E5-3124. Draft General Conformity Determination; Golden Pass LNG Terminal and Pipeline Project; Jefferson, Newton, and Orange Counties, TX, and Calcacieu Parish, LA

June 10, 2005.

In Reply Refer to: OEP/DG2E/Gas Branch 2, Golden Pass LNG Terminal LP, Docket No. CP04-386-000, Golden Pass Pipeline LP, Docket Nos. CP04-400-000, CP04-401-000, and CP04-402-000.

To the Party Addressed

The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared a draft General Conformity Determination to assess the potential air quality impacts associated with the construction and operation of a liquefied natural gas (LNG) import terminal and natural gas pipeline proposed by Golden Pass LNG Terminal LP and Golden Pass Pipeline LP, referred to as the Golden Pass LNG Terminal and Pipeline Project, in the above referenced dockets.

This Draft General Conformity Determination was prepared to satisfy the requirements of the Clean Air Act.

Comment Procedures

Any person wishing to comment on the Draft General Conformity Determination may do so. To ensure consideration of your comments in the Final General Conformity Determination, it is important that we receive your comments before the date specified below. Please carefully follow these instructions to ensure that your comments are received in time and properly recorded:

• Send an original and two copies of your comments to: Magalie R. Salas, Secretary, Federal Energy Regulatory Commission, 888 First Street, NE., Room 1A, Washington, DC 20426.
• Reference Docket Nos. CP04-386-000 and CP04-400-000 et al.;
• Label one copy of the comments for the attention of Gas Branch 2, PJ11.2; and
• Mail your comments so that they will be received in Washington, DC on or before July 12, 2005.

Please note that we are continuing to experience delays in mail deliveries from the U.S. Postal Service. As a result, we will include all comments that we receive within a reasonable time frame in our environmental analysis of this Project. However, the Commission strongly encourages electronic filing of any comments or interventions to this proceeding. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site at http://www.ferc.gov under the “e-Filing” link and the link to the User's Guide. Before you can file comments you will need to create a free account, which can be created by clicking on “Login to File” and then “New User Account.”

After all comments are reviewed, the staff will publish and distribute a Final General Conformity Determination for the Project.

Magalie R. Salas,

Secretary.

Table of Contents

1.0 Introduction to Proposed Action

2.0 Regulatory Background—General Conformity

3.0 General Conformity Applicability

4.0 Air Emissions Inventory

5.0 Preliminary General Conformity Determination

5.1 NO_X Emission Offsetting

5.2 Other Impact Mitigation Practices

5.3 Conditions for Granting a Final Conformity Determination

Tables:

Table 4-1 Estimated Onshore and Marine Construction Emissions

Table 4-2 Controlled Air Emission Estimates for the Proposed LNG Terminal

Table 4-3 Estimated Indirect Emissions During Terminal Operation

Attachments:

1 September 24, 2004, Conditional Conformity Certification From the Texas Council of Environmental Quality

Introduction to Proposed Action

On July 29, 2004, Golden Pass LNG Terminal LP filed an application with the Federal Energy Regulatory Commission (FERC or Commission) in Docket No. CP04-386-000 for authorization under Section 3(a) of the Natural Gas Act (NGA) to site, construct, and operate a liquefied natural gas (LNG) terminal on the Port Arthur Channel of the Sabine-Neches Waterway (SNWW) in Jefferson County, Texas. In related applications filed on August 20, 2004, Golden Pass Pipeline LP seeks a Certificate of Public Convenience and Necessity (Certificate) to site, construct, and operate a new natural gas pipeline system and ancillary facilities to connect the LNG terminal to existing intrastate and interstate gas transmission facilities in Texas and Louisiana (Docket No. CP04-400-000); a blanket certificate to perform routine activities in connection with the future construction, operation, and maintenance of the proposed natural gas pipelines (Docket No. CP04-401-000); and authority to provide open-access transportation of natural gas to others (Docket No. CP04-402-000). Golden Pass LNG Terminal LP and Golden Pass Pipeline LP hereafter are referred to collectively as Golden Pass.

Golden Pass' proposed facilities would import, store, and vaporize an average of approximately 2 billion cubic feet per day (Bcfd) of natural gas (with a peak capacity of 2.7 Bcfd) for delivery into the existing intrastate and interstate pipeline systems. The LNG import terminal would be constructed in two phases, each lasting approximately 48 months. Phase 2 construction would begin approximately 12 months after the start of Phase 1 construction and would increase the average capacity from 1.0 to 2.0 Bcfd. The import terminal would be designed to accept LNG cargoes, temporarily store and vaporize LNG, and would contain the following facilities:

• A protected LNG unloading slip, LNG ship and support vessel maneuvering area that would be capable of receiving up to 200 LNG ships per year;
• Ship unloading facilities consisting of two berths, each capable of accommodating LNG ships ranging from 125,000 cubic meters (m³) to 250,000 m³, and associated facilities (the first berth would be constructed during Phase 1 and the second during Phase 2);
• A total of five full-containment LNG storage tanks each with a working capacity of 155,000 m ³ (three tanks would be constructed during Phase 1 and two during Phase 2);
• A total of ten shell-and-tube heat transfer fluid (HTF) LNG heat exchangers to vaporize the LNG (five exchangers would be installed during Phase 1 and five during Phase 2); and
• Associated support facilities, including administrative buildings, storage and maintenance areas, electric power systems, access roads, and other facilities related to the LNG import terminal.

Golden Pass also proposes to construct a pipeline system, capable of transporting up to 2.5 Bcfd of natural gas and consisting of three pipelines and associated pipeline support facilities, including pig launchers and receivers, and meter stations. The pipeline system would be installed in overlapping phases across three counties in Texas and one parish in Louisiana, and would consist of the:

• Mainline—A 77.8-mile-long, 36-inch-diameter pipeline extending from the LNG import terminal in Jefferson County through Orange, and Newton Counties, Texas (66.5 miles) and Calcacieu Parish, Louisiana (11.3 miles) to an interconnection with an existing Transcontinental Gas Pipe Line Corporation (Transco) interstate pipeline near Starks, Louisiana (to be installed over an estimated 14-month period);
• Loop—A 42.8-mile-long, 36-inch-diameter pipeline that would be installed adjacent to (e.g.,) loop ^[1] the Mainline and would extend from the LNG import terminal in Jefferson County to an interconnection with the existing American Electric Power (AEP) intrastate Texoma Pipeline in Orange County, Texas (to be installed over an estimated 9-month period beginning with and concurrently with the Mainline);

• Beaumont Lateral—A 1.8-mile-long, 24-inch-diameter pipeline extending from the Mainline in Jefferson County, Texas to industrial customers in Beaumont-Port Arthur, including the Exxon Mobil Corporation (ExxonMobil) Beaumont Refinery Complex (to be installed over an estimated 1-month period after installation of the Loop is complete);
• Meter stations and interconnection facilities to interconnect with up to 11 existing intrastate and interstate pipelines; ^[2] and

• Associated pipeline facilities, including pig launchers and receivers, and block valves.

All of these facilities are referred to as the Golden Pass LNG Terminal and Pipeline Project. The LNG terminal facilities (or Project) would be located in Jefferson County, Texas, in the Beaumont-Port Arthur area, which is currently designated nonattainment for the l-hour ozone standard. Therefore, oxides of nitrogen (NO_X) and volatile organic compounds (VOCs) are regulated as nonattainment pollutants for this project and may trigger the general conformity requirements established by the U.S. Environmental Protection Agency (EPA).

Regulatory Background—General Conformity

The EPA promulgated the General Conformity Rule on November 30, 1993 in Volume 58 of the Federal Register (FR) Page 63214 (58 FR 63214) to implement the conformity provision of title I, section 176(c)(1) of the Federal Clean Air Act (CAA). Section 176(c)(1) requires that the Federal Government not engage, support, or provide financial assistance for licensing or permitting, or approving any activity not conforming to an approved CAA implementation plan The applicable plan for this Project is the Beaumont-Port Arthur ozone attainment State Implementation Plan (SIP).

The General Conformity Rule is codified in Title 40 of the Code of Federal Regulations (CFR) part 51, subpart W, “Determining Conformity of General Federal Actions to State or Federal Implementation Plans” and the conformity analysis criteria are specified in 40 CFR part 93. General conformity provisions are also incorporated in Texas regulations at 30 TAC § 114.260. The General Conformity Rule applies to all Federal actions except programs and projects requiring funding or approval from the U.S. Department of Transportation (DOT), the Federal Highway Administration, the Federal Transit Administration, or the Metropolitan Planning Organization. In lieu of a conformity analysis, these latter types of programs and projects must comply with the Transportation Conformity Rule promulgated originally by the EPA on November 24, 1993 (58 FR 62188) and revised several times thereafter, most recently on July 1, 2004.

Title 1, Section 176(c)(1), of the CAA defines conformity as the upholding of “an implementation plan's purpose of eliminating or reducing the severity and number of violations of the National Ambient Air Quality Standards (NAAQS) and achieving attainment of such standards.” Conforming activities or actions should not, through additional air pollutant emissions:

• Cause or contribute to new violations of any NAAQS in any area;
• Increase the frequency or severity of any existing violation of any NAAQS; or
• Delay timely attainment of any NAAQS or interim emission reductions.

The General Conformity Rule establishes conformity in coordination with and as part of the National Environmental Policy Act process. The rule takes into account air pollution emissions associated with actions that are federally funded, licensed, permitted, or approved, and ensures emissions do not contribute to air quality degradation, thus preventing the achievement of State and Federal air quality goals. In short, General Conformity refers to the process of evaluating plans, programs, and projects to determine and demonstrate that they meet the requirements of the CAA and the SIP. The purpose of this General Conformity requirement is to ensure that Federal agencies consult with State and local air quality districts so that these regulatory entities know about the expected impacts of the Federal action and can include expected emissions in their SIP emissions budget.

Pursuant to the General Conformity Rule, a Federal agency must make a General Conformity Determination for all Federal actions in nonattainment or maintenance areas where the total of direct and indirect emissions of a nonattainment pollutant or its precursors exceeds levels established by the regulations.

The Beaumont-Port Arthur area currently does not have an approved ozone SIP. On March 30, 2004, EPA published a final rule in the Federal Register withdrawing its approval of the Beaumont-Port Arthur attainment demonstration and the associated 2007 attainment date, and finding that the Beaumont-Port Arthur area had failed to come into attainment by applicable deadlines. The Beaumont-Port Arthur area was reclassified as a serious one-hour nonattainment area for ozone effective April 29, 2004 with an attainment deadline of November 15, 2005. Even though the Beaumont-Port Arthur area does not currently have an approved ozone SIP, a General Conformity Determination is still needed to ensure that the Project would not interfere with efforts to achieve attainment of the NAAQS.

This draft General Conformity Determination has been prepared pursuant to the CAA section 176(c)(1) to assess whether the emissions that would result from the FERC's action in authorizing the Golden Pass LNG Project would be in conformity with the Beaumont-Port Arthur SIP for ozone. The FERC has worked with Golden Pass to quantify and present the emissions associated with the Project described herein. Should the FERC act favorably on Golden Pass' application, any final authorization for construction would be withheld by the FERC until any appropriate mitigation measures required to ensure the Project's conformity with the SIP are finalized and agreed to by Texas Council on Environmental Quality (TXCEQ) and Golden Pass.

General Conformity Applicability

The General Conformity Rule applies to all nonattainment and maintenance areas. The LNG terminal would be located in the Beaumont-Port Arthur Ozone Nonattainment Area, which has been designated as a serious ozone nonattainment area with respect to the 1-hour NAAQS for ozone. The Project area is in attainment with NAAQS for all other criteria pollutants.

A General Conformity Determination in a serious ozone nonattainment area is required for any project that would result in combined direct and indirect emissions of either NO_X or VOCs equal to or greater than 50 tons per year (tpy). A General Conformity Determination is not required for actions where the total of direct and indirect emissions is below these emissions levels. In addition, even if the total of direct and indirect emissions of NO_X or VOCs is below 50 tpy, when the total of direct and indirect emissions of any pollutant from the Federal action represents 10 percent or more of a nonattainment or maintenance area's total emissions of those pollutants, then the action is defined as a regionally significant action and a General Conformity Determination would be required.

Consistent with section 176(c)(1) of the CAA, a Federal action is generally defined as any activity engaged in or supported in any way by any department, agency, or instrumentality of the Federal Government (40 CFR 51.852). Federal actions include providing Federal financial assistance or issuing a Federal license, permit, or approval. Where the Federal action is a permit, license, or other approval for some aspect of a non-Federal undertaking, the relevant activity is the part, portion, or phase of the non-federal undertaking that requires the Federal license, permit, or approval. Because the FERC would authorize the construction and operation of the proposed Golden Pass LNG Terminal and Pipeline Project pursuant to Section 3 of the Natural Gas Act, it is considered a Federal action, and the resulting emissions of NO_X and VOCs must be assessed to determine if they would conform to the Beaumont-Port Arthur SIP.

Air Emissions Inventory

The air emissions inventory for the Project was prepared using widely-accepted methods. Emissions were estimated for both construction and operation of the proposed project. Onshore construction emissions estimates include exhaust resulting from combustion of fuels to operate equipment, fugitive dust emissions from operation of construction equipment at the construction site, offsite vehicle exhaust, and fugitive dust from vehicle travel to the site. Marine construction emissions estimates include vehicle exhaust from deliveries made by off-site vehicles, exhaust from marine construction equipment, exhaust from operation of the dredge, dredged material maintenance activities, and fugitive dust generated from these activities. Estimated construction emissions are listed in Table 4-1 for onshore and marine construction activities.

Emission estimates for terminal operations include emissions from the HTF heaters, diesel fuel storage tanks, diesel firewater pumps, the emergency diesel electric generator, and from fugitive emissions from the terminal. Emissions from the eight natural gas-fired HTF heaters are based on an operating heat duty of 227 MMBtu/hr per heater. Emission estimates from diesel fuel storage include a nominal 33,600-gallon primary storage tank, a 3,800-gallon day tank to supply diesel fuel for the emergency electric generator, and two 500-gallon day tanks to supply diesel fuel for each of the two firewater pumps. Emissions from the diesel generator are based on a 2,500 kW unit using diesel fuel containing 0.3 percent sulfur, and an assumed 100 hours of operation per year. Fugitive emissions as based on the number of valves, pumps, compressors, relief valves, flanges/connections, open-ended lines, and sampling connections incorporated into the terminal facility design.

Table 4-1.—Estimated Onshore and Marine Construction Emissions

Description	Emission estimates (lb/hr)					Total emission estimates (tons/yr)
	NOX	CO	VOC	SO2	PM10	NOX	CO	VOC	SO2	PM10
Estimated Onshore Emissions:
Onsite Construction—Exhaust	145.8	45.5	8.1	26.0	9.4	150.5	48.1	8.6	26.9	10.0
Offsite Vehicle—Exhaust	36.6	66.1	5.2	4.9	2.8	60.9	75.1	6.1	9.1	4.1
Construction—Fugitive Dust Emissions					269.6					245.1
Offsite Vehicle Travel—Fugitive Dust					107.4					103.8
Total	182.4	111.6	13.3	30.9	389.3	211.4	123.2	14.7	35.9	363.0
Estimated Marine Emissions:
Dredge Spoils Management—Exhaust	7.9	1.8	0.5	1.5	0.6	a 34.6	a 7.8	a 2.1	a 6.4	a 2.4
Marine Deliveries—Exhaust	34.9	3.4	0.3	26.2	0.9	a 4.8	a 0.5	a 0.04	a 3.6	a 0.1
Dredging Exhaust	143.1	29.7	7.4	23.8	6.9	a 479.2	a 99.5	a 24.8	a 79.7	a 23.2
Slip Construction Activities—Exhaust	87.4	80.3	8.6	31.9	6.0	a 143.6	a 138.0	a 14.5	a 54.0	a 9.9
Total	273.3	115.2	16.8	83.3	14.4	a 662.2	a 245.8	a 41.4	a 143.7	a 35.9
a Emissions are presented in total tons instead of tpy because most of the individual marine construction activities will be completed in less than a year.

Estimated LNG terminal operating emissions are listed in Table 4-2. The listed values represent emissions with the application of add-on emission controls for the HTF heaters, which consist of low-NO_X burners and a Selective Catalytic Reduction (SCR) control system for NO_X control. The SCR system will also incorporate an oxidation catalyst for reduction of CO emissions.

The total estimated direct long-term emissions from the Golden Pass LNG terminal equipment are a maximum of 47.7 tpy NO_X and 33.4 tpy of VOCs.

Table 4-2.—Controlled Air Emission Estimates for the Proposed LNG Terminal

Description	Emission estimates (lb/hr)							Emission estimates (tons/yr)
	NOX	CO	VOC	SO2	PM10	HAPs	NH3	NOX	CO	VOC	SO2	PM10	HAPs	NH3
HTF Heaters	12.7	27.3	9.8	24.9	13.5	0.7	11.4	41.8	89.5	32.2	5.0	44.5	2.2	37.5
Diesel Fuel Storage Tanks			1.2							0.0
Diesel Firewater Pumps	37.2	8.0	3.0	2.5	2.6	0.1		1.9	0.4	0.2	0.1	0.1	0.0
Emergency Generator	80.4	18.4	2.1	8.1	2.3	0.2		4.0	0.9	0.1	0.4	0.1	0.0
Fugitives—VOC from Piping			0.2							1.0
Ammonia Piping Fugitives							0.2							0.8
Total	130.3	53.7	16.4	35.5	18.5	1.0	11.6	47.7	90.9	33.4	5.5	44.7	2.2	38.4

The indirect long-term emissions associated with operation of the LNG terminal include emissions from LNG ships, tug assists, and from commuting and delivery vehicles. Estimated indirect emissions associated with operation of the LNG terminal are summarized in Table 4-3. The estimated emissions are based on an assumption of 200 calls per year by LNG carriers and correspond to the estimated emissions submitted by Golden Pass to the TXCEQ on August 9, 2004.

Table 4-3.—Estimated Indirect Emissions During LNG Terminal Operation

Source	Description	NOX	Total estimated emissions (tons/yr)
			CO	VOC	SO2	PM10
LNG Carriers	Main Propulsion Engines	332.8	32.6	11.1	414.3	5.8
LNG Carriers	On-board Electric Generators—Vessels Transiting	84.2	4.7	9.7	58.0	1.9
LNG Carriers	On-board Electric Generators—Vessels at the Slip	252.4	14.7	28.2	178.5	5.9
Tug Assists	Initial Tug Escort	24.3	1.9	0.2	18.0	0.6
Tug Assists	Tug Assist—Midpoint Channel	48.7	3.9	0.3	36.0	1.2
Tug Assists	Maneuvering/Docking	16.4	5.8	1.0	13.6	0.4
Motor Vehicles	Commuting and Deliveries	0.8	12.2	1.1	0.01	0.04
Total		759.6	75.8	51.6	718.4	15.8

The combined (direct plus indirect) emissions of NO_X would exceed 50 tpy during the construction and operational phases of the project. Therefore, a General Conformity Determination is required for NO_X emissions. Similarly, the combined emissions of VOCs exceed 50 tpy during the operational phases of the project, and a General Conformity Determination is also required for VOC emissions.

Preliminary General Conformity Determination

A General Conformity Determination must be completed for projects requiring Federal authorization that are undertaken in areas designated as “nonattainment” or “maintenance” for certain criteria air pollutants and for which the combined direct and indirect emissions of those air pollutants will equal or exceed certain thresholds. The EPA has designated the Beaumont-Port Arthur area as a serious nonattainment area for the 1-hour ozone standard. Consequently, a General Conformity Determination is required for certain projects undertaken in the Beaumont-Port Arthur area for which the combined direct and indirect emissions of either NO_X or VOCs, as ozone precursors, will equal or exceed 50 tpy. See 40 CFR 93.153(b) and 30 TAC § 101.30. The Project requires a General Conformity Determination for NO_X because the combined direct and indirect emissions of NO_X would equal or exceed 50 tpy. In addition, the Project requires a General Conformity Determination for VOC because the combined direct and indirect emissions of VOC would equal or exceed 50 tpy.

On September 24, 2004, the TXCEQ issued a conditional general conformity certification for the Project based on a review of project emissions estimates, modeling of the emissions from the Project, and a number of commitments proposed by Golden Pass (see Attachment A). These commitments include: (1) NO_X emission offsetting of terminal emissions, and (2) other impact mitigation practices. Each is described in the sections to follow.

NO_X Emission Offsetting

The Project may potentially result in NO_X emission reductions that are far greater then the NO_X emissions generated by the LNG terminal and associated sources (LNG trucks and ships). This emission reduction would occur when power plants and residential customers convert boilers and furnaces to higher-efficiency natural gas fired units. However, these NO_X emission reductions would not be enforceable reductions; therefore their impact on the Beaumont-Port Arthur SIP cannot be quantified or credited for purposes of the general conformity determination.

Golden Pass has committed to purchasing and retiring 48 tons of NO_X emission reduction credits prior to commencement of operations. The 48 tons of NO_X credits offset the maximum projected long-term emissions of NO_X from terminal operations (47.7 tpy). This commitment by Golden Pass is documented in the September 24, 2004 letter from TXCEQ.

Other Impact Mitigation Practices

TXCEQ's conditional conformity certification put forth additional conditions as requirements for a determination of acceptability of the project relative to the Beaumont-Port Arthur SIP. These additional conditions, which are also stated in the September 24, 2004 letter from TCEQ (see Attachment 1), are as follows:

• Golden Pass will encourage construction contractors to participate in the Texas Emission Reduction Plan (TERP) grant program and to apply for TERP grant funds;
• Golden Pass will establish bidding conditions to give preference to “Clean Contractors”;
• Golden Pass will direct, through provisions included in its construction contracts, construction contractors to exercise Best Management Practices relating to air quality; and
• Golden Pass will encourage construction contractors to use appropriate low emission fuels.

Conditions for Granting a Final Conformity Determination

The commitments by Golden Pass as described in sections 5.1 and 5.2 above constitute conditions for granting a final conformity determination. Documentation of fulfillment of each condition is required prior to issuance of the final conformity determination and authorization of project construction. Golden Pass may not begin construction of the LNG terminal until the Commission has issued its final General Conformity Determination and Golden Pass has received written approval by the Director of Office of Energy Projects of its filing stating that it would comply with all requirements of the General Conformity Determination.

Footnotes

1.  A loop is a segment of pipeline that isusually installed adjacent to an existing pipeline and connected to it at both ends).

2.  Currently, there are no formal agreements in place for interconnects between the Golden Pass pipeline system and other existing pipelines.