By Haley Zaremba - Oct 24, 2024, 2:00 PM CDT
Puerto Rico's ambitious clean energy goals are clashing with a growing LNG import industry, raising safety concerns and potentially hindering the expansion of rooftop solar.
New Fortress Energy's LNG operations in Puerto Rico face scrutiny over safety standards and emergency preparedness, especially in a hurricane-prone region.
While LNG imports may address short-term energy needs, the long-term focus remains on transitioning to a more sustainable and resilient renewable energy grid.
Puerto Rico’s green energy transition has been full of hurdles and shocks thanks to economic volatility, natural disasters, ambitious frontier clean energy models, and poor oversight and governance mechanisms on the part of local and federal United States institutions. Now, a liquefied natural gas (LNG) terminal could be the site of the U.S. territory’s next energy disaster.
For years, Puerto Rico’s energy security has been under extreme duress. Puerto Rico’s electrical grid has been critically under-invested in and poorly maintained for decades thanks in large part to the territory’s dire economic straits. Then, category 4 Hurricane Maria crashed into the island in September 2017, killing thousands, devastating the grid and causing the island to essentially declare bankruptcy. This tragedy led to the longest and most sweeping blackout in all of United States history, which contributed heavily to the storm’s casualties.
In the years since the devastating storm, Puerto Rico has been slowly and painfully rebuilding. Part of the island territory’s strategy to ‘build back better’ has been to institute a highly ambitious clean energy plan, which includes reaching net-zero carbon emissions economy-wide by 2050. Puerto Ricans have thrown their weight behind this plan, starting a veritable rooftop solar revolution around the island with attached energy storage, functionally creating a cutting-edge decentralized grid system that could be more resilient in future hurricane seasons.
While islanders lean into a clean energy revolution, however, mainland companies have been busily turning Puerto Rico into a major LNG port as the United States has become the largest LNG exporter in the world over the past few years. One such energy company, New Fortress Energy, has been storing LNG in tankers in Puerto Rico’s harbors, where hurricanes are a regular occurrence. Understandably, some locals are quite concerned about their safety, especially considering the fact that New Fortress got permission to waive federal safety standards for its “improvised import terminal” – a floating tanker.
The government has now ordered the company to retroactively follow the permitting process, but still under looser standards than is typical. Even with the looser standards, however, New Fortress’ tanker facility may not meet requirements. “Despite eased requirements, New Fortress has yet to submit a finalized emergency plan and has repeatedly warned investors it may not be able to secure approval from the Federal Energy Regulatory Commission,” the Huffington Post reports. A draft of the emergency plan is due in November.
In the meantime, New Fortress is busily importing ever bigger shipments of LNG to the island despite Coast Guard warnings that the company’s vessels are oversized for the harbor.
Safety standards for the construction, maintenance, and contingency plans of such projects are put in place because LNG is highly combustible and can pose major hazard risks if not properly handled. “There are very serious and unique risks for LNG above and beyond other forms of transporting hydrocarbons due to its high pressure and density,” Hailey Duncan, a policy adviser for the Pipeline Safety Trust, a non-governmental watchdog group, recently told the Huffington Post. “These risks are especially concerning when a facility is placed near people.”
Under-regulated and under-scrutinized fossil fuel operations in Puerto Rico have led to disaster in the past. In 2009, an oil refinery explosion damaged 300 homes, released 30 million gallons of oil into the ocean and wetlands, caused the evacuation of thousands, and burned for three days. The disaster happened when oil was being transported from a tanker ship to a storage facility. An investigation revealed that the project suffered from a lack of requirements to conduct a risk assessment or a thorough evaluation of an adequate emergency response plan. That tragedy took place just 10 miles away from where New Fortress is now taking similar risks.
There is certainly cause for concern that Puerto Rico is being exploited by the mainland fossil fuel industry, but the reality remains complicated. Even in the most ambitious clean energy scenario, oil and gas will likely remain important stop-gaps to prop up energy security until a reliable renewable grid can be established. However, there is a case to be made that New Fortress’ booming LNG business is actively threatening the expansion of rooftop solar, one of the island’s most important safeguards against future stresses on the grid.
While Puerto Ricans consume just a quarter of the energy that mainlanders do, the island still consumes 70% more energy than it produces. And about three-fifths of that energy comes from fossil fuels. While the United States is necessarily not in the wrong for shipping huge quantities of LNG to the island, it’s unquestionably unethical to outsource risk to the territories along with it. Federal regulations extend everywhere in the federation, including Puerto Rico.
By Haley Zaremba for Oilprice.com
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