Updating LNG regulations and the permitting process

In this article, we consider the current regulatory and permitting burden on LNG tanks and look for ways to improve the safety and environmental regulatory and permitting process. In the early days of handling large quantities of LNG, history witnessed several devastating LNG tank failures. The regulatory agencies responded with stringent requirements for the design and operation of LNG tanks. The public perception of LNG was negatively tainted by these high-profile incidents.

In comparison, modern LNG tanks have significantly improved safeguards and have performed exceedingly well.

It is true the energy density of LNG is high, but there are some favorable characteristics of LNG that make it less of a risk to health and safety as well as the environment. If a spill occurs, LNG will not pollute waterways or penetrate groundwater. LNG spills vaporize and rapidly rise, and this makes it difficult for LNG vapor to travel along the ground for long distances or to form an explosive vapor cloud that could significantly damage structures adjacent to the storage facility. It should be remembered natural gas is being piped into millions of residences and businesses for heating with a good safety record.

The fact that modern-day operators of LNG tanks have earned a strong reputation for good safety and environmental performance -- and the fact that LNG is not inherently a more dangerous product to store than other fuels -- means new consideration should be given to reevaluating the regulations and permitting practices for LNG storage tanks.

Perception and science of risk

LNG tanks suffer from an exaggeratedly bad reputation for being a dangerous product, probably from lingering concerns from the devastating Cleveland LNG tank disaster of 1944. Modern practices for design and operation have evolved important safeguards that totally prevent a repeat of that disaster. But how do you aggregate historical failure data into a meaningful and accurate representation of the risk to build and operate a new storage tank?

The problem with Table 1 is the probabilities are not well known and are extremely small, with no estimate or confidence levels stated. The variability of the data is high and numbers can be played with to influence the perception of risk. With continued improvements in design, construction, inspection and operation, the probabilities of failure are not represented by tables such as this and new methods such as Bayesian computation data analysis can be used to more accurately assess the risks of LNG storage today. In fact, with today's computing power, AI algorithms routinely depend on simulations using these methods.

Even though the NFPA table reports annual probabilities of failure, the results could easily be off by tens or hundreds of thousands of times without an appropriate analysis using rare event simulations. In any case, the U.K. Health Safety Executive considers a risk of one in 1 million as the level of "acceptable risk" at which no further improvements in safety need to be made. This metric is similar to the EPA values of acceptable risk. Note that in the table, failure probabilities are one to two orders of magnitude less than these criteria. With so few events and many decades of safely operating LNG facilities, better methods of risk assessment are available to provide a landscape of realistic risks in siting and designing these facilities.

Interested stakeholders should consider sponsoring a new study to collect comprehensive failure data to update the probability of failures and conduct research on scientific statistical processes that use sparse failure data to predict future probabilities of failure.

For more information, visit www.pemyconsulting.com or call (925) 302-6707.