were reviewed, categorized, and counted (195 unique comments were identified). Below is a summary of the comments and DEC's responses.

All 195 comments, and DEC's complete responses, are in the Assessment of Public Comment on September 11, 2013 Proposal - 6 NYCRR Part 570 - Liquefied Natural Gas (PDF) (350 KB).

1. General Comments in Support

These comments encouraged DEC to promulgate Part 570, noting it provides environmental benefits such as reduced emissions from substituting natural gas for petroleum. They also noted that LNG fire hazards are similar to those associated with other flammable fuels, and found Part 570 is otherwise protective of public health and the environment. These commenters pointed out that LNG is already transported safely across the country and State, and has been stored safely in three grandfathered facilities in the State. Others suggested other benefits from adoption of the regulation (e.g., greater consistency among states, reduction in transportation costs).

DEC generally concurs with these comments, and notes the similar fire hazards between LNG and other volatile fuels. The State of California and Argonne National Laboratory have found that the life-cycle carbon footprint of producing and using LNG is less than that of petroleum or coal. Specific reductions in emissions were noted for hydrocarbons, carbon monoxide, oxides of nitrogen, and greenhouse gases.

2. General Comments in Opposition

A large number of these comments raised general concerns about safety issues. Many claimed that adoption of Part 570 would create an "infrastructure" of LNG facilities, increasing the likelihood that the State would approve high-volume hydraulic fracturing (HVHF) as a drilling technique. Some commenters opined that Part 570 falls short of the statutory requirement to provide "maximum safeguards" for permitting LNG facilities.

The production of natural gas is outside the scope of this rulemaking. Part 570 contains no provisions regarding the production of natural gas and focuses on the mandate in the LNG statute to promulgate an LNG regulation. Part 570 would result in less than a one percent increase in natural gas usage in the State. In addition, the safety record for LNG is similar to, or better than, that of other fuels. The consensus among other states is that it is appropriate to rely upon the established standards of the National Fire Protection Association (NFPA) for handling LNG. These requirements have been part of the State Building and Fire Code for many years. DEC noted the environmental benefits of using LNG over petroleum and coal, as discussed above. Further, natural gas is already the largest single source of energy in the State and is used in millions of residences, and commercial and industrial applications, demonstrating that natural gas (liquid and gaseous) is already managed safely in the State. Examples include three multi-million gallon "grandfathered" LNG production and storage facilities that have been operating in New York City and Suffolk County for over 40 years without incident. The explosion at an LNG storage tank in 1973 was a maintenance accident at a tank that had been emptied of LNG for a year.

3. General Comments on Part 570

Many commenters expressed concern that Part 570 is not adequately protective because it does not limit emissions of methane, a potent greenhouse gas and a contributor to climate change. Others suggested that Part 570 should include requirements to prevent impacts to a wide variety of public and environmental concerns (e.g., water quality, noise, wetlands, bird migration, etc.). Many felt that the NFPA standards are inadequate to protect the public. Some expressed the opinion that Part 570 is not clear about the types of LNG facilities to be permitted. Some of these commenters felt that DEC documents hid the fact that facilities other than truck refueling facilities could be permitted under the regulation.

DEC's responses explain that most LNG facilities, including the grandfathered facilities, do not normally emit large volumes of methane. Other emissions are controlled under other regulations. If an LNG facility emitted significant quantities of pollutants, it would be subject to those regulations. DEC concludes that other impacts (e.g., water quality, wetlands, etc.) would be positive, insignificant, and/or covered by other state regulations. DEC points out that there would be environmental benefits from switching to LNG from petroleum, such as a lower threat of surface water and groundwater contamination compared to storing petroleum, because any LNG spilled would quickly vaporize, and not impact water. As noted, the NFPA standards have been included in fire codes in New York and other states for years. DEC will coordinate with the State Office of Fire Prevention and Control (OFPC), the state agency with fire safety expertise, on fire safety issues.

As indicated in the 2011 New York State Energy Research and Development Authority (NYSERDA) report, there is consensus among regulatory agencies that the NFPA standards establish appropriate requirements for the safe management of LNG. DEC notes that Part 570 would provide the most comprehensive LNG management system in the nation, because beyond the NFPA standards, DEC will require permits, tailored for each facility. Proposed Part 570 and the revised rule making documents clearly indicate that other types of LNG facilities may be permitted, although truck fueling facilities are likely to predominate among early applications. Large LNG import or export facilities are expected to be outside DEC's jurisdiction and would require permits from federal agencies, potentially including the Federal Energy Regulatory Commission, Coast Guard, United States Department of Transportation, and/or others. The inclusion of a maximum facility capacity of 70,000 gallons in the revised proposal addresses the concern that Part 570 would make the construction of large LNG facilities more likely.

4. Specific Comments on Part 570

The most frequent of these comments is that there should be an upper limit on the volume of LNG that may be stored at facilities.

Many factors influence the fire safety risks presented by a specific LNG facility such as individual tank capacities and layout, location, overall capacity, surrounding land uses, capabilities of local fire departments, availability of firefighting water for cooling, etc. Although DEC could not find any study or data that shows that higher capacity facilities have greater risk for fire or explosion than lower capacity facilities, an accident involving a facility with large capacities would have the potential for greater damage than a smaller facility. After careful consideration of the issue, DEC has revised the proposed regulation to include an upper limit of 70,000 gallons of facility capacity based upon reasons provided in the full assessment of comments.

Some commenters would prefer more specific siting requirements. But the regulation requires applicants to provide all information DEC will need to determine whether or not to issue a permit for a facility. The revised proposed Part 570 includes additional detail on the information that must be included in a complete application; however, it would be impracticable to attempt to list all factors and criteria that may be for every potential scenario. DEC needs flexibility to evaluate each case separately.

Several commenters asked for clarifications of the text of Part 570. Clarifying changes proposed in the revised rulemaking include:

  • changed "non-conforming" LNG facility to "pre-existing" LNG facility
  • clarified that LNG fuel tanks exempt from Part 570 are those used to power a vehicle, not tank trailers used to transport LNG to be used later as fuel
  • clarified the criteria for evaluating alternative locations for siting an LNG facility
  • clarified recordkeeping and production requirements
  • expressly stated that transportation of LNG must comply with all applicable State and federal requirements
  • clarified when out-of-service storage tanks must be permanently closed
  • clarified spill reporting requirements
  • clarified DEC's cost recovery authority.

For some comments, DEC does not propose rule revisions because they are not authorized under the law. For example, the LNG statute specifically makes applicants responsible for training local fire fighters. In some cases, suggested changes are impracticable or unnecessary. For example, it was suggested that DEC announce all inspections beforehand but unannounced inspections are an important compliance tool.

Many commenters wanted assurances that local emergency responders will be prepared and equipped for LNG incidents.

The law and proposed Part 570 require evaluations of every fire company that would respond to an LNG incident before a permit is issued. Any deficiencies in staffing, training or equipment must be rectified (and paid for) by the applicant. DEC will provide guidance on the training and numbers of firefighters, and equipment that should be available for responding to an LNG incident, including how these capabilities would increase as facility/tank capacities increase. Some comments contended that the LNG routing requirements were inadequate, while others suggested they were unnecessary.

The LNG statute requires that the New York State Department of Transportation (NYSDOT) certify any intrastate route for supplying a facility with LNG. The Regulatory Impact Statement explains that NYSDOT has determined that it is impracticable to certify LNG intrastate routes, since it does not certify routes for any other hazardous materials. The LNG statute requires certification of transportation routes; therefore, intrastate routing of LNG is effectively prohibited at this time. Therefore, facilities that do not generate their own supply of LNG must import it from out of State.

Some commenters suggested that financial assurance be required in every case, or be expanded to require insurance to reimburse any third parties that suffer LNG-related losses.

Due to the physical properties of LNG, and the nature of storage facilities, financial assurance would not often be necessary. It is unlikely there would be any LNG left when a facility closes permanently (due to the value of natural gas as a product). Tanks and equipment would be empty and be easily disposed due to their salvage value. The statute itself specifies that strict liability applies to damages resulting from LNG facility operations. DEC will also require proof of liability insurance for facility operations. DEC has authority to recover all state costs.

Some commenters believe that the requirements for reporting spills are inadequate or vague.

The revised rulemaking clarifies that the threshold for reporting spills is one gallon or more, or lesser amounts that result in a fire or explosion. In addition, it is proposed to allow more time in most situations, i.e., ten days rather than two, to submit written evaluations of spills, so the reports would be more complete and well-considered. DEC reserved the right to shorten or lengthen this period as needed.

5. General Comments on Rulemaking Documents and Process

Many commenters felt that DEC should have issued a positive declaration under the State Environmental Quality Review Act (SEQRA) regarding the promulgation of Part 570. They claimed this would have entailed the evaluation of many factors they felt should be considered more closely (e.g., climate change, energy policies, wildlife impacts, noise, light, bird migration, water quality, terrorism, health care).

DEC took the requisite "hard look" at environmental impacts, and carefully considered whether promulgation of Part 570 may have significant adverse environmental impacts. DEC convened a working group of six state agencies and, with NYSERDA, completed a study of how LNG is regulated in other states. The study also developed projections of facilities, jobs, and costs required under the State Administrative Procedure Act. DEC concluded that promulgation of Part 570 would not have significant adverse environmental impacts, making the negative declaration under SEQRA proper. This rule making would result in environmental benefits, in terms of lower air emissions and avoidance of greater impacts associated with the storage and handling of petroleum. All individual permit applications will undergo full SEQRA review, which would include, if appropriate, positive declarations.

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