Trump’s push to fast track LNG by rail collides with LNG projects in Ukraine

By Ann Henson Feltgen and Dan Christensen, Florida Bulldog.org

President Trump’s effort to ramp up rail transport of volatile Liquified Natural Gas in the U.S. collided spectacularly last week with his administration’s push to export LNG to EasternEurope.

The Associated Press disclosed plans by a “circle of businessmen and Republican donors” with ties to the president and his personal lawyer, Rudy Giuliani, to install friendly new management at Ukraine’s state gas company in order to “steer lucrative contracts to companies controlled by Trump allies.”

U.S. Energy Secretary Rick Perry was among those who sought to replace board members at Naftogaz, Ukraine’s multi-billion dollar national oil and gas company, whose “slate of candidates included a fellow Texan who is one of Perry’s past political donors,” AP reported. Perry was governor of Texas from 2000 to 2015.

Behind the Naftogaz plan were two Soviet-born, South Florida entrepreneurs, Lev Parnas and Igor Fruman, and Palm Beach County oil baron and longtime GOP donor Harry Sargeant III, according to the AP.

Parnas and Fruman are Giuliani’s business associates who sought to investigate Democratic presidential hopeful Joe Biden and his son, Hunter Biden, who for five years was paid to serve on the board of another Ukrainian energy company, Burisma. Parnas and Fruman are now key figures in the House impeachment inquiry of the president that officially began last month after it became known that Trump allegedly pressured Ukraine President Volodymyr Zelensky last summer for favors that would advance Trump’s personal interests. There is no credible evidence of wrong-doing by the former vice president or his son.

Arrests and one-way tickets

Parnas and Fruman were arrested Wednesday at Dulles International Airport in Virginia on charges of making illegal campaign contributions. Officials said they had one-way tickets out of the country.

Sargeant quickly issued a statement through PR Newswire that he had been “unfairly and inaccurately” portrayed in news stories “as having involvement in Ukraine business affairs. Mr. Sargeant conducts no business of any kind in the Ukraine and has not visited Ukraine, even as a tourist, in well over a decade.”

The indictment of Paras and Fruman said the pair set up and used their company, Global Energy Producers, to make large political contributions in the company’s name, not in their names. Among those donations was $50,000 to Friends of Ron DeSantis  in June 2018.  Florida Gov. DeSantis has announced he will instruct his political action committee to return the donation.

The indictment does not mention the DeSantis contribution. Likewise, it does not mention Fruman’s $15,000 contribution to Florida Sen. Rick Scott’s Victory Fund, or another $5,400 Fruman gave to Scott’s campaign. Those contributions were made on May 25, 2018. Scott has announced no plans to return those funds.

Meanwhile, House Democrats sent a subpoena Thursday to Energy Secretary Perry demanding documents about Trump’s July 25^th phone call to Zelensky in which he asked for help investigating Biden, records relating to Zelensky’s May inauguration at which Perry led the U.S. delegation, and records related to “proposed or actual transactions, investments, or projects relating to liquified natural gas (LNG) in Ukraine.”

Trump ordered the fast-tracking of LNG production and transportation by rail in the U.S. in an executive order issued in April. Currently, without a special permit LNG can be shipped only by truck, a practice that many say is equally dangerous.

The danger of LNG

LNG is natural gas in a compact liquid state, allowing more of it to be shipped per load.  If the shipping tank is punctured, however, the highly chilled gas would stream out on the ground and form a vapor cloud that could explode. If an explosion happened in an urban area, like where LNG transport is allowed along the Florida East Coast Railway corridor in Miami-Dade, Broward and Palm Beach counties, it could prove disastrous.

Even as allegations of corruption and political intrigue unfold, efforts are underway in Congress to slow down or stop such a speed-up.

Two Democratic congressmen from opposite sides of the country — Reps. Peter DeFazio, D-OR, and Tom Malinowski D-NJ — have introduced a bill that if passed would require the government to evaluate the safety, security and environmental risks of transporting LNG by rail.

The bill, H.R. 4306, was introduced Sept.12 and the following day was referred to the House Subcommittee on Railroads, Pipelines and Hazardous Materials. No date has been set for the matter to be heard.

The bill would mandate:

• physical testing of rail tank cars, including, at a minimum, the DOT-113 (the car proposed for hauling LNG) specifications to ensure such rail tank cars are able to withstand the effects of an accident or impact and prevent or mitigate the release of liquified natural gas;
• analyzing multiple release scenarios, including derailments, front-end, rear-end and side-impact collisions, grade-crossing collisions, punctures and impact of an incendiary device, at a minimum of three speeds of travel with a sufficient range of speeds to evaluate the safety, security and environmental risks posed;
• examining the effects of exposure to climate conditions across rail networks, including temperature, humidity and any other factors that the administrator of the Federal Railroad Administration determines could influence performance of the inner or outer walls of rail tank cars.

The bill lists other factors to consider during the evaluation, such as speed and route restrictions, the impact on the number of homes and structures that would be endangered by a discharge in rural, suburban and urban environments and how first responders might respond to a discharge, including the extent to which specialized equipment or training would be required and the cost to communities for acquiring any necessary equipment or training.

Worry about Trump’s plan

DeFazio serves as the chairman of the Committee on Transportation and Infrastructure and has been worried about Trump’s plan, said a congressional staff member. He grew up in the Pacific Northwest and watched as trains speed by.

“There’s been long oil trains barreling through towns without any updated rules and regulations,” said a congressional staffer, adding that the railroad industry “finally got their act together and developed safer rail cars. However, there has been no research on LNG trains, no public information, no say by the public in the matter or knowledge of what’s going on for communities and residents close to the train tracks. The administration is trying to slip this one through.”

In a press release announcing the bill, Malinowski added that any movement of LNG in this country should be closely monitored with the highest possible safety measures in place, particularly through a densely populated state like New Jersey.

“The proposed movement of LNG by freight rail companies that are running longer and longer trains with fewer and fewer engineers presents substantial safety risks to communities through which these trains pass,” he said.

He added that a fire chief recently told him that a railcar spill involving LNG would require him to evacuate his entire town of nearly 15,000 people.

Neither of these congressmen is for or against LNG, the congressional staffer said. “They are coming from a viewpoint of safety.”

Florida lawmakers mum

Florida Bulldog also contacted the congressional offices for Florida Reps. Frederica Wilson (D), Debbie Mucarsel-Powell (D) and Daniel Webster (R) for comment on the bill. All three serve on the Transportation and Infrastructure Committee.  

Joyce Jones, communications director for Wilson, did not respond to three emails and two phone calls. Sebastian Silva, communications director for Mucarsel-Powell, sent an email stating the congresswoman would not be able to comment. Jaryn Emhof, Webster’s communication director, said the congressman did not have time to comment.

However, Fred Millar, a vocal expert on LNG and chemical engineering, said he believed the bill could pass the House but “the Senate will ignore it.” 

A week after H.R. 4306 was introduced to Congress, the Federal Energy Regulatory Commission approved Crowley Maritime and Eagle LNG’s proposal to construct and operate an LNG plant in Jacksonville, but not without strings attached.

The approval came with 130 stipulations and a dissenting vote by Commissioner Richard Glick, who stated the order violates both the Natural Gas Act and the National Environmental Policy Act.

“The commission is again refusing to consider the consequences its actions have for climate change,” he wrote about his dissenting vote. He chided the commission: “Claiming that a project has no significant environmental impacts while at the same time refusing to assess the significance of the project’s impact on the most important environmental issue of our time is not reasoned decision making.”

Eagle LNG is completing this LNG export plant in Jacksonville on the St. Johns River north of JAXPORT. The new plant will have capacity to produce 1.5 million LNG gallons per day with a 12 million-gallon storage tank, a marine jetty and road tanker loading bay. It will supply LNG for power generation to the Caribbean islands plus domestic fuel and power markets. The company expects to begin operations in 2020.