Freeport McMoRan Energy L.L.C. Main Pass Energy Hub Liquefied Natural Gas Deepwater Port License Application Amendment; Final Public Hearings, Environmental Assessment and Draft Finding of No Significant Impact

AGENCY:

Maritime Administration, DOT.

ACTION:

Notice of availability; notice of public hearings; request for comments.

SUMMARY:

The Maritime Administration (MARAD) and U.S. Coast Guard announce the availability of the Environmental Assessment (EA) and Draft Finding of No Significant Impact (FONSI) on the Main Pass Energy Hub (MPEH) Deepwater Port Amended License Application. We are also announcing the dates and locations of public hearings for input regarding the approval or denial of the license application.

The application and the amendment describe a project that would be located in the Gulf of Mexico in Main Pass Lease Block 299 (MP 299), approximately 16 miles southeast of Venice, Louisiana. Draft and final Environmental Impact Statements (EIS) evaluating the original application were published on June 17, 2005 and March 14, 2006, respectively.

The Main Pass Energy Hub Deepwater Port License Application originally proposed the use of “open-loop” open rack vaporization (ORV). In the amended application, the applicant is proposing a “closed-loop” system using submerged combustion vaporization with selective catalytic reduction (SCV/SCR). Though similar, a more generic SCV/SCR system was analyzed in detail in the Final EIS (FEIS) as an alternative. The amended application provides expanded and refined design information regarding the proposed changes. The EA was prepared to provide analysis of the actual SCV/SCR design now being proposed and to determine if there were any significant impacts resulting from this change in proposed regassification technology in addition to or different from those previously assessed in the FEIS. The original application and environmental analysis contained in the FEIS still apply, including facilities, offshore and onshore pipelines, and salt cavern gas storage. Previous comments on the FEIS and application will continue to be considered in this process and need not be repeated. Based upon the EA, we have determined that the project changes as proposed in this amended application will not have a significant impact on the environment and we are therefore issuing a Draft Finding of No Significant Impact (FONSI) for public review and comment.

DATES:

Public hearings will be held in Grand Bay, Alabama on October 3, 2006; Pascagoula, Mississippi on October 4, 2006; and New Orleans, Louisiana, on October 5, 2006. Each public hearing will begin at 6 p.m. and end at 8 p.m., and will be preceded by an informational open house from 4:30 p.m. to 6 p.m. The public hearings may end later than the stated time, depending on the number of attendees requesting to speak.

Material submitted in response to the request for comments must reach the Docket Management Facility on or before November 6, 2006, which is the end of the 45 day public comment period. Federal and State agencies must submit comments on the application as amended, recommended conditions for licensing, or letters of no objection by November 20, 2006 (45 days after the final public hearings). Also by November 20, 2006 the Governors of the adjacent coastal states of Alabama, Louisiana, and Mississippi may approve, disapprove, or notify MARAD of inconsistencies with State programs relating to environmental protection, land and water use, and coastal zone management, in which case MARAD will condition any license granted to make it consistent with state programs. MARAD will issue a record of decision (ROD) to approve, approve with conditions, or deny the DWP license application by January 3, 2007 (90 days after the final public hearing).

ADDRESSES:

The first public hearing and informational open house will be held on October 3, 2006, at the Grand Bay St. Elmo Community Center, 11610 Highway 90 West, Grand Bay, Alabama, phone: 251-865-4010. The second public hearing and informational open house will be held on October 4, 2006, at the La Font Inn, 2703 Denny Avenue, Pascagoula, Mississippi, phone: 228-762-7111. The third public hearing and informational open house will be held on October 5, 2006, at the New Orleans Marriott, 555 Canal Street, New Orleans, Louisiana, phone: 504-581-1000.

A copy of the EA, FEIS, license application, license application amendment, comments and associated documentation is available for view at the DOT's docket management Web site: http://dms.dot.gov under docket number 17696. Copies of the EA and FEIS are also available for review at the Pascagoula Jackson-George Regional Headquarters Public Library, Pascagoula, MS, 228-769-3227 ; Bayou La Batre City Public Library, AL, 251-824-4213; Mobile Public Main Library, AL, 251-208-7106; New Orleans Public Main Library, LA, 504-529-7989.

Address docket submissions for USCG-2004-17696 to: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590-0001.

The Docket Management Facility accepts hand-delivered submissions and makes docket contents available for public inspection and copying, at this address, in room PL-401, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Facility's telephone is 202-366-9329, its fax is 202-493-2251, and its Web site for electronic submissions or for electronic access to docket contents is http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT:

Roddy C. Bachman, U.S. Coast Guard, telephone: 202-372-1451, e-mail: Roddy.C.Bachman@uscg.mil. If you have questions on viewing the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone: 202-493-0402.

SUPPLEMENTARY INFORMATION:

Public Hearings, Open Houses and Request for Comments

We invite you to learn about the proposed deepwater port at the informational open houses. We also invite you to comment at the public hearings on the proposed action and the evaluation contained in the FEIS, EA, the license application and amendment. Relevant comments previously submitted on the FEIS and the application will continue to be considered in the license application process and need not be resubmitted. Speaker registration will be available at the door. In order to allow everyone a chance to speak, we may limit speaker time, or extend the hearing hours, or both. You must identify yourself, and any organization you represent, by name. Your remarks will be recorded or transcribed for inclusion in the public docket.

You may submit written material at the public hearing, either in place of or in addition to speaking. Written material must include your name and address, and will be included in the public docket. Public docket materials will be made available to the public on the Docket Management Facility's Docket Management System (DMS). See ”Request for Comments” for information about DMS and your rights under the Privacy Act.

If you plan to attend either the open house or the public hearing, and need special assistance such as sign language interpretation or other reasonable accommodation, please notify the Coast Guard (see FOR FURTHER INFORMATION CONTACT) at least 3 business days in advance. Include your contact information as well as information about your specific needs.

You can submit material to the Docket Management Facility during the public comment period (see DATES). MARAD and the Coast Guard will consider all comments submitted during the public comment period. Submissions should include:

• Docket number USCG-2004-17696.
• Your name and address.
• Your reasons for making each comment or for bringing information to our attention.

Submit comments or material using only one of the following methods:

• Electronic submission to DMS, http://dms.dot.gov.
• Fax, mail, or hand delivery to the Docket Management Facility (see ADDRESSES). Faxed or hand delivered submissions must be unbound, no larger than 81/2 by 11 inches, and suitable for copying and electronic scanning. If you mail your submission and want to know when it reaches the Facility, include a stamped, self-addressed postcard or envelope. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the DMS Web site ( http://dms.dot.gov ), and will include any personal information you provide. Therefore, submitting this information makes it public. You may wish to read the Privacy Act notice that is available on the DMS Web site, or the Department of Transportation Privacy Act Statement that appeared in the Federal Register on April 11, 2000 (65 FR 19477).

You may view docket submissions at the Docket Management Facility (see ADDRESSES), or electronically on the DMS Web site.

Proposed Action

We published a notice of application for the proposed Main Pass Energy Hub deepwater port at 69 FR 32363 (June 9, 2004); a notice of intent to prepare an EIS at 69 FR 45337 (July 29, 2004); announced the availability of the draft EIS (DEIS) at 70 FR 35277 (June 17, 2005); the Final EIS at 71 FR 13213 (March 14, 2006); and the amended application, intent to prepare an EA, and request for comments at 71 FR 45899 (August 10, 2006). The proposed action requiring environmental review is the Federal licensing decision on the proposed deepwater port application as originally submitted and subsequently amended.

Alternatives Being Considered

The alternatives available for this action are: (1) License the facility according to the application as amended, (2) license the facility according to the application as amended with conditions (including conditions designed to mitigate environmental impact), and (3) deny the application, which for purposes of environmental review is the “no-action” alternative. These alternatives are more fully discussed in the FEIS and EA.

Background

MARAD and the Coast Guard, as the lead Federal agencies for the license review process under the Deepwater Port Act (DWPA) and the National Environmental Policy Act (NEPA), completed a Draft EIS that was released on June 17, 2005. A Final EIS was released on March 14, 2006. To seek public involvement and comply with the requirements of the DWPA and NEPA, open houses and public hearings were held in all adjacent coastal states for: (1) Scoping, (2) the DEIS, and (3) the FEIS in Grand Bay, Alabama; New Orleans, Louisiana; and Pascagoula, Mississippi.

During this public review process, extensive public and agency comments were submitted that discussed the project and both “open-loop” ORV and “closed-loop” SCV technologies as reasonable alternatives for the regasification technology. For this and other reasons, the Final EIS included detailed discussion and evaluation of both SCV and ORV technologies.

On May 5, 2005, Governor Blanco of Louisiana, exercising authority granted under the DWPA, disapproved the Main Pass application based on the use of ORV. In her letter of disapproval she indicated support for closed-loop systems. On May 31, 2006, the Coast Guard and MARAD received an amendment to the original application from the applicant. The applicant in this amended application now proposes to change the project to use SCV in place of ORV. On June 21, 2006, the Administrator of MARAD issued a ROD stating that a license for the project as originally planned would not be issued and no further action would be taken on the application as originally submitted. MARAD and the Coast Guard further determined that they would process the amended application according to the applicable provisions of the DWPA and NEPA.

The application amendment contains the actual SCV/SCR design that would be used. Because a more generic SCV/SCR system was fully evaluated as a reasonable alternative in sufficient detail in the EIS to provide an opportunity for in-depth public review, the Coast Guard and MARAD determined, in coordination with other involved Federal agencies, including the U.S. Environmental Protection Agency, that an Environmental Assessment that incorporates by reference and tiers from the FEIS would provide the appropriate level of NEPA review and analysis. After the EA was completed, we determined that a FONSI for the amended application was applicable for the action and that the applicant's change in preferred regassification technology from ORV to SCV/SCR that was previously evaluated in the FEIS would not have a significant effect on the environment in addition to or different from those impacts previously assessed and disclosed in the FEIS.

The EA describes the project changes and focuses on the evaluation of the amendment, incorporating by reference and tiering from the FEIS. Our review indicates the SCV/SCR proposal provides a reduction in impacts in several key resource areas. In addition, a number of comments from the public, and from State and Federal agencies discussed and supported closed-loop SCV as a preferred alternative.

On August 10, 2006, (71 FR 45899) we provided notice of the availability of the amended application; the intent to prepare an EA; and request for comments.

Summary of the Application Amendment

In the original application, the applicant proposed open rack vaporization (ORV) as their preferred alternative. In this application amendment, the applicant is now proposing a “closed-loop” vaporization system known as submerged combustion vaporization with selective catalytic reduction (SCV/SCR). This change would eliminate seawater usage; replace water-cooled generators with low emission, air-cooled gas turbine generators; propose use of sodium hydroxide to neutralize the SCV process water; would move Platform No. 3 from its current position to the Terminal to support vaporization equipment; and make other minor changes to Terminal operations and infrastructure to support SCV/SCR operations. Proposed non-Terminal construction and operations were not changed by the amended application. All other aspects of the original application and environmental analysis contained in the EIS continue to apply, including facilities, pipelines, and salt cavern gas storage.

SCV/SCR vaporization was analyzed in detail in the EIS as an alternative technology (EIS Option 1d). In summary, the key differences in this proposed change from the original ORV proposal (EIS Option 2b) include:

• Elimination of 134 million gallons per day of seawater intake and discharge. Elimination of seawater intakes and outfall structures. The SCV/SCR system uses no seawater.
• Elimination of potential biological impacts from vaporization seawater intake due to impingement or entrainment and reduced discharge temperature plume.
• Elimination of the use of sodium hypochlorite chlorination requirements.
• Discharge of 345,000 gallons per day (at peak 1.6 bcfd vaporization) process water produced through SCV/SCR operation. Ph would be managed between 6 and 9 through injection of 20% by weight caustic soda solution (sodium hydroxide) into the stream. The neutralization reaction produces sodium carbonate and water. This would also require the addition of a 50,000 gallon storage tank.
• Installation of eight SCV/SCR units (EIS Option 1d) as replacements for the six ORV units previously proposed (EIS Option 2b).
• Relocation and remodeling the existing MPEH Platform No. 3 to a position north of Bridge 11 between Platforms BS-8 and BS-Y7 to accommodate three of the eight SCV/SCR vaporizers and three gas turbine generators relocated from Platform No. 1. Existing well conductors and jacket main piles would be removed and the jacket installed on the new site. Structural and system modifications to the deck of existing Platform BS-8 and existing Bridge No. 11 would also be required.
• Injection of 240 gallons per day of 19.5% (by weight) aqueous ammonia solution into the gas stream of the SCR. This would require installation of a 7200 gallon tank.
• Operational air emissions of the SCV/SCR amendment are reduced from the original proposal. Total emissions attributed to construction over 5 years would be approximately 7% higher than the original proposal due to the need to move one platform.
• Direct burning of 1-1.5% of natural gas for LNG vaporization—removing this resource from the nation's energy supply.

Federal Energy Regulatory Commission Certificate of Public Convenience and Necessity

The onshore portion of this project shoreward of the mean high water line falls under the jurisdiction of the Federal Energy Regulatory Commission (FERC). Freeport-McMoRan has received FERC authorization to construct and operate the Coden pipeline conditioned on receiving the license for the DWP from MARAD (FERC Order Issuing Certificate issued May 18, 2006, FERC Docket Nos. CP04-68 and CP04-69). This is the 5.1 mile Bayou La Batre alternative in the FEIS.

Department of Army Permits

On July 22, 2005, the New Orleans District, Army Corps of Engineers issued a joint public notice advising all interested parties of the proposed activity for which Department of the Army Section 404 and Section 10 permits are being sought, and solicited comments and information necessary to evaluate the probable impact on the public interest. This comment period is now closed. As this amendment falls under the environmental review of the DWPA, and not Section 10 of the Rivers and Harbors Act and does not change the Section 404 and Section 10 reviews, an additional comment period is not required by the Army Corps of Engineers.