When (More) LNG Comes to Lake Charles: Setting the Record Straight

Published Sep 7, 2007 12:01 AM by The Maritime Executive

Last week’s recap of the June Calcasieu River Harbor Safety Committee meeting (Calcasieu River Users Want Answers as LNG Facility Nears Completion) provided insight into the ongoing differences of opinion, uncertainties and the general discourse that is involved with the advent of another LNG import facility into the port of Lake Charles, Louisiana. And although I find the subject to be fascinating in more ways than one, the piece did not draw a great deal of MarEx reader traffic (5th of 15 articles in total reads; drawing 10.07% of total clicks). The article drew even less reader reaction, with only one response received.

(Captain) Mike Miller, President of the Lake Charles Pilots Association, telephoned after reading my account of the situation, disagreed with a few points and brought illumination to a few more. We had a good conversation and after talking to him at length, I agreed that I had dropped the ball in some places, but we agreed to disagree on others. Mike was particularly disappointed that we appeared to be “beating up on the U.S. Coast Guard; on LCDR W.R. (Buddy) Reams, in particular.” On this point, we still disagree. Last week, we printed direct quotes to LCDR Ream’s comments spoken at a public meeting where matters of safety, tugs -- and yes, money -- were discussed as they related to the ship channel and the rapidly developing Sempra Cameron LNG facility. Reams’ comments, I think, speak for themselves, but Mike Miller says that there is more to the story, and LCDR Reams, than meets the eye.

Mike Miller told me last week that, “Buddy Reams has deferred to the Lake Charles Pilots on matters of safety on the Calcasieu River because we have an outstanding safety record, state-of-the-art training, the best equipment money can buy and ‘standards of care’ that are second to none in this business.” Miller went on to say that Reams has spent a considerable amount of time behind the scenes to better familiarize himself with the risks inherent with the Calcasieu River, including, but not limited to, riding numerous deep-draft vessels in varying conditions on the river. All of that, said Miller, gives Reams more than enough knowledge to make the right decisions when it comes to safety on the Calcasieu River. On that score, I’m in no position to argue with him.

For now, then, it looks like the Coast Guard has probably done its due diligence with regard to the required levels of precautions necessary in the port of Lake Charles. But when Reams says, “I haven’t done exhaustive research, but if the current practices had been applied during the simulation studies that have been run exhaustively, probably most, if not all, of the casualty scenarios would likely have been negated,” it is understandable that some might not be overwhelmed with confidence in his delivery. Nevertheless, Mike Miller was adamant when he stated, “Reams is doing an excellent job. He’s not concerned with money; only with safety.”

It is readily apparent that tugboats will be a part of the safety equation for ships passing the Sempra LNG terminal. For his part, Mike Miller doesn’t know what the big deal is all about. “Vessels are already required to take tugs on other parts of the Calcasieu River,” he said. He pointed to the two or three (depending on circumstances) tugs required for vessels passing the CITGO Terminal, which is on a bend and potentially a much more dangerous spot than the Sempra facility, situated on a straightaway. “This is a pay-as-you-go river,” added Miller, “We’ve got a new tenant on the ship channel, that’s all. CITGO doesn’t provide or pay for the tugs needed to ensure safe passage of tonnage going past their facility. Why should Sempra?” Hence, the issue of who pays for tugs is, in his mind, a non-issue.

Without a federal order or regulated navigation area (RNA) from the government, tugs deemed necessary by the local pilots will ultimately be for the account of anyone who needs to pass this terminal or any other on the Calcasieu River. CITGO seems to be the last (big) player in the region to be protesting the safety of the facility; certainly it is the most vociferous. It spent additional money, in the aftermath of almost $300,000 in simulator testing paid for by the local users, to demonstrate that tugs alone won’t mitigate the risks posed by Sempra’s new terminal design. A CITGO spokesperson told MarEx on Wednesday, “This is primarily about safety; less about the money.” Nevertheless, the company’s data, valid or not, is falling on deaf ears at this point.

According to Miller, most of the dredging and river work around the Sempra facility is complete. At this point, the pilots are taking traffic past the berth cut and the turning area opposite from the berths. The handling characteristics of deep-draft vessels as they pass the terminal are, he believes, now well known and not creating any issues for the pilots. Beyond this, he said that the pilots have always gone slowly past the area because of a shrimp dock in the immediate vicinity. In all likelihood, the same tugs used to provide service at other critical areas on the channel will be the same ones used to ensure safe passage by the Sempra Terminal. “We’ll pick them up and drop them off two miles farther down the river; that’s all,” Miller continued. The added costs will likely involve additional time and bunkers, but that’s something the users will have to negotiate themselves.

The date for the first delivery to Sempra’s LNG terminal is looming large in the windshield for all of the Calcasieu River players. It is reasonable to expect that business planners want to know what their costs are going to be so that they can perform long-range fiscal modeling for their facilities. In that respect, the Lake Charles Pilots “Standards of Care” document lets them know, in good detail, what’s to be expected.

The present situation in Lake Charles leaves current channel users with few (good) options. CITGO can hope that its simulator data will eventually sway the Coast Guard to mandate tug usage for passing traffic at the new terminal, but this is, at best, unlikely. Failing this, channel users could do the same as others, such as those faced with a similar situation in Savannah, Georgia: they could band together and simply refuse to pay the new fees. The legal option is always on the table as well. It also goes without saying that a channel user whose terminal requires -- at least in the eyes of the local pilots -- tug assist for passing traffic, is in an arguably poor position to demand that another new facility pay for the very same thing.

Planned regulations governing the RNA in First Coast Guard District waters, effective November 28, will require certain tank vessels and tug/barge combinations transiting Buzzards Bay, Massachusetts, be accompanied by escort tugs and pilots operating under a properly endorsed federal pilot’s license. This decision creates a curious contradiction, especially as the new rules relate to the situation in Lake Charles. It does make you wonder: Are pilots in Lake Charles more qualified than their counterparts in the North East? Is Buzzard’s Bay real estate prettier and more valuable than that which surrounds the Calcasieu River? What is the criteria for establishing the RNA in one location and not another?

The one question that does not need to be asked is who will pay for these tugs in Massachusetts waters, if the RNA comes to be. It won’t be the Bay State, or the Massachusetts Maritime Academy (whose beautiful campus sits directly on Buzzard’s Bay), nor will it be the swank, upscale community of Grey Gables situated directly across the bay. - MarEx

Joseph Keefe is the Managing Editor of The Maritime Executive. He can be reached with comments, questions or input on this or any other article at [email protected].