Frequently Asked Questions
What is a deepwater port?
Deepwater ports were initially defined in 1974 as “non-vessel, fixed or floating manmade structures that are used as ports or terminals for the loading, unloading, or handling of oil for transportation to a state.”
The 2002 amendment to the Deepwater Port Act (DWPA) expanded this definition to include facilities constructed at sea which are used as terminals to transfer natural gas, usually received in the form of Liquefied Natural Gas (LNG) from LNG carriers for delivery to deepwater ports, onshore storage facilities, and pipelines. Eleven such land-based import/export facilities and three such deepwater based LNG facilities have been constructed in the United States to date. Additional import facilities would accommodate the projected increases in demand for LNG. In light of this, the DWPA was amended to allow for the construction of new LNG port facilities in the waters beyond the U.S. territorial limits.
The term “Deepwater Port” includes all associated components and equipment, including pipelines, pumping stations, service platforms, mooring buoys, and similar features or equipment to the extent they are located seaward of the high water mark.
Who has the authority to issue licenses for deepwater ports?
The authority for the issuance, transfer, amendment, or reinstatement of a license for the construction or maintenance of a deepwater port rests with the U.S. Secretary of Transportation. However, as published in the June 18, 2003 Federal Register, the Secretary delegated this authority to the Administrator of the Maritime Administration (68 FR 36496).
The Maritime Administration, acting on behalf of the Secretary, is required to confer with a number of Federal agencies and the public, and must also obtain approval from the Governor of the adjacent state(s).
The U.S. Coast Guard, now part of Department of Homeland Security, has delegated authority for the application processing and environmental review functions (62 FR 11382), and the Administrator of the Pipeline and Hazardous Materials Administration, which is also part of the Department of Transportation, has authority by delegation for the establishment, enforcement, and review of regulations concerning the safe construction, operation, or maintenance of pipelines on Federal Lands or the Outer Continental Shelf (49 CFR §1.53(a)(3)).
What is the license granting process and who is involved in it?
The Maritime Administration, working in conjunction with the U.S. Coast Guard, administers the review process for granting deepwater port licenses and coordinates consultations among several Federal and applicable state agencies. MARAD is also charged with confirming the ability of the applicant to meet the financial requirements of the Deepwater Port Act, including the posting of the required bonds, as well as governing crew requirements for vessels.
The U.S. Coast Guard is instrumental in developing the environmental and marine navigation aspects of the application review process and in confirming compliance with all environmental regulations as stipulated by National Environmental Policy Act.
Beyond the Maritime Administration and the U.S. Coast Guard, the U.S. Environmental Protection Agency; the Department of Commerce’s National Oceanic and Atmospheric Administration and the National Marine Fisheries Service have responsibilities to make recommendations regarding potential impacts of the proposed facilities on the environment in accordance with the National Environmental Policy Act, to which the port facilities are subject.
The U.S. Fish and Wildlife Services is responsible for protecting and conserving migratory birds, endangered species, marine mammals, and fish. The Bureau of Safety and Environmental Enforcement governs the safety, environment, and energy resources in the ocean. Applicants for Federal licenses are required to consult with the U.S. Fish and Wildlife and the Bureau of Safety and Environmental Enforcement to comply with certain environmental and ocean management regulations.
The Maritime Administration, working through the Bureau of Ocean Energy Management (which governs right of ways and lease block issuance) and the Department of Energy, provides insight into the benefits and consequences of the proposed facilities to the nation’s energy needs.
The U.S. Department of State provides counsel in the reconciliation of safety and environmental requirements with respect to international obligations.
Ultimately, the Maritime Administration has the final approval authority and responsibility to issue the Record of Decision and License, if approved. The Record of Decision and License are drafted and negotiated in close cooperation with the U.S. Coast Guard and other cooperating agencies. The Record of Decision must be issued within 90 days of the last public hearing, which by statute, must take place within 240 days after the public has been notified of a complete application.
How and where do companies get information to apply for a DWP license?
Congress, in the Maritime Security Act of 2002 authorized the Deepwater Port Act to streamline regulations for natural gas and deepwater ports. The DWPA was subsequently codified in Title 33 of the Code of Federal Regulations (CFR) under Parts 148, 149, and 150, and this rule delineates the requirements on how to apply for a deepwater port license. Part 148 provides specific information including frequently asked questions on submitting applications to own, construct, and operate LNG deepwater ports.
What happens if a company does not accept the conditions specified for the license?
The Secretary may issue a license outright with no special conditions, deny the license, or issue a license subject to certain conditions which may be specified. If the applicant does not accept the conditions, the applicant may withdraw its application.
How long does the license-granting process take?
The project milestones of the application process have mandatory deadlines and operate on a 356-day ‘clock’ that begins when the applicant submits an application. The Maritime Administration, the Coast Guard, and other federal and state agencies evaluate a newly submitted application and work with applicants to meet rigorous review requirements as well as the expectations of state regulators and the general public. This process results in either a Notice of Application or a formal rejection by the Maritime Administrator.
Once the application has made it through the Federal, State, and National Environmental Protection Act review processes, it has reached the Record of Decision stage, which requires the Maritime Administrator to consider nine criteria to approve an application for a license. These nine criteria include:
- Financial responsibility,
- Compliance with relevant laws, regulations, and license conditions,
- National interest,
- International navigation,
- Impact on the marine environment,
- National environmental laws,
- Consultation with the Secretaries of the Army, State, and Defense,
- Governor of the adjacent coastal state, and
- Consistency with Coastal Zone Management Program.
When a favorable Record of Decision is issued, it will stipulate certain conditions the applicant must comply with in order to receive an official deepwater port license. Upon certification of acceptable compliance with applicable laws, requirements and conditions, the Maritime Administration will grant a deepwater port license.
What is the role of the states in the licensing process?
Adjacent coastal states, acting through their governors, have a veto power over all Deepwater Port Act projects. States must also demonstrate compliance with the Coastal Zone Management Act.
How does the public get involved?
The public is informed of the entire process through publications in the Federal Register, as well as the posting of all public documents on the Federal Docket Management System: www.regulations.gov. The National Environment Policy Act (NEPA) process, as well as other Federal statutes (e.g., the Coastal Zone Management Act) also provides for public participation. Each Federal Register notice will indicate opportunities for public involvement. The public is able to participate in the initial scoping meeting to determine which potential impacts are most important to consider during the NEPA process. Following issuance of a draft Environmental Impact Statement, or an Environmental Assessment, the public is able to comment as well as attend public hearings. The final environmental report will include responses to public and agency comments.
How is LNG Different from Natural Gas?
LNG, or liquefied natural gas, is natural gas in liquid form. Natural gas is cooled at an onshore terminal, a pipeline liquefaction facility, or a ship with a liquefaction system until it is liquefied at minus 260 degrees Fahrenheit (-161 degrees Celsius) for transport via highway, rail, or vessel. Upon reaching its destination, LNG may be heated and vaporized back into natural gas for use by the consumer.
What are the different types of vaporization technologies that are commonly used to process LNG?
Several common types of vaporization commonly used are Open Rack Vaporization; Submerged Combustion Vaporization; Intermediate Fluid Vaporization; and Shell-and-Tube Vaporization.
What is Open Rack Vaporization?
Open Rack Vaporization is a type of technology that uses the heat from a continuous supply of processed water to regasify LNG and produce natural gas.
For offshore terminals, seawater provides the supply of process water. Seawater at ambient temperature is pumped through a series of heat exchanges, treated with an oxidizer (e.g., sodium hypochlorite) to prevent fouling from marine growth, and is discharged back to the source at a cooler temperature. Vaporization effectiveness depends on seawater temperature, which must be at least 46 degrees Fahrenheit and preferably warmer.
This technology produces no combustion-related air emissions except for those related to pumping equipment. Because of the large volumes of water used, protecting the source and receiving waters is essential to the design and use of Open Rack Vaporization intake and discharge.
What is Submerged Combustion Vaporization?
Submerged Combustion Vaporization is a highly efficient, bath-type vaporization technology where the liquefied natural gas (LNG) passes through submerged steel tube bundles. The heat source used to warm the process water comes directly from jetting combustion gases into the bath (with the combustion process fueled by 1.5 to 2.0 percent of the LNG cargo).
Submerged Combustion Vaporization uses an open flame to heat the process water. In order to neutralize acidic conditions, the water must be treated with a caustic compound, which requires safeguards in transportation, storage, handling, and use. This technology requires a considerable amount of space, an open flame, and high fuel usage.
What is Intermediate Fluid Vaporization?
This closed-loop technology uses an antifreeze-type fluid, such as ethylene glycol or propane, referred to as the heat transfer fluid (HTF). Seawater flows through tubes in the bottom of a large boiler to heat the HTF.
This fluid passes through a shell-and-tube vaporization unit to regasify the LNG, and then moves to a second heat exchanger where it condenses before being re-boiled. This two heat exchanger arrangement requires a large amount of space.
What is Shell and Tube Vaporization?
Shell and Tube Vaporization (STV) technology uses a natural gas-fired heat exchanger or boiler in which tubes containing Liquefied Natural Gas pass through a counter-current of heated water or glycol/water. The natural gas to heat the water or glycol/water is extracted from the send-out from the system’s vaporizers. The burning of natural gas results in NOx and other air emissions. STV’s can also be designed to use seawater as a heat source, in an open-loop system. STV’s are suitable for use on floating platforms or ships that lack the stability of a fixed platform.