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					THE FACTS ABOUT LNG




Prepared for ~




Prepared by ~
                     Jeffrey P. Beale, President
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                   CH·IV International
Baltimore Office                                           Houston Office
1120C Benfield Boulevard                         1221 McKinney, Suite 3325
Millersville, MD 21108                                 Houston, TX 77010
410-729-4255                                                 713-344-2500

              CH·IV International Document: RPT-06903-01

                           Issued June 9, 2006
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                                          Table of Contents

          Section                                                                   Page

          1    Introduction to LNG                                                    1

          2    History of Major LNG Incidents                                         1
               2.1   Cleveland, 1944                                                  1
               2.2   Skikda, 2004                                                     3

          3    Mechanics of Gas “Explosions”                                          4
               3.1   Introduction                                                     4
               3.2   Ignition of “LNG”                                                4
                     3.2.1    Vaporization of LNG                                     4
                     3.2.2    Vapor mixing with air                                   5
                     3.2.3    Ignition sources                                        6
                     3.2.4    Ignition of an LNG vapor cloud                          7
               3.3   Gas “Explosions”                                                 7

          4    Design and Construction of LNG Ships                                   8
               4.1   Ship Design and LNG Cargo System Types                           8
                     4.1.1    Self-Supporting Spherical:                              9
                     4.1.2    Self-Supporting Prismatic Shape:                       11
                     4.1.3    Membrane:                                              13
               4.2   Double-Hull Integrity                                           15
                     4.2.1    El Paso Paul Kayser Grounding                          15
                     4.2.2    Collision of the Yuyo Maru No. 10                      16
                     4.2.3    Terrorist Attack on the Limburg Crude Oil Tanker       17




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                                          Table of Contents

          Section                                                Page
          5    Credible LNG Spill Scenarios                       18
               5.1   Introduction                                 18
               5.2   LNG Ship Incidents                           19
                     5.2.1    “Worse Case” Fire                   19
                     5.2.2    “Worse Case” Vapor Travel           20
                     5.2.3    Credible Incidents                  21

          6    Rebuttal of “The Risks and Danger of LNG”          22

          APPENDIX A: SANDIA REPORT                               50

          APPENDIX B: CABRILLO PORT                               52

          ABOUT THE AUTHOR                                        53




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      1    INTRODUCTION TO LNG

            Development of liquefied natural gas, or LNG, has emerged as one of the most contentious
            energy infrastructure issues in recent years. There are several reasonable explanations for
            the attention such projects have drawn:
              • The regulatory process has encouraged, and sometimes required, public participation.
              • The projects are generally of significant size; a project cost of $500 million is not
                  unusual. It is difficult to ignore projects of such magnitude.
              • Hyperbole and sometimes outright lies are common tactics used by the opponents of
                  such projects in an effort to stop their development.

            This paper focuses on the third point. Once rumors, innuendoes or lies start to spread it is
            difficult to bring the public back to the truth.

            California injury attorney Tim Riley and his wife, Hayden, have produced a video entitled
            “The Risks and Dangers of LNG.” The Rileys make numerous statements about LNG that
            deserve to be checked against the facts. However, prior to presenting a point-by-point
            technical review of the Riley’s information presented in the video we have chosen to first
            provide factual background that can be referenced during the various Riley statement
            checks. We will cover the following major topics before addressing the Riley video:
              • History of Major LNG incidents
              • Mechanics of Gas “Explosions”
              • Design and Construction of LNG Ships
              • Credible LNG Spill Scenarios


      2    HISTORY OF MAJOR LNG INCIDENTS

            2.1     Cleveland, 1944

                    Any time the topic of LNG is introduced to a new audience the “Cleveland
                    Disaster” is bound to surface. It was indeed tragic, but an unbiased review will
                    show just how far the LNG industry has come from that horrific incident. The East
                    Ohio Gas Company built the world’s first “commercial” LNG peakshaving1 facility


      1
          An LNG peakshaving facility liquefies natural gas during the low gas demand times of the year and stores the
          LNG. When natural gas is at or near it ‘peak” demand, the LNG is pumped to a given pressure, vaporized and
          injected into the natural gas distribution system.


      RPT-06903-01                                        Page 1                                            June 2006
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                     in Cleveland in 1941. Three small spherical LNG storage tanks were constructed as
                     part of the original facility. Each was surrounded by cork insulation and a mild steel
                     outer shell and supported by uninsulated mild steel legs. The facility adjoined a
                     residential neighborhood.

                     The facility was run without incident until 1944, when a larger new tank was added.
                     As stainless steel alloys were scarce because of shortages resulting from World War
                     II, the new tank was built using a toro-segmented design using low-nickel content
                     (3.5%) alloy steel. Shortly after going into service, the tank failed. LNG spilled into
                     the street and storm sewer system. The resultant fire killed 128 people, setting back
                     the embryonic LNG industry substantially.

                     The following information is extracted from the U.S. Bureau of Mines report2 on the
                     incident:

                        On October 20, 1944, the tanks had been filled to capacity in readiness for the coming
                        winter months. About 2:15 PM, the cylindrical tank suddenly failed releasing all of its
                        contents into the nearby streets and sewers of Cleveland. The cloud promptly ignited and
                        a fire ensued which engulfed the nearby tanks, residences and commercial
                        establishments. After about 20 minutes, when the initial fire had nearly died down, the
                        sphere nearest to the cylindrical tank toppled over and released its contents. 9,400
                        gallons of LNG immediately evaporated and ignited. In all, 128 people were killed and
                        225 injured. The area directly involved was about three-quarters of a square mile (475
                        acres) of which an area of about 30 acres was completely devastated.

                        The Bureau of Mines investigation showed that the accident was due to the low
                        temperature embrittlement of the inner shell of the cylindrical tank. The inner tank was
                        made of 3.5% nickel steel, a material now known to be susceptible to brittle fracture at
                        LNG storage temperature (-260°F). In addition, the tanks were located close to a heavily
                        traveled railroad station and a bombshell stamping plant. Excessive vibration from the
                        railroad engines and stamping presses probably accelerated crack propagation in the inner
                        shell. Once the inner shell ruptured, the outer carbon steel wall would have easily
                        fractured upon contact with LNG. The accident was aggravated by the absence of
                        adequate diking around the tanks, and the proximity of the facility to the residential area.
                        The cause of the second release from the spherical tank was the fact that the legs of the
                        sphere were not insulated against fire so that they eventually buckled after being exposed
                        to direct flame contact.

                        Further, it should be noted that the ignition of the two unconfined vapor clouds of LNG
                        in Cleveland did not result in explosions. There was no evidence of any explosion
                        overpressures after the ignition of the spill from either the cylindrical tank or the sphere.
                        This can be further seen by the fact that two of the original LNG tanks remained intact
                        despite the nearby fires. The only explosions that took place in Cleveland were limited to

      2
          “Report on the Investigation of the Fire at the Liquefaction, Storage, and Regasification Plant of the East Ohio
          Gas Co., Cleveland, Ohio, October 20, 1944,” U.S. Bureau of Mines, February, 1946.


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                       the sewers where LNG ran and vaporized before the vapor-air mixture ignited in a
                       relatively confined volume. The U.S. Bureau of Mines, concluded that the concept of
                       liquefying and storing LNG was valid if “proper precautions are observed.”

                    According to a recent study3 by the National Association of State Fire Marshals,
                    “Had the Cleveland tank been built to current codes, this accident would not have
                    happened. In fact, LNG tanks properly constructed of 9 percent nickel steel have
                    never had a brittle crack failure in their 35-year history.”

            2.2     Skikda, 2004

                    On January 19, 2004, a leak in the hydrocarbon refrigerant system at one of the
                    natural gas liquefaction units (Train 40)4 in Skikda, Algeria formed a vapor cloud
                    that was ingested into the inlet of the combustion fan of a steam boiler. The
                    hydrocarbon acted as increased fuel to the boiler causing a rapidly rising pressure
                    within the steam generating equipment. The rapidly rising pressure quickly
                    exceeded the capacity of the boiler’s safety valve and the steam drum ruptured,
                    tearing apart the boiler fire box and housing. The flames from boiler firebox ignited
                    the leaked refrigerant gas, which was confined by the equipment and structures in
                    the area producing an explosion and an ensuing fire. The explosion, along with the
                    shrapnel from the ruptured steam drum, caused further damage to the process piping
                    and pressure vessels in the immediate area leading to additional flammable fluid
                    release. The fire took eight hours to extinguish. The explosions and fire destroyed a
                    portion of the LNG plant and caused 27 deaths and injury to 72 more. No one
                    outside the plant was injured nor were the LNG storage tanks damaged by the
                    hydrocarbon explosions. A joint report5 issued by the U.S. Federal Energy
                    Regulatory Commission (FERC) and the U.S. Department of Energy (DOE) was
                    issued in April 2004. The findings in the report indicate that:
                     • There were ignition sources in the process area,
                     • There was a lack of “typical” automatic equipment shutdown devices required by
                        U.S LNG design codes, and
                     • There was a lack of hazard detection devices.

                    While Trains 10, 20 and 30 had been upgraded in the late 1990s, Train 40, was, in
                    fact, scheduled for demolition. Train 40 was originally built in 1981 and not well
                    maintained. The poor maintenance and poor general condition of Train 40 is the

      3
           Report entitled “Liquefied Natural Gas: An Overview of the LNG Industry for Fire Marshals and Emergency
          Responders,” May 2005.
      4
          LNG production units are referred to as “trains.”
      5
          “Report of the U.S. Government Team Site Inspection of the Sonatrach Skikda LNG Pant in Skikda, Algeria,
          March 12-16, 2004”


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                 most likely reason why Sonatrach, the owner of the facility, had it scheduled for
                 demolition.

                 It is also worth noting that a liquefaction facility has very few similarities to LNG
                 import terminals. The only similarities are that both facilities have marine LNG
                 transfer facilities and LNG storage tanks. The components of a liquefaction plant
                 are mostly involved with the purification and cooling of natural gas, whereas an
                 import terminal is basically a pumping and heating system that converts low
                 pressure LNG into pipeline natural gas.

                 While it must be noted that the Sparrows Pont facility will likely utilize gas-fired
                 process heaters or a steam boiler as part of its vaporization system, all such
                 equipment will incorporate combustion air blowers. Gas detectors will be installed
                 in the inlet to these blowers and shut down the blowers in the event of gas detection.
                 If this simple installation (required by code in the U.S.) had been installed at the
                 Skikda plant the incident would not have occurred and no deaths or injuries would
                 have resulted.


      3   MECHANICS OF GAS “EXPLOSIONS”

          3.1    Introduction

                 The composition of LNG varies depending on the gas source and type of processing.
                 LNG typically contains 85 to 99% methane (CH4). It also may contain ethane
                 (C2H6), propane (C3H8), some butane (C4H10) and trace amounts of heavier
                 hydrocarbons. Inert nitrogen (N2) is often present, as well.

          3.2    Ignition of “LNG”

                 In order to be ignited, LNG must first be vaporized (be heated and returned to a
                 vapor state), mixed with between 5% to 15% air and come in contact with an
                 ignition source. Looking at each of these criteria:

                 3.2.1     Vaporization of LNG

                           LNG will vaporize when its temperature rises above -260°F at
                           atmospheric pressure. In an LNG terminal the vaporization of LNG is
                           performed under controlled conditions within a process system. Through
                           a number of different techniques, LNG is pumped from the LNG tanks to




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                               a higher pressure and directed to the LNG vaporizer system.6 Heat is
                               indirectly applied to the LNG converting it to “pipeline” natural gas,
                               meaning it can be sent directly to the natural gas distribution system to
                               end-users.

                               Elsewhere in the LNG terminal, a small amount of LNG vaporization is
                               taking place within the LNG tanks as a small amount of heat enters the
                               highly insulated LNG tank causing some of the LNG to “boil” releasing
                               “boil off gas.” Boil off gas is simply another mixture of natural gas that
                               can be compressed and mixed with the pipeline gas or used as fuel within
                               the LNG facility.

                               Were LNG to be released onto the ground, the heat from the earth would
                               initially cause very rapid boiling of the LNG. As the ground cools the
                               boiling rate would reduce. The amount of vapor formed is in direct
                               proportion to the amount of LNG released; however, the vapor formation
                               rate is a function of the release rate and surface covered in the release.
                               The cold vapor will condense most of the water (humidity) in the
                               surrounding air forming a white vapor cloud. If unhindered, the cloud will
                               drift in the direction of the wind, further mixing with the air and picking
                               up heat from both the ground and the air as it moves. As the vapor cloud
                               warms up, it will become buoyant (lighter than air) and rise into the
                               atmosphere where it will disperse. Any terrain, obstructions, trees, etc.
                               will enhance the mixing rate of the vapor and warm air resulting in more
                               rapid dispersion.

                               LNG released on water acts very similarly to the initial release on land.
                               Assuming a large volume of water, the vapor formation rate will remain
                               high as the surface water that is cooled by the LNG sinks and is replaced
                               by warmer water.

                    3.2.2      Vapor mixing with air

                               As mentioned above, natural gas must be mixed with 85% to 95% air in
                               order to ignite. Figure 3.2.2 depicts the mixing of gas and air from an
                               LNG release. Clearly at the point of the release, there is no mixing as the
                               vapor is boiling off directly from the LNG and is, thus, 100% gas. As the
                               gas warms, rises and is moved by the wind, mixing with air takes place.
                               At the innermost part of the cloud the gas composition is well over 15%,


      6
          LNG is stored in the LNG tanks very near atmospheric pressure. Low pressure, in-tank LNG pumps direct the
          LNG through sealed piping in the roof of the LNG tank to the high pressure “LNG sendout” pumps. The high
          pressure pumps feed the LNG vaporization system.


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                         thus not ignitable. Similarly on the outermost fringe, there is too little gas
                         and it will not ignite. The red lines depict the area where the gas
                         composition is within the 5% to 15% range. If an ignition source is
                         present in this area, the gas will ignite.




                                        Figure 3.2.2: Mechanics of LNG Vapor and Air Mixing

                         At very low wind velocities, the LNG vapor cloud will not move very far,
                         as there is no driving force. At high wind velocities, the heat from the
                         wind (air) as well as the turbulent mixing of the wind will rapidly
                         dissipate the vapor making its travel relatively short. Ideal wind speed for
                         maximum vapor cloud travel is about 4 miles an hour. At this wind speed
                         there is minimal mixing of air while the vapor cloud travels; however, the
                         velocity is only 4 miles per hour meaning that the cloud will not travel
                         very far, vary fast.

                 3.2.3   Ignition sources

                         While, in comparison to some other fuels, natural gas has a slightly wider
                         combustibility region (5% to 15%), it has a higher ignition temperature
                         when compared to those same fuels. Clearly, the fuel with the lowest
                         ignition temperature has the highest potential for finding an ignition
                         source. For example, unleaded gasoline has an ignition temperature
                         around 500°F, whereas jet fuel is a little over 400°F. Propane and butane,
                         depending on their mixture, have an ignition temperature between 900 and
                         1100°F, whereas natural gas has an ignition temperature between 1100


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                                and 1200°F. As such, open flames and sparks can ignite natural gas;
                                however, a held cigarette or car muffler will not.

                                It is important to note that the combustibility regions for other fuels have a
                                lower flammability limit (LFL) that natural gas or LNG vapor. For
                                example, gasoline has an LFL of only 1.4% and propane is 2.1%, meaning
                                that both can be ignited with significantly lower concentrations in air than
                                natural gas, (which has an LFL of 5%).

                    3.2.4       Ignition of an LNG vapor cloud

                                Referring back to Figure 3.2.2, it can also be seen that only the outer area
                                of the vapor cloud is ignitable. There will not be an explosion should the
                                gas be ignited as the flame front on the burning methane in an open
                                environment has a very slow flame speed (~ 4 mph). This is an extremely
                                important point that is not disputed by knowledgeable individuals that
                                have direct experience in the ignition of LNG vapor clouds.7

                                Once ignited, the thermal radiation (heat) from the burning vapor
                                generated from a pool of LNG is related to the size of the LNG pool.
                                However, the larger the fire, the more difficult it becomes for adequate air
                                to mix with the vaporizing gas for complete combustion. As a result, the
                                fire associated with a small LNG pool burns very cleanly and consistently
                                with a near yellow-orange flame (Figure 3.2.4-1), while a fire associated
                                with a large pool burns orange-red with large black patches (Figure 3.2.4-
                                2) reflecting the incomplete combustion and resulting in variable thermal
                                radiation.

            3.3     Gas “Explosions”

                    In order for the ignition of an LNG vapor cloud to result in an explosion, the gas
                    must first be uniformly mixed with air in the 5% to 15% range, confined in an
                    enclosed space, and then ignited. Should any one of these requirements be missing,
                    there will be no explosion.
                     • Too rich or too lean gas, confined, cannot be ignited and certainly . . . no
                         explosion.
                     • 5% to 15% gas mixed and confined, but no ignition source . . . no explosion.


      7
          The author of this document has witnessed ignitions of LNG vapor clouds on various occasions at LNG fire
          training schools. There were no explosions. In fact, the rate at which the flame front burned back to LNG pool
          could easily be followed with the naked eye. The Riley video confirms this observation with footage of such
          ignition and the voiceover that refers to the “lazy diffusion flame.”


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                     • 5% to 15% gas mixed in open atmosphere, i.e., not confined, ignition results in a
                       “slow” burnback to the source of the LNG spill . . . no explosion.

                   Should gas be mixed in the 5% to 15% range with air, confined in an enclosed space,
                   and ignited, then an explosion can occur. However one must ask one’s self, where
                   in an LNG terminal could such conditions exist? The answer, basically, is nowhere.




          Figure 3.2.4-1: Fire above a Small LNG Pool            Figure 3.2.4-2: Fire above a Large LNG Pool


      4   DESIGN AND CONSTRUCTION OF LNG SHIPS

          The discussion that follows is intended to give the reader a fuller understanding of the
          design of the LNG tanker and how extremely difficult it would be to cause a huge release of
          LNG. Further we hope to demonstrate how it would be virtually impossible to cause a large
          breach one or more ship LNG tanks without ignition of the first gas released.

          4.1      Ship Design and LNG Cargo System Types

                   There are three basic types of LNG cargo tank designs. It is important to understand
                   the similarities and differences of these types of tanks in order to establish which
                   type of cargo tank might result in the greatest volume of LNG spillage in the least
                   time. The three cargo tank types are: 1) Self-Supporting Spherical; 2) Self-
                   Supporting Prismatic Shape; and 3) Membrane.



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                 For all cargo tank types, penetrating one or more LNG cargo tanks requires, at
                 minimum, the penetration of:
                     • The ship’s outer hull,
                     • The 8 to 10 foot space between the outer and inner hulls (the water ballast tanks),
                     • The inner hull,
                     • The insulation system around the LNG cargo tank(s),
                     • The secondary containment of the individual LNG cargo tank,
                     • The insulation system around the primary containment, and
                     • The primary containment vessel wall of the individual LNG cargo tank(s).

                 Figure 4.1 provides a sketch representing the bullet points listed above for a
                 “membrane-type” ship (See Section 4.1.3).




                                           Figure 4.1 LNG Ship LNG Tank Cross-Section

                 4.1.1        Self-Supporting Spherical

                              Figure 4.1.1-1 shows a typical Self-Supporting Spherical LNG carrier.
                              These ships are immediately recognized by the four or five hemispherical
                              domes located above the ship’s deck. Figure 4.1.1-2 depicts the general
                              arrangement of the ship in Figure 4.1.1-1. Figure 4.1.1-3 provides
                              additional detail on the design and construction of the individual spherical
                              cargo tanks. The aluminum or steel alloy tanks rest on a cylindrical skirt.
                              Scale can be estimated based on a beam of approximately 150 feet. Note

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                       in Figure 4.1.1-2 the draft line relative to the equatorial ring of the LNG
                       cargo tanks. As the draft line is well below the elevation of the equatorial
                       ring, impacts at the water line must travel a great distance to impact the
                       LNG cargo tank. As can be seen in Figure 4.1.1-3, the support skirt of
                       high tensile steel provides additional protection to the lower section of the
                       LNG cargo tank from any external penetration, whether accidental or
                       intentional.




                                Figure 4.1.1-1: Self-Supporting Spherical LNG Carrier




                     Figure 4.1.1-2 General Arrangement - Self-Supporting Spherical LNG Carrier




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                                        Figure 4.1.1-3: Spherical Tank Detail

                 4.1.2   Self-Supporting Prismatic Shape

                         The Self-Supporting Prismatic Shape LNG cargo tanks conform more
                         closely to the shape of the ship’s hull than do the spherical LNG cargo
                         tank designs. The decks of the ships are typically flat looking far more
                         like a conventional crude oil carrier as noted in Figure 4.1.2-1. Figure
                         4.1.2-2 shows the general arrangement. Typically there will be three or
                         four major cargo tanks with a smaller tank near the bow of the ship. The
                         tanks are built external to the ship and then crane lifted into place. Figure
                         4.1.2-3 shows how the tanks have a significant amount of horizontal and
                         vertical stiffeners and bulkheads that greatly add to the strength of each
                         individual cargo tank.




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                                Figure 4.1.2-1: Self-Supporting Prismatic Shape LNG Carrier




                     Figure 4.1.2-2: General Arrangement - Self-Supporting Prismatic Shape LNG Carrier




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                         Figure 4.1.2-3: Self-Supporting Prismatic Shape Tank Detail

                 4.1.3   Membrane

                         The membrane type LNG carrier is double-hulled where the inner hull
                         provides the integrated support of the LNG cargo tanks. The outer hull is
                         smooth externally but the inside contains an egg-crate type of structural
                         steel webs and stiffeners. The inner hull is supported by a similar egg-
                         crate design. The typical cargo tank has a number of levels of protection
                         around the cargo:
                                                              ®
                          • A welded stainless steel or Invar membrane surrounds the cargo,
                          • 10 inches of insulation
                          • A second alloy metal or foil composite membrane
                          • A foot of insulation around the second membrane
                          • An inch-thick plate forms the inner hull
                          • An eight-foot ballast tank between the inner and outer hull
                          • The inch-thick steel outer hull

                         Figure 4.1.3-1 provides a picture of a typical membrane ship. Membrane
                         ships often have a beveled, raised structure above the cargo tanks. Figure
                         4.1.3-2 shows the general arrangement, which is not significantly different
                         from the Self-Supporting Prismatic Shape LNG Carrier in basic

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                     appearance. Figure 4.1.3-3 shows the detailed cutaway of the cargo
                     containment system and how the cargo tank is integrated into the inner
                     (“double”) hull.




                                    Figure 4.1.3-1: Membrane LNG Carrier




                            Figure 4.1.3-2: General Arrangement - Membrane LNG Carrier



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                                          Figure 4.1.3-3: Membrane Tank Detail

          4.2    Double-Hull Integrity

                 The double hull design of LNG ships offers significant protection to the LNG cargo
                 tanks. The following incidents fully substantiate this assertion:

                 4.2.1    El Paso Paul Kayser Grounding

                          In 1979, the El Paso Paul Kayser, loaded with about 125,000 cubic meters
                          of LNG, was steaming out of the Mediterranean Sea from an Algerian
                          port. It was traveling at approximately 19 Knots off the coast of Gibraltar
                          when it struck a rock outcropping below surface and gouged a 750-foot
                          long scar in its hull (See Figure 4.2.1). What is important to note about
                          the El Paso Paul Kayser incident is that a loaded LNG ship traveling near
                          its maximum speed grounded and there was nothing close to a loss of
                          cargo, much less a breach of an LNG tank. The grounding did not even
                          penetrate the outer hull. Another ship was brought alongside; the cargo
                          was pumped out of the El Paso Paul Kayser into the second ship. The El
                          Paso Paul Kayser was righted and sent to the shipyard for repairs and
                          returned to service.




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                                      Figure 4.2.1: Hull of El Paso Paul Kayser after Grounding

                 4.2.2   Collision of the Yuyo Maru No. 10

                         The Yuyo Maru No. 10 was a liquid petroleum gas (LPG) tanker of very
                         similar design and construction to an LNG tanker. Due to the similarity in
                         construction, this incident is included to help illustrate the integrity of
                         LNG tanks onboard LNG ships. The information below was obtained
                         from a Japanese marine registry record [bracketed comments have been
                         added for clarification].
                            The Motorship “Yuyo Maru No. 10” (gross tonnage of 43,723), laden with
                            20,831 MT of light naphtha, 20,202 MT of propane and 6,443 MT of butane,
                            left Ras Tanura, in the Kingdom of Saudi Arabia, for Kawasaki, and the port
                            of Keihin on October 22, 1974. While the vessel was sailing northward
                            along the Naka-no Se Traffic Route in Tokyo Bay on November 9, she
                            collided with the Motorship “Pacific Ares” (gross tonnage of 10,874),
                            manned with a Taiwanese Master and 28 crew members, laden with 14,835
                            MT of steel products, en route from Kisarazu for Los Angeles, USA. The
                            collision occurred about 13:37 hours on the same day slightly northward of
                            the boundary line of the Naka-no Se Traffic Route.
                            As a result of the collision, the “Yuyo Maru No. 10” suffered a large hole at
                            the point of collision, with her cargo naphtha instantly igniting into flames.
                            The naphtha was carried in its outer ballast tank (between the insulated LPG
                            tanks and the hull of the ship). [This is effectively what makes up the
                            “double hull” with LNG ships.] The LPG cargo tank was not penetrated.
                            [LNG tankers never carry any thing other than air or ballast (water) in these
                            same tanks.] As a result of the outflow of naphtha overboard, the sea surface
                            on her starboard side literally turned into a sea of fire. The “Pacific Ares”
                            showered with fire burst into flames in the forecastle and on the bridge.


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                            While naphtha, not propane, explosions occurred one after another, attempts
                            were made to tow the “Yuyo Maru No 10”, outside the bay, but she ran
                            aground in the vicinity of Daini Kaiho.
                            She was eventually successfully towed out of Tokyo Bay and sunk south of
                            Nojima Saki on the afternoon of November 27, thirty-six days after the
                            original collision, by cannon, air bomb and torpedo attacks staged by the
                            Maritime Self-Defense Force.

                         Please note that repeated “cannon, air bomb and torpedo attacks” were
                         required to sink the ship. Reports indicate that these attacks lasted one
                         and a half days. The author has seen a black and white film of these
                         attacks. It appeared that the LPG tanks were for the most part fully intact
                         prior to the attacks. The ship’s LPG vent stacks were melted down to just
                         above the decks and on fire indicating that LPG remained within the
                         storage tanks.

                 4.2.3   Terrorist Attack on the Limburg Crude Oil Tanker

                         The Limburg is a double-hulled crude oil ship, meaning that its cargo tank
                         is the inner hull (unlike LNG ships, which have at least one additional
                         cargo containment barrier and substantial insulation and structural
                         systems). On October 6, 2002, the Limburg was attacked by a small boat
                         carrying an unknown amount of explosives. The Limburg offers insight
                         into a terrorist attack on a double-hulled ship. The terrorist attack on the
                         Limburg left the equivalent of a 25 foot diameter hole in the outer hull but
                         a series of much smaller holes in the inner hull equivalent to a hole about
                         3 feet in diameter. Figure 4.2.3-1 shows the damage in the side of the
                         Limburg. Figure 4.2.3-1 shows a close-up of the damage to the inner hull;
                         note the small holes in the inner hull.

                         Ironically, the Limburg attack has been used by some to discredit the
                         worthiness of double-hulled ships, when in actuality the Limburg lost only
                         4% of its cargo capacity. If one relates the damage to the Limburg to the
                         additional structure and separation distances inherent with construction of
                         LNG tankers, it is quite reasonable to expect that had the terrorist attacked
                         an LNG ship, there would not have been any loss of cargo.




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          Figure 4.2.3-1: Damage to Hull of Limburg        Figure 4.2.3-2: Close-Up of Hole in Hull of Limburg

                                It should be self evident that in order to penetrate the outer hull, the inner
                                hull, and multiple LNG tanks/barriers/insulation, a tremendous amount of
                                energy will be required. It should, thus, also be obvious that such energy
                                would also ignite the vapor escaping from the breach of any LNG ship
                                tank.


      5    CREDIBLE LNG SPILL SCENARIOS

           5.1      Introduction

                    In the previous two sections the mechanics of gas explosions and the design and
                    construction of LNG ships were discussed. This section will lay out why
                    consequences from credible LNG spills will remain in the immediate vicinity of the
                    LNG tanker.




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                 Clear physical facts to take from the preceding sections are that:
                     1) LNG spills do not explode.
                     2) Unconfined natural gas (or revaporized LNG) does not explode.
                     3) Piercing/breaching an LNG ship tank(s) is extremely difficult
                     4) Other than a very small release of LNG from an incident or terrorist act on an
                        LNG ship, any large penetration of an LNG ship tank(s) will result in a near
                        immediate ignition of the first vapor released and a fire in the immediate
                        vicinity of the ship.

          5.2    LNG Ship Incidents

                 5.2.1        “Worse Case” Fire

                              Without regard to any probability or assurance of success, assume that
                              terrorists target an LNG ship. Maybe the terrorist use a small boat laden
                              with explosives; maybe they use an airplane loaded with explosives;
                              maybe they use a car directed (somehow) over the guard rail on a bridge
                              as the LNG ship travels under it. In any of these highly improbably events
                              the impact is virtually the same.
                               • Any “explosion” will be wholly tied to the amount of explosives
                                 involved.
                               • Assuming the explosion results in breaching one or more LNG tanks
                                 on the ship, the first LNG vapor released will be ignited by the
                                 explosion.
                               • Any LNG spilling out of the tank will be rapidly vaporized by the heat
                                 of the water and the fire. A potentially large fire will exist in the
                                 immediate vicinity of the ship.
                               • Persons onboard the ship or supporting tugboats will be placed in
                                 substantial potential risk.
                               • Those persons outside the U.S. Coast Guard’s moving Safety and
                                 Security Zone would face minimal personal risk.
                               • If the ship is docked at the unloading facility, those persons outside the
                                 fixed safety zone around the LNG facility would face minimal
                                 personal risk.




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                    5.2.2       “Worse Case” Vapor Travel

                                Opponents of LNG have hypothesized that the release of LNG from an
                                LNG ship could result in vapor clouds thousands of feet to many miles in
                                length. None of these stories provide any substantive explanation of how
                                the LNG might come to be released in such huge quantities in the first
                                place, with no ignition source present. The author has a personal
                                experience8 with one such LNG opponent. Ex-MIT professor James Fay
                                has for three decades been providing opponents of LNG projects with
                                vapor travel calculations caused by massive LNG spills on water. Dr.
                                Fay’s calculations assume that a huge volume of LNG is very rapidly
                                “dumped” from an LNG ship on the water. Without ignition of the vapor
                                cloud, his calculations show the vapor traveling for miles. When I met Dr.
                                Fay, I asked him quite simply, “What is the mechanism that could release
                                all of that LNG without ignition from the cause of the release?” His
                                matter-of-fact answer: “I don’t know; I’m not a marine engineer [ship
                                designer].” Therein lies the fault in most of the horrific LNG spill/vapor
                                cloud travel scenarios: they totally ignore whether such a massive, rapid,
                                unignited discharge could possibly occur and instead focus on the possible
                                consequences of such a discharge. Reason would suggest that if the
                                probability of a massive, rapid, unignited discharge is non-existent, then
                                the potential consequence of such a discharge is irrelevant.

                                For LNG vapor travel to occur where the public is placed at risk, there
                                must first be a release of LNG significant enough to cause vapor to travel
                                considerable distances before it all warms up and rises into the atmosphere
                                and dissipates. Next, there must be no initiating cause of the LNG release
                                that also resulted in igniting the vapor such as explosives or impact from
                                another vessel. This eliminates virtually all high energy impacts with the
                                ship as the vapor would be ignited. Thus, the only way to release
                                significant quantities of LNG from the ship without ignition would be
                                through the pumping of the LNG out of the LNG tanks onboard the ship in
                                transit to or at the LNG terminal. In order for this to occur we must
                                assume that terrorists are onboard the ship, are in control of the ship and
                                have knowledge of and access to the LNG pumping and piping systems
                                and the overrides of the ship’s LNG control systems.

                                While Transiting Chesapeake Bay:
                                    Without disclosing U.S. Coast Guard safety and security (as well as
                                    operating) protocols onboard an LNG ship transiting the Chesapeake Bay,
                                    the suggestion that a transiting LNG ship could begin offload of the cargo

      8
          Personal conversation with Dr. Fay, December 10, 2003, Boston, Massachusetts.


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                                    tanks is not credible. For the sake of discussion, however, it is assumed that
                                    terrorists highly trained in the navigation and cargo operations (including the
                                    bypassing of all of the various safeguards) of LNG ships have successfully
                                    begun to pump LNG over the side of a moving LNG ship, thus generating a
                                    vapor cloud. Clearly, the escorting Coast Guard personnel in nearby boats
                                    have to be oblivious to any unusual activity prior to the LNG being released
                                    over the side of the ship. Upon seeing the vapor cloud the Coast Guard will
                                    quickly realize that they are dealing with an intentional spill. At this point,
                                    the Coast Guard’s protocols will certainly call for intentionally igniting the
                                    moving vapor cloud if it should threaten to head in a direction that could
                                    harm human beings before it warms up and rises up into the atmosphere. In
                                    such situation, the ensuing fire would only engulf the area where the LNG is
                                    being pumped. Any persons outside the U.S. Coast Guard’s moving Safety
                                    and Security Zone would face minimal personal risk.
                                    The fire, itself, would remain in the immediate vicinity of the ship as the
                                    LNG release, although at a fairly high rate, would be rapidly vaporized by
                                    the heat of the water and the surrounding fire and quickly consumed by the
                                    fire.

                                At the LNG Terminal:

                                    The scenario is very similar to the previous discussion. Again, ignoring
                                    Coast Guard safety and security protocols as well as terminal-ship operating
                                    protocols, it is assumed that terrorist have successfully begun to pump LNG
                                    over the side of an LNG ship at the dock. Unlike the vapor cloud scenarios
                                    promoted by opponents of LNG projects, the LNG cannot be instantaneously
                                    unloaded. A typical LNG ship takes 12 to 24 hours to unload. In order to
                                    unload 9% of the cargo9 it would take over an hour, substantially longer than
                                    an assumed instantaneous release. Thus, the unignited vapor cloud travel
                                    would be significantly shorter than the distances published elsewhere. As
                                    with the shipboard release described above, intentional ignition of the vapor
                                    cloud would be required of the standby vessels that patrol the vicinity of the
                                    moored LNG ship and/or shoreside personnel. Once ignited, the gas cloud
                                    would burn back at about 4 miles to hour to the source of the spill.

                    5.2.3       Credible Incidents

                                “Credible” LNG spill incidents will be the subject of the risk analyses
                                performed during the design of the LNG terminal and review of waterway
                                suitability assessments. The terminal will be designed and operated such
                                that persons not involved in the operation of the LNG terminal or LNG
                                ship that are outside the various safety and exclusion zones will not be at
                                risk for these credible incidents.


      9
          Based on a discussion in “Brittle Power,” 1982 by Amory B. Lovins and L. Hunter Lovins.


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      6   REBUTTAL OF “THE RISKS AND DANGER OF LNG”

          Personal injury attorney Timothy Clifford Riley lives in Oxnard Shores near the coast of the
          Pacific Ocean in Ventura County. In 2001 a development company named Crystal Energy
          envisioned converting an idle oil production platform 11½ miles off the California Coast to
          be able to offload liquefied natural gas (LNG) carriers, vaporize the LNG back to its
          gaseous state and pipe the gas ashore to an energy craving California.

          Shortly after the plan was made public, Mr. Riley began circulating misinformation about
          LNG. This “campaign” led to expanding his legal web site to include his perception of the
          risks of locating the LNG facility (Crystal Clearwater Port) 11½ miles from his coastal
          home. A second offshore LNG project (BHP Billiton’s Caprillo Port) was then announced.
          Mr. Riley began adding to his web site any information he could convey as negative about
          LNG. At one point (February 2004) his web site was a 158 page long stream of
          consciousness pertaining his interpretation of the perils of LNG.

          In early 2004, CH·IV International provided Crystal Energy a “fact check” of the 158 page
          long web site. This information was used in a public meeting presentation to the residents
          of Oxnard. The fact check debunked virtually all of Mr. Riley’s claims about the hazards of
          LNG. Mr. Riley was present and offered no objection to the facts presented by Crystal
          Energy other than he felt Crystal Energy was impugning him as a lawyer (no lawsuit
          followed).

          Mr. Riley proceeded to produce “The Risks and Danger of LNG” later in 2004 without
          correcting any of the misinformation discredited in the public meeting.

          The author has reviewed the video and has categorized the information as presented as one
          or more of the following:
             Technique 1 - Information presented provides only partial information on a given topic.
             Technique 2 - Information presented quotes an incorrect or discredited news story.
             Technique 3 - Information presented quotes individuals not qualified to make statements
                           on which they are quoted.
             Technique 4 - Information presented uses information taken out of context from a
                           reputable source.
             Technique 5 - Information presented uses information that is out date, but presenting it as
                           though it is current.
             Technique 6 - Information presented uses non-standard references to exaggerate a point.
             Technique 7 - Information presented is simply an incorrect statement.




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          One must remember that Mr. Riley is an attorney-at-law and probably a pretty good one.
          He was extremely careful throughout the video to protect himself from legal entrapments.
          One need only read his “Notices,” “Terms and Conditions” and “Disclaimer” at the bottom
          of the first page of his web site [http://www.timrileylaw.com] to understand that he is very
          careful in his use of words.

          The author has selected 45 of the most glaring incorrect statements or interpretations
          presented in the 47-minute video produced by Mr. Riley. The author chose not to point out
          the numerous uses of incorrect and provocative terms such as “explosive,” “dangerous” or
          simply the emphasis placed on one word or another by the narrators. Each instance is
          numbered, followed by the time on the tape where the comment occurred along with a
          restatement of what Mr. Riley stated. The last column provides the rebuttal of the comment
          along with a reference to the technique Mr. Riley used in providing his misinformation.




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      Item   Video   Topic/
       No.   Time    Quote                                     Refutation

        1.   02:15   “Cleveland,” Attorney Riley suggests      See Section 2.1. Further, in 1944 there were no LNG design standards. For that matter
                     that the horrible incident in Cleveland   there were no jet planes; no computers; no TV; no microwaves; no video camera, no
                     in 1944 somehow has relevance to          CD, cassette, 8-track, 45 rpm, or even 331/3 records. World War II was ongoing and
                     today’s LNG facilities.                   there were only 48 states. Consider the changes in cars alone:




                                                               Other than the empathy we can all share with such a horrific event, 1944 Cleveland has
                                                               no relevance to the design, construction, operation and safety of LNG facilities today.

                                                               Riley Technique 5




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      Item   Video   Topic/
       No.   Time    Quote                                     Refutation

        2.   04:00   Skikda, Algeria.                          1) See Section 2.2.
                                                                   Riley Technique 1
                     1) Attorney Riley claims that Skikda is
                        an LNG facility similar to LNG
                                                               2) We have been unable to find any report that there was any damage to an apartment
                        import facilities in the United
                                                                  complex, much less “engulfing it in flames.” There were reported cracked windows
                        States.
                                                                  in nearby buildings and not “remote” as suggested in the tape or in the video.
                     2) He further claims that the Skikda          Riley Technique 2
                        incident blew out windows of a
                        distant      apartment    complex      3) Skikda Train 40 is where the incident occurred. Train 40 was in fact scheduled for
                        engulfing it in flames.                   demolition. It was trains 10, 20, and 30 that were repaired by a company then
                                                                  called Kellogg (now KBR), which Halliburton purchased after most of the upgrade
                     3) Attorney Riley also states that           work was completed. We can only surmise that the introduction of “Halliburton” was
                        Halliburton updated the facility in       to draw on the current high negatives surrounding the name of Halliburton.
                        1999 based on an article in the
                        Mobile Register.                           Riley Technique 2

        3.   05:05   Attorney Riley claims that LNG could      4) U.S. companies cannot lawfully engage in commerce with the Country of Libya,
                     come to the United States from Libya.        particularly, with energy supplies like LNG.
                                                                   Riley Technique 7

        4.   05:15   Attorney Riley uses the term, “gallons    5) Natural gas is never measured in “gallon” units. Gallon is the unit of liquid measure.
                     of natural gas.”                             Natural gas is measured in “million standard cubic feet.” Clearly his use of gallons
                                                                  is to connote a very large number. Using this logic, 33 million gallons of water
                                                                  would equal 33 billion gallons of steam!
                                                                   Riley Technique 6




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      Item   Video   Topic/
       No.   Time    Quote                                      Refutation

        5.   05:50   Attorney Riley shows the size of an        This point is, in fact, correct. It is clearly intended to show that LNG ships are extremely
                     LNG ship, comparing it to three football   large. By energy transport size, LNG ships are smaller than most. Comparing to other
                     fields long.                               ships:
                                                                  ULCC (crude oil) ships: ~1350 feet long
                                                                  VLCC (crude oil) ships: ~1140 feet long
                                                                  Aircraft carriers: ~1100 feet long
                                                                  Container Ships: ~1100 feet long

                                                                LNG ships are about the same size as cruise ships, for comparative purposes or 940 to
                                                                980 feet in length. LNG ships are smaller than many of the container ships that visit the
                                                                Port of Baltimore. For example, the Colombo Express, below, is 1088 feet long.




                                                                Riley Technique 6




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      Item   Video   Topic/
       No.   Time    Quote                                   Refutation

        6.   06:10   Attorney Riley states that 33 million   While is possible to compare the energy potential of different items in the same units, it
                     gallons of LNG is equivalent to 55      is entirely incorrect to assume that each item can release its energy at the same rate.
                     Hiroshima bombs.                        Turning this logic the other way, 33 million gallons of LNG can heat about 40,000
                                                             homes for one year; how many Hiroshima bombs would it take to heat 40,000 homes
                                                             for a year? The hazard potential depends not only on the amount of energy stored but
                                                             also the rate at which it can be released. Energy released when natural gas is burned
                                                             is relatively slow as will be noted later in Item 33, Rebuttal 5) below. On the other hand,
                                                             in an explosion such as from an atom bomb, the energy is released with such incredible
                                                             speed that it causes a shock wave that travels outward and causes severe damage to
                                                             anything in its path.

                                                             One way to think of this is to consider a coal mine that contains the same energy
                                                             potential as an LNG ship contains (a very modest amount of coal in the scheme of mine
                                                             sizes). Coal, like natural gas, releases its energy much more slowly than an atomic
                                                             bomb, yet the “energy potential” is there.

                                                             Riley Technique 6

        7.   06:20   It takes 5 miles to stop an LNG ship.   Actually, this is true for any large vessel moving in the ocean at cruising speed.
                                                             However, these cruising speeds do not occur anywhere near land, particularly,
                                                             approaching the LNG import facility. The fact that it takes 5 miles to stop a ship when it
                                                             is traversing the open ocean at cruising speed has absolutely nothing to do with a ship
                                                             arriving at a land-based port. A car can travel a 65 miles per hour on the highway, but
                                                             one does not pull into a driveway at that speed.

                                                             Riley Technique 1 and 4




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      Item   Video   Topic/
       No.   Time    Quote                                    Refutation

        8.   06:45   The comment is that the U.S. Coast       Any energy storage facility with the potential of what someone has defined as “worst-
                     Guard Captain of the Port of Savannah    case” might typically evacuate all personnel at some point in the evaluation of the
                     is suggesting that U.S. C.G. personnel   emergency. We find absolutely nothing unusual or surprising in such a statement.
                     should be evacuated in the event of a    What Attorney Riley fails to point out is the low credibility of the “worse-case” scenario
                     worst-case discharge of LNG. It is       and what actions the U.S.C.G would take in an emergency situation, including attempts
                     suggested that somehow this is           to remedy, rescue, etc. before evacuation is called for.
                     unusual.
                                                              Riley Technique 1

        9.   07:15   Attorney Riley mentions a number of      Addressing these one at a time.
                     things:
                                                              1) Mr. Riley makes it sound as though breaching a tank on an LNG ship is a simple
                     1) The breach of the LNG tank               matter. The breach of the tank is discussed at length in Section 4.2. As discussed
                                                                 there, the severity of a leak and any ensuing vapor cloud is very much a function of
                     2) The 5 to 15 percent gas and              how and where the tank is breached and breaching a tank is no simple matter.
                        oxygen, and
                                                                  Riley Technique 4
                     3) That the vapor cloud can ignite
                                                              2) Attorney Riley mentions 5 to 15 percent gas in oxygen. He has misstated the facts;
                        with a simple spark from a cell
                                                                 the correct statement is “5 to 15 percent gas in air.” Air is only 21% oxygen.
                        phone, spark plug, or dragging one
                        feet across the carpet.                   Riley Technique 7

                                                              3) We do not dispute the ignition sources mentioned, however, this, again, will come
                                                                 into play later and we will refer back.




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      Item   Video   Topic/
       No.   Time    Quote                                    Refutation

       10.   07:35   The discussion about Brittle Power and   First, one must understand Brittle Power was originally published in 1982. Although re-
                     the 9 percent spillage of LNG.           published in 2002, there is no indication or suggestion that in fact the book was updated
                                                              from its April 1982 discussions when LNG was a minor part of the discussion. The
                                                              Brittle Power report, although it mentions the 9 percent of a tanker load, it is completely
                                                              silent as to the mechanism whereby so much LNG could be spilled on the water without
                                                              immediate ignition. See Section 4.2. The quote from the study mentions that a plume
                                                              might extend at least 3 miles downwind on a large tanker spill within 10 to 20 minutes,
                                                              requiring wind velocities of 9 to 18 mph. There are no credible simulations today that
                                                              would indicate the wind velocities that high could result in a 3 mile vapor cloud. See
                                                              Section 3.2.2 on the effect of wind on vapor travel. The claims presented in Brittle
                                                              Power are discredited today. Similarly, the comment that an LNG fireball can blow
                                                              through a city creating a large number of ignitions and explosions across a wide area,
                                                              again, must be understood from the standpoint that LNG does not “blow through a city”
                                                              as suggested. Please note the flame spread shown in the video referenced in Item 33.
                                                              .




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      Item      Video     Topic/
       No.      Time      Quote                                        Refutation

       11.      09:00     The comment from the California              CH·IV has been unable to find any information on the original Oxnard study other than
                          Energy Commission, July 2003, the            the quote in the California Energy Commission (CEC) July 2003 White Paper, where the
                          extraction of the Oxnard City Council        full quote is
                          study shows up to 70,000 casualties
                          from an LNG accident.                            “Western (a company desiring to build an LNG import terminal) commissioned risk
                                                                           assessments for the Los Angeles and Oxnard sites. Both studies found extremely
                                                                           low safety risk, based on the probabilities of marine and onshore LNG accidents and
                                                                           bad weather conditions. The Oxnard City Council, however, did its own study, which
                                                                           considered safety risks under worst-case scenarios. Oxnard’s citizens opposed the
                                                                           project after the City’s study showed up to 70,000 casualties from an LNG accident
                                                                           there.”

                                                                       It must be understood that the CEC white paper was just that; it was presenting
                                                                       information that had previously been made available without comment or qualification.
                                                                       However, the CEC followed this study with their January 2005 study10 where they stated
                                                                       the new maritime security regulations and the general lack of marine experience among
                                                                       terrorists may reduce the potential for a terrorist attack on a U.S. LNG import terminal.
                                                                       “In the unlikely event that a missile or other vessel hit an LNG carrier, the conservative
                                                                       modeling conducted by Lloyd’s Register and DNV suggests that the exposure to
                                                                       harmful thermal radiation would be limited to distances near the carrier.” The report
                                                                       goes on with the important point, “The force required to penetrate the carrier’s liquid
                                                                       tight barriers would likely ignite LNG vapor clouds quickly.” The term here, “would likely
                                                                       ignite,” will lately be shown in almost every case mentioned later, “would ignite.”

                                                                       Riley Technique 1, 4 and 5




      10
           “International and National Efforts to Address the safety and Security Risks of Importing Liquefied natural Gas: A Compendium.”


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      Item   Video   Topic/
       No.   Time    Quote                                      Refutation

       12.   09:20   Attorney Riley continues on with the       See Section 5.2.2. Riley presents no scientific support for his hypothesis. In fact, there
                     supposition that a collision that would    is none. In any high energy impact with an LNG vessel that is sufficient to pierce the
                     somehow cause a near instantaneous         multiple layers needed to reach the cargo, the resulting vapor would certainly be ignited
                     release of the full contents of five LNG   immediately and therefore would not travel any significant distance from the ship. It is
                     tanks and then somehow not ignite the      even less credible that all five tanks of an LNG tanker could be simultaneously ruptured
                     vapor cloud and, thus, result in a 30-     and release all the cargo nearly instantly without any ignition source associated with the
                     mile vapor cloud.                          event.

                                                                Furthermore, winds greater than 4 miles per hour will tend to break up a vapor cloud
                                                                and dissipate it more rapidly into the atmosphere. For a vapor cloud to travel 30 miles
                                                                at 4 miles per hour, it would have to stay intact for seven and a half hours, and the
                                                                vapor in the cloud would have to fail to warm up to for seven and a half hours. No
                                                                scientific studies have ever come anywhere close to finding that such a scenario is even
                                                                remotely possible.

                                                                Riley Technique 5 and 7

       13.   10:50   Attorney Riley quotes an article from      This is one of the best examples of where Attorney Riley, whether he knows it or not is
                     the September 20, 2004 Norway Post         quoting incorrect information. The ship was not LNG, but an LPG ship. What is known
                     about an LNG ship adrift.                  is the story served his purpose of trying to suggest that an LNG ship heading towards
                                                                rocks might explode. The people quoted in the article who feared the ship would
                                                                explode were unfortunately extremely ignorant on the design of the LPG ship. One
                                                                should reference Section 4.2.1 above and see what really happens when an LNG ship
                                                                moving at cruising speed, not “drifting,” hits a submerged rock outcropping. It is
                                                                extremely irresponsible to suggest that an LNG ship would explode upon drifting into
                                                                rocks. One only has to understand the structure, the design of an LNG ship to
                                                                understand how fallacious such a suggestion is.

                                                                Riley Technique 2 and 3




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       14.   11:30   CNN News Story, November 2002,          Again, Attorney Riley is using a news story and hypes it as there was a real hazard risk
                     about a nuclear sub colliding with an   present. The Norman Lady was not empty. LNG ships never unload all of their cargo
                     “empty” LNG ship.                       unless going out of service. The news story suggests that had the ship been loaded it
                                                             would have been a much more dangerous situation. This is ridiculous as a submarine
                                                             periscope could, at best, only cause minor damage to the outer hull of an LNG ship.

                                                             The fact is that a sub and a ship did not actually collide, but the periscope was raised
                                                             into the hull of the ship. Yes, there was an LNG ship involved, but no there was no risk,
                                                             no safety concern and no hazard was ever present.

                                                             Riley Technique 2 and 7

       15.   12:05   Mayor Lopez of Oxnard.                  There is no doubt Mayor Lopez wants to do the best for his city, but he is in effect
                                                             exemplifying some of the worst examples of how a leader should speak to his citizens.
                                                             Mayor Lopez mentions how he lost sleep because of the potential of siting of an LNG
                                                             terminal in the previously mentioned story placing 70,000 lives at risk. Unfortunately,
                                                             Mayor Lopez is not qualified to understand the mechanics, nor the physics of LNG. And
                                                             although the laws in physics haven’t changed, since that study was performed, much of
                                                             our understanding of dense gas dispersion, penetrations of LNG tanks, ignitions of
                                                             vapor clouds and so forth have made us far more intelligent on the subject than we
                                                             were back in 1972. Unfortunately, he uses the word “nightmare” of an LNG disaster in
                                                             his discussion and, again, this is a case where someone not armed with all the facts is
                                                             making statements that can only serve to scare the people in his district.

                                                             Riley Technique 2 and 3




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       16.   12:55   A quote from Congressman Markey of          Unfortunately, there is no reference, no backup, no suggestion on what he based this
                     Massachusetts indicating that LNG           judgment. Clearly, items such as chlorine, ammonia, gasoline, propane, tall buildings or
                     facilities are the most attractive of all   mass transit systems pose just as “attractive” targets as LNG and by many analyses far
                     terrorist targets.                          more threatening targets.

                                                                 Riley Technique 3 and 7

       17.   13:15   ABC News Story from September               Unfortunately, no more details were provided to the story for that. The term “floating
                     2003. Quoting to the story, suggestion      bomb” suggests that somehow the energy content of the ships could be very rapidly
                     was made that terrorists could seize        released, there by causing a pressure wave that is a bomb-like situation. There is no
                     LNG ships and convert them to floating      known way to convert a loaded LNG ship into a bomb. See Section 5.2.
                     bombs.
                                                                 Riley Technique 2 and 7

       18.   13:25   From      the    Providence      Journal,   Again, a quote is taken from a newspaper by an individual not citing technical expertise
                     September 2004, Lloyd’s executive           as to how such a statement could be made. Again, the unknown “specialist’s” quote
                     likens attack to nuclear explosion.         that an LNG tank that will have the force of a small nuclear explosion cannot be justified
                                                                 under any known credible incident scenario.

                                                                 Riley Technique 2, 3 and 7

       19.   13:50   The science and environmental policy        Again, LNG tankers cannot explode. See Section 5.2.1. The only way to explode an
                     project, where it was stated “next to an    LNG tanker would be in fact to fill it with explosives and release the explosive. The LNG
                     atomic bomb, the most destructive           itself cannot cause an explosion such as an atomic bomb. This same discussion went
                     calamity available is the explosion of a    on to talk about showing Cleveland after LNG, suggesting it looked like Hiroshima after
                     tanker carrying LNG”.                       the atomic bomb. Please note in the pictures, the two LNG tanks sitting undamaged in
                                                                 the background. If the explosive force was so great, why were those tanks not taken
                                                                 out as well?

                                                                 Riley Technique 3 and 4



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       20.   14:50   The discussion around the live fire test   Not knowing the arms in questions, nor being an arms experts, the fact that small arms
                     suggests that small arms, not military     are mentioned indicates small penetration. It is very important people understand firing
                     rifles, can penetrate the containment of   any projectile into the side of an LNG ship, even if it penetrates the LNG tanks, will not
                     LNG ships.                                 result in an explosion. It could result in LNG flowing out of the hole, revaporizing, and
                                                                catching fire in the area of the release, but it would not result in explosion or a bomb-like
                                                                situation.

                                                                Riley Technique 4 and 7

       21.   15:20   The discussion of terrorists on board      The claims and statements made do not make sense, in terms of understanding the
                     an LNG ship.                               design and operation of an LNG tanker. Having people on board with the desire to turn
                                                                the LNG ship into a bomb, does not mean that there is a way of turning the ship into a
                                                                bomb. Having terrorists on board does not guarantee that there is a way to rupture the
                                                                tanks. “Manipulating valves” does not mean there is a way to overpressure the storage
                                                                tanks.

                                                                However, assume for the moment that valves could be manipulated to overpressure
                                                                tanks. The tanks are not pressure vessels but are very low pressure tanks. If
                                                                “overpressured” they would release low pressure vapor, not LNG.

                                                                Also see Section 5.2

                                                                Riley Technique 7




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       22.   15:50   The discussion that terrorists can buy     See Section 5.2 first.
                     software online that will teach them
                     how to maneuver LNG ships and              An LNG ship is not particularly maneuverable, especially by inexperienced personnel.
                     operate the ship. A variety of different   When an LNG approaches the shore it is typically attended by at least three tugboats.
                     claims are made, ranging from              But for the sake of the discussion let’s assume that the terrorists maneuvering the ship
                     maneuvering the ships close to shore       can somehow maneuver the ship into a position, where other personnel can release the
                     to releasing its cargo.                    LNG. Let’s further assume that the software bought online did in fact teach the
                                                                personnel to do all the things required to align the piping, start the pumps and start
                                                                releasing cargo. Although the ship may have 33 million gallons of LNG on board, there
                                                                is no LNG pump in the world able to deliver all of LNG quickly. Normal unloading time
                                                                for a ship that size would be in the 12 to 14 hour range.

                                                                It is at this point that some of Attorney Riley’s claims begin to contradict themselves. On
                                                                one hand he claims a release of LNG would result in large vapor clouds moving over
                                                                cities without ignition. On the other hand, he pointed out earlier, how little it took to
                                                                ignite such a vapor cloud.

                                                                The reality is, should such a large vapor cloud released by this method approach shore,
                                                                the cloud would undoubtedly find an ignition source very quickly (whether by design
                                                                protocol or other means) and burn back to the ship. Remember that Attorney Riley
                                                                discusses how easy it is to ignite natural gas (such as through a spark plug or even
                                                                dragging one’s feet across a carpet); these facts thus eliminate the “vapor cloud
                                                                enveloping the city” scenario. As far as risk and hazard damage to a nearby city, the
                                                                risk would be greatly diminished once the fire moves out next to the ship. It must be
                                                                remembered that an LNG ship draws about 40 feet, so an LNG ship can approach no
                                                                closer to the city shoreline than a location where the harbor is at least 40 feet deep.

                                                                Riley Technique 3, 4 and 7




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       23.   16:30   Pertains to the quote from Richard        One must first remember that this event occurred only days after 9/11 and it was hard
                     Clarke about closing down Boston          not to overreact to everything. The author believes that it was prudent to hold back the
                     Harbor in the days following 9/11, that   transit of the first LNG ship in the Boston Harbor after 9/11 until all appropriate safety
                     is closing Boston Harbor to the transit   security issues were addressed, both by the regulatory forces but also in the minds of
                     of LNG ships. Clarke is quoted as,        the people of Boston. Richard Clarke states (without providing any reference to the
                     “We had also learned that, had one of     source) that they had learned had one of the LNG tankers been attacked in the harbor it
                     the giant tankers blown up in the         would have wiped downtown Boston. No one knowledgeable in the design and
                     harbor, it would have wiped out           construction of LNG tankers would have made that statement. Clearly there were
                     downtown Boston.”                         concerns over a potential terrorist attack on an LNG ship in Boston Harbor for a variety
                                                               of reasons, but none of reasons should have been because of the concern of wiping out
                                                               Boston. Because if that possibility exists at all, why have the ships been routinely
                                                               coming into Boston Harbor ever since 9/11?

                                                               Riley Technique 3 and 7

       24.   17:10   Pertains to Richard Clarke’s comments     See Section 4.2.3 and 5.2.1.
                     in the study, that small ships could
                     cause catastrophic damage, if used to     Riley Technique 3 and 7
                     attack LNG ships.

       25.   17:20   U.S. Coast Guard exclusion zone           The facts as stated on the Coast Guard Safety and Security Zone are correct. It is that
                     imposed, in this case, around LNG         Safety and Security Zone that is part of the security that prevents small ships from
                     ships arriving at Boston harbor.          getting close to the vicinity of a moving LNG ship. However, the suggestion that that the
                                                               moving ship will disrupt fishing and tourism is not supported by the reality. There are
                                                               four LNG terminals operating in the United States, most of them have similar moving
                                                               Safety and Security Zones. Negative impact on the local fishing and tourism industry
                                                               has not been the subject of any significant complaints in their years of operation.

                                                               Riley Technique 1 and 4




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       26.   18:05   Attorney Riley suggests that small       See Section 5.2.
                     planes can be used by terrorist to
                     attack LNG facility, ships, et cetera.   If a terrorist were to consider using a small plane loaded with explosives to attack a
                     Similarly, they state that an airplane   “soft” target, what other more valuable targets might terrorist choose that would result in
                     could leave from Oxnard and fly to       greater loss of life than an LNG terminal or LNG ship? Clearly schools, hospitals and
                     Grace.                                   high-rise buildings offer a greater chance of mass deaths.

                                                              The graphic of the airplane flying to the Grace Platform shows the target on the Grace
                                                              platform, but no suggestion as to what would happen if a small plane hits that platform
                                                              11 miles offshore. There is no credible scenario whereby that situation would result in
                                                              placing anyone on shore at risk.

                                                              Riley Technique 6 and 7




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       27.      19:30    Attorney Riley suggests, but does not       See Item 6 above.
                         specifically state, that a small plane
                         hitting an LNG tanker would be              Remember Attorney Riley also pointed out that these ships are over three football fields
                         equivalent to 55 Hiroshima bombs.           in length. If a plane did hit an LNG ship, it could, at most, damage two tanks. Hitting
                                                                     those two tanks would not cause an explosion. Assuming the airplane was carrying
                                                                     explosives, which might then tear into the LNG tanks, what is the impact of such a
                                                                     scenario? There would be a very large fire at the immediate vicinity of the ship, no
                                                                     pressure wave, and no Hiroshima bomb.

                                                                     Riley Technique 7

       28.      20:10    Attorney Riley suggests the integrity of    See Section 4.1 about the robust nature of the LNG ship structure. Note in Section
                         the double-hull claim by LNG industry       4.2.3 that the Limburg lost only 4% of its cargo capacity in that terrorist attack. Ignoring
                         experts is intended for the gullible and    the conclusion in Section 4.2.3 that a Limburg-like incident involving an LNG ship would
                         naïve because of the incident involving     most likely not result in an LNG tank breach, ioMosaic Corporation of Salem, New
                         the crude oil ship Limburg and the          Hampshire, a provider of safety and risk management consultant services, estimated11
                         resulting “massive” fire.                   that had the one-meter hole would lead to a large fire in the immediate vicinity of the
                                                                     LNG ship. The thermal radiation zone would carry no more than four-tenths of a mile
                                                                     from the point of release.

                                                                     Riley Technique 4 and 7

       29.      23.22    The Sandia Report, where Attorney           Rather than extracting out of context comments from the report,12 it is most valuable to
                         Riley goes through extracting pieces of     go to the key conclusions in the executive summary included in Appendix A.
                         the report and making just comments
                         out of context.                             Riley Technique 4


      11
           “Managing LNG Risks: Separating the facts from the Myths” 2005
      12
           “Guidance on Risk Analysis and Safety Implications of a Large Liquefied Natural Gas (LNG) Spill Over Water,” December 2004


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       30.   24:10   CRS report. Again, Attorney Riley has   We feel it is far better to go to the conclusion page and read some of the comments
                     chosen to extract statements out of     there. For example:
                     context from the 29-page report.
                                                             Page 25 - “The LNG industry has a long history of relatively safe operations and has
                                                                       taken steps to secure its assets against terrorist attacks.”

                                                             Page 25 - “Because their security has been subject to intense public scrutiny, new LNG
                                                                       terminal and tanker operations may be safer than they might have been
                                                                       without such scrutiny and their citing may be less likely to be challenged at a
                                                                       later time when construction is already underway.”

                                                             Page 25 - (Advice to Congress for whom the report was prepared) “Congress may also
                                                                       act to improve its understanding of LNG’s security risk,” which we conclude
                                                                       means that much of the information they have been receiving the wrong
                                                                       (overly negative) side of the story.

                                                             Page 26 - (last paragraph) “Maintaining high levels of security around LNG tankers, for
                                                                       example, may be of limited benefit if other hazardous marine cargoes are less
                                                                       well protected.”

                                                             Riley Technique 1 and 4




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       31.   24:30   The quote from the Sandia report        It should be recognized that the Sandia report broke little, if any, new ground. As a
                     suggesting a vapor cloud could travel   matter of fact, the Sandia report mostly gathered available report studies and the like,
                     over two miles.                         and summarized them in a single paper. The reference to the “over two-mile vapor
                                                             cloud” comes from Table 28 in the Sandia report on page 87 of the 167 page report.
                                                             This table, however, was taken from Table VII on Page 58 of a report entitled, “Liquefied
                                                             Natural Gas in Vallejo: Health and Safety Issues” published by the LNG Health and
                                                             Safety Committee of the Disaster Council, City of Vallejo, January 16, 2003. The
                                                             Vallejo reports description of Table VII states: “The first scenario is that of a collision of
                                                             an LNG carrier. It ruptures one tank without ignition, spilling the entire contents through
                                                             either a one-meter, or five-meter diameter hole on the water.” Most important though is
                                                             the sentence that follows, “It is likely a collision violent enough to rupture a tank would
                                                             ignite the LNG.” They go on further to say, “This unlikely, but possible event was
                                                             considered.”

                                                             The author would unequivocally state that a collision violent enough to rupture a tank
                                                             would ignite the LNG. See Section 4.2.

                                                             Riley Technique 1 and 4




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       32.   25:46   Public may be denied access to safety   This comment, maybe above all on the video, comes across as completely contradictory
                     reports.                                to the concerns about safety. Detailed design information about LNG terminals must
                                                             remain out of the public hands for the sake of facility security. Following September
                                                             11th, open Internet access to critical energy infrastructure information on the Federal
                                                             Energy Regulatory Commission (FERC) sites has been restricted, because these
                                                             documents describe LNG facility design details, siting and layout. They also include the
                                                             facility’s security plans and security details. It is obvious restricting public access to this
                                                             kind of information is required to prevent access by terrorist groups. This is simply a
                                                             prudent practice to protect our nation and our citizens. It is too dangerous to allow
                                                             terrorists access to the detailed designs of these facilities. It is not about the danger of
                                                             the facilities that is being hidden; it is about the danger of allowing unlimited access to
                                                             groups of people who want to hurt us.

                                                             Riley Technique 4 and 7




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       33.   28:23   Attorney Riley’s statement that the     The initial comment is that very little of the tape was shown; it was heavily edited, which
                     myth is that LNG does not explode and   made it somewhat difficult to follow the context of what was being presented. Other
                     his response is “Utter nonsense” and    comments:
                     he proves it with an 1960s vintage
                     movie footage.                          1) At the beginning of the tape, they do show the aftermath of the Cleveland incident.
                                                                It is important to note that although there was a large fire and numerous small,
                                                                localized explosions due to natural gas being trapped in confined spaces in the
                                                                local storm sewers and then igniting, yet there are two LNG tanks that were in the
                                                                midst of impacted area can be seen in the picture as fully intact after the small,
                                                                localized explosions had all occurred.

                                                             2) Referring to the spill of LNG on the water, note the speed of vapor travel. It is quite
                                                                slow.

                                                             3) When the vapor cloud is ignited, contrary to Attorney Riley’s “utter nonsense”
                                                                statement, it can be seen that there was no explosion.

                                                             4) There is a comment in the film that vapor travels further than predicted. These films
                                                                were made either in 1969, or 1972. In the late 1980s, and early 1990s, the Gas
                                                                Research Institute spent considerable money developing a dense gas simulation
                                                                model called DEGADIS. DEGADIS much more closely simulates vapor travel on
                                                                water or on land.

                                                             5) In later footage, ignition of another vapor cloud is shown. Again, no explosion, but
                                                                in fact “a lazy diffusion flame” far from what you would get with an explosion.




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       33            Item 33 continued               6) The reference to a “major explosion that caught worldwide attention” refers to what
                                                        is called a “rapid phase transition” or RPT. RPTs can occur when the liquefied gas
                                                        has a very high content of “heavy” hydrocarbons, unlike typical LNG that is
                                                        delivered by ships. Very local “explosions” can occur when small pools of the heavy
                                                        hydrocarbons nearly instantly convert from liquid to vapor, i.e., rapid phase
                                                        transition. The energy released by an equal amount of mass in an RPT is about
                                                        1/1500th of the amount of energy that would be released by burning it. Further, it
                                                        has been found that the RPT phenomenon does not scale up with the size of the
                                                        spill, thus the real risk to personnel or property near an RPT is extremely small. In
                                                        the very few cases where RPTs have actually been experienced, the damage is
                                                        very localized and, for the most part, fairly insignificant. As such, RPTs in LNG
                                                        import facilities are irrelevant in terms of public safety.

                                                     7) Toward the end of the film during the summary, there is a mention that, “Vapor
                                                        spreads rapidly.” Yet the graphic indicates that the vapor is moving at 2.5 feet per
                                                        second, which is about two miles an hour. That in itself is somewhat misleading in
                                                        that the vapor will pretty much travel at the velocity of the wind.

                                                     8) The last comment to note is the reference to flashback or a burnback, that is once
                                                        ignited, the flame will burn back to the source of the LNG spill. This is different than
                                                        the images mentioned earlier in the video where it is suggested the flame will move
                                                        all around igniting and exploding all over a given area.

                                                         Riley Technique 1,4,5 and 7




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       34.   33:42   Attorney Riley says we need to know        See Section 4.2 and 5.
                     how far a large vapor cloud will travel.
                                                                The basic flaw in this statement is that it assumes a large volume of LNG can be
                                                                released essentially instantaneously from an LNG ship without ignition. It is a
                                                                consistent belief among those of us in the LNG industry with knowledge of the design of
                                                                an LNG ship that there is no mechanism whereby a large penetration LNG ship tank
                                                                can occur without ignition. Thereby, the conclusion is that it may be possible through
                                                                terrorist acts or accidental collisions to penetrate an LNG ship’s tank, it is not credible to
                                                                assume that the LNG will not ignite upon initial release. Thus, the emergency will be
                                                                very local to the LNG ship.

                                                                Riley Technique 7

       35.   33:37   This has to do with the discussion of      See Section 2.2
                     Skikda and the later findings as to the
                     cause of the explosion at the Skikda       The Skikda liquefaction system has very little similarity to an LNG import system other
                     Liquefaction facility.                     than both have docks for loading or unloading ships and both have LNG tanks.

                                                                Riley Technique 2, 4 and 7




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       36.   33:58   Attorney Riley suggests that experts in   Mr. Riley’s statements on flammability limits are correct. What Attorney Riley fails to
                     the industry claim LNG is safe because    note in his comparison in addition to flammability limits is the relative ignition
                     of a narrow flammability limit and then   temperatures.
                     points out that other fuels have lower
                     flammability limits suggesting that LNG   Clearly, the colder a fuel ignites, the more potential there is for ignition sources. For
                     or natural gas is thereby less safe.      example, unleaded gasoline has an ignition temperature around 500°F, whereas jet fuel
                                                               is a little over 400°F. Propane and butane, depending on their mixture, have an ignition
                                                               temperature somewhere between 900 and 1100°F, whereas methane, CH4, natural gas
                                                               has an ignition temperature of something over 1100°F. Whereas Mr. Riley states that
                                                               methane has the “greatest likelihood of combustion” of the products listed, we would
                                                               state that methane has the least likelihood of combustion for it will see the fewest
                                                               sources of ignition due to its higher ignition temperature requirement.

                                                               Riley Technique 7

       37.   34:14   Attorney Riley is suggesting that         All anyone has to do is go to any environmental site and look up the various kinds of
                     natural gas is not a favorable fuel for   fuels to determine that methane (natural gas) is considered one of the cleanest burning
                     the environment.                          available fuels. The fallacy in attorney Riley’s discussion here is a suggestion that the
                                                               methane itself will not be used as fuel, but simply released to the atmosphere.

                                                               Although methane is considered a “global warming gas” by some, unfortunately, the
                                                               natural occurring sources of methane (termites, ants, cattle and earth-based)
                                                               overwhelm by millions, if not billions of times, any estimates of fugitive emissions from
                                                               an LNG operation.

                                                               Lastly, suggesting that natural gas is not good for the environment is totally counter to
                                                               those countries subscribing to the Kyoto protocol.

                                                               Riley Technique 4 and 7




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      Item   Video   Topic/
       No.   Time    Quote                                      Refutation

       38.   35:15   Attorney Riley comments that it is         Unfortunately, the statement makes no sense whatsoever. The boil-off rate for LNG
                     shocking that the boil-off rate from an    tankers is between 0.15 to 0.25 percent per day. This means that the LNG inside the
                     LNG tanker is 15 to 25 percent.            ship is boiling off (boil-off is nothing more than natural gas). It is captured and either re-
                                                                condensed (turned back into LNG) and put back into the tank or used for fuel to power
                                                                the ship.

                                                                The statement that each LNG tanker burns a hundred tons of fuel per day is true, but
                                                                the purpose of the statement by Mr. Riley is unclear, all ships burn fuel.

                                                                The next statement is that each LNG tanker produces harmful emissions that will
                                                                exceed power plant emissions. Unfortunately, again, Attorney Riley has gone into a
                                                                document and extracted information completely out of context. The context of this
                                                                report was that an LNG tanker at full steam at sea would have higher emissions than a
                                                                once proposed power plant to be located in Vallejo, California. Unfortunately the report
                                                                did not quantify the power plant in terms of its size, emission control technologies, fuel
                                                                type or anything else. So beyond understanding that this statement was pulled
                                                                completely out of context, we have no further rebuttal.

                                                                Riley Technique 1, 4 and 7

       39.   35:33   LNG is a fuel cocktail with inconsistent   If one were merely to look at the compositions of LNG loaded at the 18 or 20 facilities
                     compositions.                              around the world that produce LNG, the statement is true. That is, that LNG from
                                                                different sources will have different compositions. However, designers of LNG facilities
                                                                take into account the acceptable compositional ranges of LNG to come into a given
                                                                facility such that, downstream, those compositions will not impact the safe operation of
                                                                the import terminal.

                                                                Riley Technique 1 and 4




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      Item   Video   Topic/
       No.   Time    Quote                                     Refutation

       40.   36:05   The claim that energy officials are       It is not the author’s expertise to comment in depth on the domestic production or
                     claiming natural gas reserves are         availability of natural gas. On the other hand, it’s quite clear that LNG will only be
                     declining.                                imported if it is a cost-competitive with other sources of natural gas. Most of the energy
                                                               officials would look at it not from the standpoint of declining U.S. supplies, but providing
                                                               the consumer with a lower cost of fuel.

       41.   37:10   The discussion of guinea pigs/            It is, however, unfortunate that Attorney Riley chose to use building a graphic
                     innovative topics and so forth will not   suggesting city blocks and buildings as replicating the size of the offshore facility being
                     be rebutted at this time as it has no     proposed by BHP Billiton (Cabrillo Port). It is surprising and disappointing, given all the
                     relevance to the Sparrows Point           research that Mr. Riley was apparently unable to pull a simple graphic off of BHP’s web
                     project.                                  site that would give the audience some sense of size and relative design of a floating
                                                               receiving terminal. He chose instead to relate the project to “Chicago city blocks” and
                                                               17-story buildings. In Appendix B one can see a comparison of Riley’s graphic of
                                                               Cabrillo and the developer’s graphic.

                                                               Riley Technique 6

                                                               For clarification, the Sparrows Point facility will not be using any bay water in processing
                                                               the LNG at Sparrows Point, contrary to any impression that might have been left by Mr.
                                                               Riley about LNG terminals.




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      Item   Video   Topic/
       No.   Time    Quote                                   Refutation

       42.   41:44   Discussion   -   High-pressure   gas    Attorney Riley seems to be stating that there should not be high-pressure gas pipelines
                     pipelines.                              running across the United States as they currently do today. As with any other energy
                                                             fuel, accidents do happen. However, when one reviews the history of the thousands of
                                                             miles of high-pressure natural gas pipelines running through the United States, what is
                                                             found is a very enviable safety record. On top of that, new pipelines installed today
                                                             meet more stringent requirements than those that are in the ground today. Additionally,
                                                             corrosion is a concern for underground pipelines and there are numerous procedures
                                                             and techniques taken to assure that the outside pipe surface does not corrode.
                                                             However, normal natural gas does have certain constituents that could aid in potential
                                                             corrosion of the pipe inside surface, such as sulfur-containing compounds and very
                                                             small amounts of water. One of the benefits of natural gas produced from LNG is that
                                                             the gas has neither water nor sulfur-containing compounds in it. So any minimal
                                                             concern about internal pipe corrosion caused by these constituents is completely
                                                             mitigated.

                                                             Riley Technique 1 and 7

       43.   42:29   Attorney Riley states Fluxy’s LNG,      The name of the company that owned the pipeline was Fluxy’s LNG.             LNG had
                     which runs Belgium’s network of         absolutely nothing to do with the blast.
                     natural gas pipeline, confirmed a gas
                     leak caused the blast. However, it      Riley Technique 1 and 6
                     should be noted that “Fluxy’s LNG and
                     gas leak caused the blast” are
                     highlighted red. So one would read,
                     “Fluxy’s LNG gas leak caused the
                     blast”.




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      Item   Video   Topic/
       No.   Time    Quote                                   Refutation

       44.   42:55   Gas leaks in the Washington Gas area.   Again, Attorney Riley has taken a misstatement from ABC news and used it to suggest
                                                             LNG was the cause of the leak in the rubber seals. The ABC story misstated,
                                                             “Washington Gas concludes LNG caused rubber seals within pipe couplings to shrink
                                                             and leak”, leaving one with the impression that LNG was in the pipes. In fact, the gas
                                                             that was in the pipe, was vaporized LNG, that is natural gas. The vaporized LNG was
                                                             lacking heavy hydrocarbons due to the purification process in making LNG.
                                                             Washington Gas had in one part of their service area some extremely old piping that
                                                             used rubber seals rather than welded or bolted pipe. One reason suggested for the
                                                             natural gas leaks is the lack of heavy hydrocarbons resulted in some of these rubber
                                                             seals aging more quickly, and preventing them to act as originally designed. As a
                                                             result, small gas leaks were noticed by means of individual smelling gas odor at a
                                                             variety of areas in the Washington Gas district where the piping had these rubber seals.

                                                             Riley Technique 2

       45.   43:53   Discussion on seismic conditions.       Seismic will not be a concern in a design of the Sparrows Point facility. But tanks will be
                                                             designed for the maximum seismic condition, which in Maryland it is a much lower level
                                                             of activity than California from which the video is based.




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                                        Appendix A: Sandia Report

      From Executive Summary:

      1. The system-level, risk-based guidance developed in this report, though general in nature (non
         site-specific), can be applied as a baseline process for evaluating LNG operations where there is
         the potential for LNG spills over water.

      2. A review of four recent LNG studies showed a broad range of results, due to variations in
         models, approaches, and assumptions. The four studies are not consistent and focus only on
         consequences rather than both risks and consequences. While consequence studies are important,
         they should be used to support comprehensive, risk-based management and planning approaches
         for identifying, preventing, and mitigating hazards to public safety and property from potential
         LNG spills.

      3. Risks from accidental LNG spills, such as from collisions and groundings, are small and
         manageable with current safety policies and practices.

      4. Risks from intentional events, such as terrorist acts, can be significantly reduced with appropriate
         security, planning, prevention, and mitigation.

      5. This report includes a general analysis for a range of intentional attacks. The consequences from
         an intentional breach can be more severe than those from accidental breaches. Multiple
         techniques exist to enhance LNG spill safety and security management and to reduce the
         potential of a large LNG spill due to intentional threats. If effectively implemented, these
         techniques could significantly reduce the potential for an intentional LNG spill.

      6. Management approaches to reduce risks to public safety and property from LNG spills include
         operation and safety management, improved modeling and analysis, improvements in ship and
         security system inspections, establishment and maintenance of safety zones, and advances in
         future LNG off-loading technologies. If effectively implemented, these elements could reduce
         significantly the potential risks from an LNG spill.

      7. Risk identification and risk management processes should be conducted in cooperation with
         appropriate stakeholders, including public safety officials and elected public officials.
         Considerations should include site-specific conditions, available intelligence, threat assessments,
         safety and security operations, and available resources.

      8. While there are limitations in existing data and current modeling capabilities for analyzing LNG
         spills over water, existing tools, if applied as identified in the guidance sections of this report, can
         be used to identify and mitigate hazards to protect both public safety and property. Factors that
         should be considered in applying appropriate models to a specific problem include: model
         documentation and support, assumptions and limitations, comparison with data, change control
         and upgrade information, user support, appropriate modeling of the physics of a spill, modeling
         of the influence of environmental conditions, spill and fire dynamics, and peer review of models

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                                      Appendix A: Sandia Report

         used for various applications. As more LNG spill testing data are obtained and modeling
         capabilities are improved, those advancements can be incorporated into future risk analyses.

      9. Where analysis reveals that potential impacts on public safety and property could be high and
         where interactions with terrain or structures can occur, modern, validated computational fluid
         dynamics (CFD) models can be used to improve analysis of site-specific hazards, consequences,
         and risks.

      10. LNG cargo tank hole sizes for most credible threats range from two to twelve square meters;
          expected sizes for intentional threats are nominally five square meters.

      11. The most significant impacts to public safety and property exist within approximately 500 m of a
          spill, due to thermal hazards from fires, with lower public health and safety impacts at distances
          beyond approximately 1600 m.

      12. Large, unignited LNG vapor releases are unlikely. If they do not ignite, vapor clouds could
          spread over distances greater than 1600 m from a spill. For nominal accidental spills, the
          resulting hazard ranges could extend up to 1700 m. For a nominal intentional spill, the hazard
          range could extend to 2500 m. The actual hazard distances will depend on breach and spill size,
          site-specific conditions, and environmental conditions.

      13. Cascading damage (multiple cargo tank failures) due to brittle fracture from exposure to
          cryogenic liquid or fire-induced damage to foam insulation was considered. Such releases were
          evaluated and, while possible under certain conditions, are not likely to involve more than two or
          three cargo tanks for any single incident. Cascading events were analyzed and are not expected
          to greatly increase (not more than 20%-30%) the overall fire size or hazard ranges noted in
          Conclusion 11 above, but will increase the expected fire duration.




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                                      Appendix B: Cabrillo Port

      Attorney Riley’s graphic of Cabrillo Port:




      BHP Billiton’s publicly accessible graphic of Cabrillo Port:




      RPT-06903-01                                 Page 52           June 2006
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                                              About the Author
                              Jeffrey (Jeff) P. Beale, President, CH·IV International

      Mr. Beale is the President of CH·IV International of Millersville, MD. Jeff is an internationally known
      expert on liquefied natural gas (LNG) system safety, design and operations with almost thirty years of
      experience.

      Jeff, an aeronautical engineering graduate from Ohio State, entered the natural gas industry with the
      Columbia Gas System in 1974. In 1976 he was later promoted to Operations Engineer at the Cove Point
      LNG Receiving Terminal. Trunkline LNG Company recruited him in 1979 to set up the engineering
      team for the Lake Charles LNG Receiving Terminal in Louisiana and direct the start-up of that facility.
      In 1984, he proceeded into the end-user side of the natural gas industry, providing consulting and
      technical services to a wide variety of industrial customers for Nalco Chemical Company. The restart on
      the Everett Marine LNG Terminal in Boston in 1988 drew him back into the LNG industry where he
      performed a variety of roles including project management, business development and technical support.
      He is one of only three individuals in the country to have worked at three of the four LNG operating
      receiving terminals in the United States. He left Distrigas in 1991 to form CH·IV Corporation. CH·IV
      Corporation and MPR Associates of Alexandria, VA formed CH·IV International in early 2001.

      As President of CH·IV International, Jeff has overseen a wide variety of international LNG-based projects
      covering virtually all aspects of LNG facility design, safety, security, operations and construction.

      Jeff has presented and/or authored over 50 articles, papers and publications pertaining to cryogenics,
      LNG and LNG vehicles published in various trade journals and conference proceedings. He was featured
      as the author of the “Cold Corner” in the “Natural Gas Fuels Magazine” from 1993 through 1996. Jeff
      has been an invited speaker and participant in over 30 various U.S. and international LNG, natural gas
      and alternative fuel vehicle conferences and trade shows.

      Jeff is the author of “Introduction to LNG Safety,” a world-renown book explaining the properties of
      LNG and how these properties impact personal and public safety.

      Jeff holds U.S. Patents 5,549,142 and 5,582,218, both entitled “Dispensing System for Refueling
      Transport Containers with Cryogenic Liquid.”

      Memberships include National Fire Protection Association (NFPA) and the Cryogenic Society of
      America. He is a member of the NFPA Technical Committee on Liquefied Natural Gas (NFPA 59A)
      and a past member of the Gas Research Institute's Project Advisor Group for LNG Safety.

      Jeff and his wife of 35 years, Cheri, have two grown children, Jason (29) and Amanda (25). The Beales
      make their home in Maryland near Baltimore.



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