(31a) Defining Community and Economic Benefits Associated with Large Energy Infrastructure Projects: LNG Case Study (Webcast Not Available)

Modern, large scale infrastructure systems afford society with numerous advantages that contribute toward economic attainment and quality of life. Large infrastructure projects also encompass substantial risks and uncertainties ranging from engineering and commercial feasibility to the extent to which public support can be attracted and sustained.

The CEE-UT research team undertook a study effort to develop a methodology and approach that could improve identification of benefits and costs as well as associated issues for large energy infrastructure projects. Our study was centered on 20 LNG import receiving and regasification terminals in various stages of project development (from initial proposal to completed projects) and associated infrastructure in five geographic regions of North America (United States and Canada): Pacific Northwest; California; Gulf Coast; Florida; and Northeast. The CEE-UT team collected and evaluated demographic and economic background data for all of the projects in our sample. The regulatory process was used to establish a study timeline. Our study protocol mainly encompassed the U.S. federal regulatory process (U.S. Federal Energy Regulatory Commission, FERC, for onshore licenses and US Maritime Administration/U.S. Coast Guard, MARAD/USCG, for offshore licenses) and federal/provincial coordination through the environment agencies in Canada. Based on a pilot test of our study methodology we identified ten issue dimensions: safety/security, wetlands, fisheries, energy costs, roads, taxes, employment, air emissions, property value and other/intangibles. We defined six stakeholder groupings to capture geographic dispersion: Immediate Site-Host Community; Waterway Community; Local Community (city/county); Greater Community (state/city or province/city); National Community (federal); External Stakeholders. We disaggregated stakeholders into these distinct groupings based on proximity to, and likelihood of being affected by, LNG import terminal facilities. Extensive information was collected from regulatory dockets and other public domain sources to build data templates. We examined stakeholder positions across the key issue dimensions identified from the regulatory process and based on pre-study surveys and analysis, including input from direct observation of site locations by CEE-UT personnel and other, external sources and experts.

From the project management perspective, it is crucial to understand and manage stakeholder perceptions. Proper and timely management of the issues makes it possible to avoid project delays, giving a higher probability of keeping the EPC costs within project resources and ensures project integrity.

Conclusions -

The study revealed several important trends in perception of large energy infrastructure projects. For instance, it appears that there are regional differences in perception of benefits and costs associated with such projects. As other projects are proposed or approved in a region, stakeholder valuation of energy cost benefits decreases. For the projects studied, stakeholder groups that were indifferent on some dimensions and perceived costs on the rest oppose the project.

The study also provided various strategies for addressing stakeholder concerns.

References Cited -

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4. Susskind, Lawrence E., and Stephen R. Cassella. ?The Danger of Preemption Legislation: The Case of LNG Facility Siting in California.? In Resolving Locational Conflict, ed. Robert W. Lake. 1987, New Brunswick, N.J.: Rutgers University Center of Urban Policy Research.