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CITED AS "6 FERC 1 . . . .”

[graphic]

[163,009]

Distrigas Corporation, Docket Nos. CP70-196 and CP74-227;

Distrigas of Massachusetts Corporation, Docket Nos. CP73-135 and CP74-137 Initial Decision of the Presiding Administrative Law Judge

(Issued June 28, 1977)

[Note: Order affirming Initial Decision conditioning certificate of public convenience and necessity was issued January 2, 1979, and appears at 6 FERC ¶ 61,003.]

Appearances*

Edwin S. Nail and Sherman S. Poland for Distrigas Corporation and Distrigas of Massachusetts Corporation

L. William Law, Jr. for Boston Gas Company

John S. Schmid for Bay State Gas Company, The Connecticut Gas Company, Fall River Gas Company, Haverhill Gas Company, The Providence Gas Company and Valley Gas Company

F. Peter O'Hara and Joseph Stevens for Brooklyn Union Gas Company

Frederick Moring and James A. Wilderotter for South Jersey Gas Company and New Jersey Natural Gas Company

Charles E. McGee for Eascogas LNG, Inc.

John T. Ketcham for Algonquin Gas Transmission Company

Edward S. Kirby for Public Service Electric & Gas Company

Richard Berger for the Attorney General of the State of New York

Nancy Stassinopoulos for the City of New York

Peter A. Buchsbaum for Public Advocate of the State of New Jersey
Bruce J. Terris for Congressman John M. Murphy

Kevin White, Mayor, Boston, Massachusetts

Thomas B. Arnold for Union of Concerned Scientists Fund, Inc.
Allan W. Anderson, Jr. for the Staff of the Federal Commission

LITT, Presiding Administrative Law Judge:

About seven years ago Distrigas Corporation and Distrigas of Massachusetts as a successor in part, filed innovative applications to import and distribute liquefied natural gas (LNG) to U.S. markets. Construction of its principal import terminal at Everett, Massachusetts, was completed in the early 1970's and since then Distrigas has imported, stored and distributed LNG pursuant to appropriate licenses and certificates. Following a long procedural history which is no longer fully relevant, the Commission, in its decision issued June 14, 1977, 58

FPC 2589, approved a settlement agreement of a number of outstanding issues in this case and authorized issuance of a certificate of public convenience and necessity subject to certain conditions.' (Findings and Order Approving Settlement Agreement and Issuing Certificates of Public Convenience and Necessity.) Significant at this point is ordering paragraph (E) of that decision wherein the Commission conditioned the grants of authority "upon favorable resolution of the pending environmental and safety issues" here. Affirmative

findings on these issues, given the present posture of the proceedings, would satisfy the condition and that authorization granted Distrigas by the Commission's June 14, 1977 order would be fully operative.

Extensive hearings on various aspects of the environment and safety have been held, including local hearings in Boston on October 8, 1976. The last hearings were held in January 1977 on the environmental issues and in March 1977 on the now settled issues. Briefs and Reply Briefs have been filed by Distrigas and Staff. A number of subsequently filed motions and answers to motions not directly germane to the issue at bar are described and disposed of below.

Discussion and Conclusion

The Distrigas facilities at Everett, consisting primarily of a marine unloading facility, LNG storage tanks, a regasification plant and related send-out equipment, are described in the Initial Decision in this proceeding issued July 14, 1971, 47 FPC 799, et seq. These facilities have been in operation for close to six years and have operated without any untoward safety or environmental incidents. The Staff's Environmental Statement, which includes a full analysis of the facilities and the proposed operations, concluded (Exh. E-1, p. 9-1):

The information elicited by the Staff from field investigations, reference and source data, and special studies indicates that approval of the proposed importations of LNG, construction and operation of the LNG terminal and pipeline facilities, and the sale of natural gas would have no significant adverse impact directly on the environment under normal operating conditions.

As far as the parties are concerned, there are no overall environmental or safety issues remaining in this case as to the Everett facilities or to the marine transportation to the Everett facilities. Thus the Commission Staff's final environmental impact statement specifically finds that the risks attendant to this facility and related transportation systems are acceptable. No one has excepted to these findings, and the record evidence supports Staff's conclusions. On the basis of extensive evidence of record, including that addressed by intervenors who opposed licensing the Everett facilities, it is found that the possibility of the type of accidental spill which would result in the formation of a vapor cloud capable of catastrophic destruction is extremely remote. Similarly, the evidence of record shows that forces substantial enough to cause such spills would in all likelihood also cause a fire almost immediately and that the probability of a major vapor cloud being ignited only after maximum potential growth of the cloud is virtually nonexistent. The limited shipping activity in Boston Harbor and the stringent Coast Guard controls lead to the conclusion, furthermore, that a major ship

accident is highly unlikely to occur. In sum, there is significant and convincing evidence that the Everett facilities are environmentally sound and safe to operate.

A curious event has occurred in this proceeding, however, on the way to the above decision. While the above findings are not opposed by any party, those intervenors representing parties having an interest solely in preventing issuance, in a separate proceeding, of licensing for importation of LNG and certificates for operation of an LNG facility at Staten Island, New York, want the precedential value restricted to the facts of the case.' Motions and supporting memoranda seeking this limitation have been filed by the Honorable John M. Murphy, U.S. House of Representatives; the City of New York; the Attorney General of the State of New York; and the Public Advocate of the State of New Jersey. Various answers have been filed by Distrigas and Staff to these motions.* Assuming that a judge can speak to future precedential value of his decision, where a distinction can be made between the facts, such as a difference in marine transport characteristics between ports, logic permits and requires limitations of findings to the facts of the case. But where the issue is solely that of physical phenomena which do not vary significantly between locations, it is evident that if Staff's findings in its impact statement are correct as to one location, it is likely, absent additional sitespecific evidence to the contrary, that such findings will be similarly applicable to another location. This decision, of course, concerns itself only with the Everett facilities. The motions are not determinative of the issues in this record as to the Everett facilities and must be denied. Obviously, these parties had, and will have, ample opportunity to protect their interests as they may lie in the appropriate proceedings to which they are also parties.

Before leaving the safety issues, several other matters must be discussed. Throughout this proceeding there have been a number of implicit assumptions critical of the Commission made by some of the participants. The first criticism is that the Federal Power Commission somehow has been derelict in its public duty because it did not view LNG plant siting in the late 1960's as requiring nationwide planning. The second is the alleged lack of expertise of the agency to analyze that evidence which is made on the record with an additional vague allegation that the agency is not well equipped for the task. The first criticism is not terribly relevant for, even if other sites (1) can be shown to be available, (2) possibly could have been investigated earlier in more depth by the agency, or (3) could be demonstrated as "better" in some respects, it does not mean that the site which has been picked in the first instance is not acceptable and not environmentally safe. The basic considerations necessary to pick a suitable location are the same regardless of who makes the initial input or

decision: compatible industrial area; limitation on risk through either remoteness or engineering design; ease of transport to the location; closeness to market; etc. Certainly business uses the same basic tools as the government planner, if for no other reason than that ultimate approval must be obtained from the government planners. The suggestion that the procedure of site selection would have been significantly enhanced if the government had done the initial "planning" is not supported by any showing that the method used here is less efficient or efficacious."

Nor is there merit to the non-specific suggestions that the agency is ill-equipped to choose among conflicting scientific evidence or to reach basic decisions as to where the public interest lies. This particular criticism suggests first that "scientists" are more able to make decisions, assumedly even in areas outside their expertise, than others. Even granting that a number of scientists may begin the effort ahead of the decision-maker due to their previous scientific training, the record, including the scientific evidence, made for decision purposes is explicated in common English and the scientists' advantage, no matter what it may have been at the commencement of the exercise, rapidly fades. Moreover, the decision-maker calls upon all parties to supply that information necessary for a complete record and relies upon the entire record. The record in this case, spreading over a number of years, is more than ample to permit fair decisions to be made. There is nothing inappropriate in relying upon this record by those charged with that responsibility and, while more evidence in a future case might suggest further findings, this record is complete and provides an ample basis to support the decision here.

One last observation is in order. The agency must decide issues not on the basis of unlikely scenarios, but on the basis of that reasonable evidence produced by both the parties and a relatively thorough independent analysis by Staff. Unfortunately, there has been a concern expressed in the "what if" syndrome which has gone far beyond what the evidence shows are practical considerations even under a most conservative approach. Giant can openers do not rip open ship bottoms when docked, and if they do, they are not likely to do so without sparks that would ignite the fuel at its source. Nor do forces blow up facilities quietly or with spark-free explosives-whether from natural causes or sabotage.' It would be better if the examples used for both the "probable" and "possible" occurrences stayed closer to the facts.

Unrelated to the environmental and safety issues, Staff has also raised an issue of price, arguing that the Commission affirmed the original findings in the initial decision which denied Distrigas' socalled "winter rate" of $0.73 per MMBtu. Distrigas makes a number of imaginative arguments that the Commission did not decide the issue-showing

more of the ingenuity of its lawyers than demonstrated history. The Commission has, in fact, decided this issue and it is not at bar here. If Distrigas chooses, it can seek appropriate relief from the Commission.

Staff has proposed that certain conditions be imposed. In a series of six proposals, Staff requests that Distrigas be required to (1) file semiannual reports describing facility operations including technical information regarding normal operations and any abnormalities, (2) establish an emergency notification and evacuation plan, (3) cease all LNG transfer operations during periods of adjacent junkyard activity, (4) operate storage facilities according to procedures outlined on pages 4-31 and 4-32 of Staff's FEIS regarding rollover and mixing, (5) suspend traffic on adjacent roads during period of LNG unloading and (6) provide adequate dike height, ditching and land sloping to contain potential liquid spills of 30,000 gallons within the confines of the terminal property lines.

Upon analysis of these proposals and of Distrigas' responses to them, it becomes clear that some of them address issues that have already been resolved. This is the case with respect to proposed condition (3), where the objective of insulating the transfer line from activity in the junkyard has been satisfied by the erection of two concrete walls and an eight foot separation area between them which serves as a fire lane; condition (5), which has already been carried out; and condition (6), which has been met through precautions taken by Distrigas that provide a spill capacity of approximately 153,000 gallons. Accordingly, Staff's recommended conditions 3, 5 and 6 are rejected as having been met."

Distrigas has not contested Staff's proposed condition (1), which calls for the filing of semiannual reports with respect to facility operations and abnormalities, and therefore it is adopted in its entirety as set forth below.

With respect to proposed condition (2), Distrigas correctly notes that the authority to implement the appropriate emergency notification and evacuation plans rests with the various local government entities and the Coast Guard. Thus, it is more accurate to require the applicants to work in concert with the appropriate governmental units to draft plans. In order to implement this condition, the revision of Staff's second proposed condition set out in Distrigas' reply brief is adopted.

Distrigas objects to Staff's proposed condition (4) on the grounds that conforming the operation of the storage facilities according to the procedures contained in Staff's FEIS would reduce their capacity to adapt to technological changes in the procedures designed to prevent rollover. It is noteworthy that the applicants do not contest the basic assumption of the adequacy of the methods enumerated in Staff's FEIS. Thus, Staff's proposed condition (4) is adopted with the stipulation that the applicant be

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