Crossroads Newsletter April 2001

Radio Island Issues.

Crossroads, Duke Marine Lab. and the NC Cooperative Extension Service sponsored a meeting at the Civic Center on March 13th to discuss development of Radio Island by the NC State Ports Authority (SPA). Recent proposals to expand the Port, build an ethanol plant and site a large Liquid Natural Gas (LNG) terminal on Radio Island have caused a lot of concern among local citizens.

We believe the local governments and citizens did not have enough information to judge the value of such developments. We believe that citizens have a right and obligation to be concerned with developments of such magnitude. We also believe that local government best serves the citizens by encouraging open and free discussion with the citizens. Thus, we have scheduled public meetings to get the maximum information to the public.

The first meeting, discussion of the ethanol plant, was reported in our last newsletter. Shortly after that meeting, DFI Inc. withdrew their plans for the ethanol facility on Radio Island. Then the SPA announced a plan to lease a portion of Radio Island to El Paso Merchant Energy to build a large LNG terminal on the island.

The SPA had earlier prepared a Draft Environmental Impact Statement (DEIS) for enlarging the port on Radio Island by construction of wharves and storage sheds and dredging a wider channel. Questions raised about the DEIS should be answered when the EIS is issued but responses from the SPA are not yet available. Relatively few people participated in the discussion of the DEIS but many more became concerned with port expansion when the ethanol facility was announced. Since we believe that local government and citizens should participate in planning for major developments, Crossroads thought that we should give the SPA a chance to explain in detail their plans for expansion. As the meeting was being planned, the LNG proposal surfaced and the SPA Board of Directors granted a lease option to El Paso, which was later approved by the Council of State.

The result was that our meeting on Port expansion became more of a discussion of LNG than we had planned. Erik Stromberg, Executive Director of the NC State Ports, Richard Futrell, Chairman of the SPA Board of Directors, and Robert Hardy, a local lawyer with considerable experience in the energy industry were asked to participate.

Mr. Futrell and Mr. Stromberg reviewed the status of the SPA as an "enterprise agency", neither a private company nor a typical state agency. The object of the SPA is to stimulate economic activity in NC. They plan for operations to be self-sustaining but depend on the state for most capital expenditures. They presented data showing increasing utilization of the existing port facilities at Morehead City. Shippers need to have adequate space available on short notice if they are to utilize a port because of the large cost of delays. In other words, a port must have facilities to satisfy peak demands, not just average demand. The expansion planned and discussed in the DEIS would largely service the break-bulk type of shipping that is very important to the port. Bulk shipping of fertilizer, wood chips, etc. can be handled by the existing facility. They did not discuss the LNG terminal in detail but assured the audience that the proposal would be thoroughly examined in the EIS and permitting processes. It would, if found to be safe and suitable for Radio Island, be an economic boon to eastern North Carolina and would also produce local tax revenue.ÊÊÊÊ .

Mr. Hardy felt that the SPA had not made a sufficient case for the necessity of the port expansion and that the yearly tonnage statistics are so variable that there is no distinct trend of increasing utilization. He also felt that the SPA had made a hasty decision without full discussion when approving the El Paso proposal. He introduced data he felt showed that the proposed LNG facility should not be sited on Radio Island. Even though no major accident has occurred at an LNG facility, the "worst-case scenario" (fire occurring in the diked area containing the entire contents of a large LNG tank) described for similar facilities would need larger setbacks from populated areas than is available on Radio Island.

A letter from the Coast Guard to Board member Lynn Barker was read and gave us some indication of the probable precautions that would be taken by the Coast Guard when an LNG tanker is in the port. Judging from actions taken elsewhere under similar conditions, there would be a "safety zone" of perhaps one mile in front of and behind a tanker and 200 yards on either side for a tanker entering or leaving the port. Ships greater than 70 feet would be prohibited in the zone. When docked there would be a safety zone of 50-200 yards around the ship. Any traffic inside the zone would require Coast Guard permission but small boat traffic would generally be permitted and probably would not be affected. They emphasized that final regulations would be based on the local situation and established after consultation with all parties.

The LNG terminal.

Many questions remain as to the suitability of Radio Island for an LNG terminal. Unanswered questions include environmental effects, safety, impact on tourism and fishing, economic impact on the county and the state and restraints on boating.

Dick Bierly, in comments before the March meeting of the Coastal Resources Commission, reminded the commissioners of the environmental and safety issues surrounding the proposal and urged them to follow the approval process very closely. Crossroads and the Coastal Federation requested, through the Southern Environmental Law Center, that the Council of State require the SPA to prepare an EIS before committing to the lease option. The Council of State refused to do so but added language to the option requiring compliance with all environmental requirements.

More recently, Morehead City Commissioners annexed the State Port property on Radio Island and later modified the zoning ordinance to change the use "Bulk petroleum plant/storage" from a permitted use to a special use in the Industrial-Port zone. This will require a public hearing before the Board of Adjustment before permitting such a facility.

We plan to have another meeting specifically devoted to the LNG proposal. At a meeting with El Paso representatives, we were told that they would welcome a chance to participate in a public meeting but not until they have more specific information to share. They are committed to a full EIS. They recently engaged an engineering firm to do a project and site assessment to determine if the Radio Island site is suitable for an LNG facility, what size and shape the facility could be, etc. The result of this study would be a "concept design", which would include planning for number and size of tanks, safety zones, etc.

As the concept design is completed they intend to meet with various groups in the area to gain public input. They have established a tentative time-line for key events/checkpoints as outlined in the following memo from David Weaver of El Paso.

ÓOur goals are as follows:

March 2001 - Hire Engineering consulting firm to perform preliminary site analysis.

September 2001 - Prioritize options for facility, initiate preparation of EIS filing documents.

January-March 2002 - Submit EIS Permit application.

December 2003 - Obtain EIS Permits.
January 2004-June 2006 - Construction of facility.

All these dates are VERY preliminary, and are indicative only of our initial view that it will take approximately 1 year to plan the facility, 18-24 months to obtain permits, and 2-3 years to construct the facility. During each stage of the timeline, we will conduct meetings as part of a continuation of our informal listening tour and to begin our community education campaign. These meetings will be with state and local officials, local citizen groups and individual citizens. Our educational materials are still being prepared. As we determine what type of facility is possible, we can refine our education campaign to focus on selecting the appropriate option for Radio Island consistent with our business needs and a sincere desire to minimize impacts on the community."Ê David Weaver

Crossroads news.

Please look at the first line of your label to see your membership status.

Bruce McCutcheon, Ted Odell and Lisa Wimpfheimer were reelected Board members at the Annual Meeting.

We are grateful for the support of several recent Life Members. They include: Dr. "Pete" Peterson, Stephen Wolfe, Carl Schmidt, Cathy Hewitt Neagle, Robert and Virginia Santucci and Len and Norma McClellon. Our sincere thanks to you.

We are sorry that the meeting on Ports expansion came about so quickly that we were unable to announce it in a newsletter. Therefore we depended on ads and media publicity to inform people of the meeting. We also sent e-mail announcements to those members for whom we have e-mail addresses. If you have e-mail and we do not have your address, please let us know so we can contact you in this way. The simplest way to get us your address is to send an e-mail to: ihooper@mail.clis.com.