On the menu today: A terrible explosion at a liquefied-natural-gas plant and export terminal in Texas earlier this month might have been an accident — or it may be connected to Russian military intelligence, which would have all kinds of disturbing ramifications. Also, President Biden, returning from one of his four houses, declares, “You know, if you’re going out and buying a yacht, it doesn’t help the economy a whole lot.” Unsurprisingly, that’s not true.
A Russian Connection?
Tom Rogan of the Washington Examiner might — with an emphasis on might — have one of the biggest scoops of the year: a possible link between Russian military intelligence and an explosion at a liquefied-natural-gas (LNG) plant and export terminal on Quintana Island, near Houston, on June 8.
Rogan writes: “According to two sources, around the time of Russia’s late February invasion of Ukraine, a cyber unit of Russia’s GRU military intelligence service again conducted targeting-reconnaissance operations against a major U.S. liquefied natural gas exporter, Freeport LNG. U.S. LNG exports have long been a priority concern for Russia, viewed by Russian President Vladimir Putin as a means for the United States to undercut Russia’s domination of the European gas market.”
The explosion was serious enough to shut down Freeport LNG’s operations completely for three months and will partially disrupt operations for the rest of the year. Freeport LNG is one of seven LNG export facilities currently operating in the U.S., handling about 17 percent of all U.S. LNG processing. According to CNN, about 80 percent of the plant’s exports went to Europe.
Here’s the company’s account of the event, released in a statement June 14:
At approximately 11:40AM CT on June 8, 2022, an incident occurred at the Freeport LNG liquefaction plant on Quintana Island, Texas that resulted in the release of LNG, leading to the formation and ignition of a natural gas vapor cloud, and subsequent fire at the facility. As reported previously, there were no injuries, and at no time did the incident pose a threat to the surrounding community. In accordance with Freeport LNG’s safety design parameters, the LNG vapor cloud dispersion and ignition thereof were at all times contained within the fence line of the liquefaction facility, lasting approximately 10 seconds.
The fire and associated smoke visible thereafter were from the burning of materials in and around the location where the incident occurred, such as piping insulation and cabling. With the assistance of local area emergency response personnel, the resultant fire was extinguished approximately 40 minutes after the initial incident. While the burning of those materials resulted in carbon monoxide, nitrous oxide, particulate matter, sulfur dioxide and volatile organic compound emissions, these were of limited quantity due to the short duration of the fire and not at levels that posed any immediate risk to Freeport LNG personnel or the surrounding community. There was no release of any other chemicals or substances from the plant during the event. Water used to suppress the subsequent fire was captured on site and will be tested and confirmed free of any harmful contaminants before being released or removed for proper disposal.
The incident occurred in pipe racks that support the transfer of LNG from the facility’s LNG storage tank area to the terminal’s dock facilities located on the intracoastal (i.e., north) side of Freeport LNG’s dock basin. None of the liquefaction trains, LNG storage tanks, dock facilities, or LNG process areas were impacted. In coordination with local, state and federal officials, Freeport LNG’s investigation into the cause of the incident, and what steps are necessary to safely resume liquefaction operations, is underway. Preliminary observations suggest that the incident resulted from the overpressure and rupture of a segment of an LNG transfer line, leading to the rapid flashing of LNG and the release and ignition of the natural gas vapor cloud. Additional investigation is underway to determine the underlying precipitating events that enabled the overpressure conditions in the LNG piping.
At this time, completion of all necessary repairs and a return to full plant operations is not expected until late 2022. Given the relatively contained area of the facility physically impacted by the incident, a resumption of partial operations is targeted to be achieved in approximately 90 days, once the safety and security of doing so can be assured, and all regulatory clearances are obtained.
“The June 8 disruption had an immediate impact in spiking already soaring European gas prices and has reinforced Russia’s ability to hold gas supplies to Europe at risk in retaliation for the European Union sanctions imposed on Russia over the war in Ukraine,” Rogan writes, noting that “U.S. LNG futures have fallen significantly since the explosion.” He continues: “One source tells me that the FBI is investigating the cause of the explosion. Responding to a question as to whether the FBI and its Cyber Division were involved in the investigation, the FBI told the Washington Examiner, ‘we can neither confirm nor deny the existence of an investigation into this matter.’”
The timing, scale, and long-term impact of the explosion certainly benefited the interests of the Russian government. But it is worth keeping in mind that this facility has had other accidents in recent history, according to EnergyWire:
Before last week’s blast, federal inspectors had conducted six “failure investigations” of the operation since the beginning of 2015, according to federal records reviewed by E&E News. One opened just last month when, according to a National Response Center report, a spill of 100 gallons of triethylene glycol sent an employee to the hospital.
Freeport has been hit with 11 enforcement actions from the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) since early 2015, agency records show, more than any other Gulf Coast LNG facility.
Problems at the facility have affected shipments and customers, as well. Last year, industry media reported that persistent concerns about the quality of gas going into the plant and loading issues caused Freeport to reduce the number of cargoes available for export.
The explosion last week was the fourth incident reported to PHMSA since mid-2019 at the plant, which began operations in 2008 as an import terminal. The site began exporting gas in 2019.
A safety expert called the frequency of incidents “alarming,” and possibly a sign of poor planning.
“LNG is a beast when it comes to hazard and particularly fire and explosion,” said Faisal Khan, director of the Mary Kay O’Connor Process Safety Center at Texas A&M University. “It can easily escalate.”
The emergency sirens in Freeport were not activated during the fire, but that’s not because of hacking or something nefarious; the company and local authorities apparently concluded there was no danger to the surrounding community. Tabitha Ray Walles, a spokesperson for Community Awareness and Emergency Response (CAER), told a local-news outlet via email that “the CAER community notification systems — such as the siren system — were not activated because there was no community impact or action required. The sirens are operational and are currently being updated as needed. CAER evaluates its effectiveness on an ongoing basis.”
Local columnist Michael Morris expressed frustration at how little information was shared with the surrounding residents during the emergency:
It was no secret around Southern Brazoria County that a significant incident had occurred around 11:30 a.m. that day. The bevy of emergency vehicles streaming to the Freeport LNG site from as far as Pearland were a good indication, and even if someone missed that parade, the black plume rising from Quintana gave it away.
Speculation was rampant on social media, including people claiming workers had been injured or killed, which wasn’t true. We were told by trusted sources a full evacuation of the island was underway when it wasn’t. The same applies to word of Quintana residents being told to shelter in place.
CAER’s response failed to immediately address any of those concerns, referring any queries to news releases from Freeport LNG. That’s also all people got from the organization’s social media page.
Rogan further notes: “Two LNG pipeline experts I talked to, who both asked to remain anonymous due to potential retaliatory damage to their business interests, say that pipeline corrosion and other material failures can cause critical incidents.” But for Rogan, “the FBI’s investigative involvement, the specific nature of this explosion, and the scale of damage incurred do raise major questions.” The experts he spoke with “suggested that piping from a storage tank to a terminal, as in this explosion, should have extensive safeguards to prevent overpressure events,” with one of them “highly confident that control of pipeline flows would be undertaken from a networked control facility.”
Last May, a Russian hacker executed a ransomware attack that forced a major U.S. fuel pipeline to shut down for days. In June, President Biden met with Vladimir Putin and told him certain critical infrastructure should be “off-limits” to cyberattacks, giving him a list of 16 sectors designated as critical by the U.S. Department of Homeland Security, including telecommunications, health care, food, and energy.
If the explosion at Freeport LNG was not accidental but the result of hacking or some other form of sabotage carried out by Russia’s GRU military intelligence, then Vladimir Putin has done more than thumb his nose at Joe Biden’s stern warnings — he’s attacked American soil and effectively declared war.
Biden Doesn’t Know What He’s Talking About, Part 1 Million
Monday, before returning to the White House from his beach house in Delaware, President Biden said:
We also can move in a direction that we can provide for the tax — increasing the tax — taxes on those in the — in the corporate area, as well as the individuals as it relates to Trump’s tax cut, which is inflation. You know, if you’re going out and buying a yacht, it doesn’t help the economy a whole lot.
Actually, almost all of the yachts purchased by Americans in any given year are made right here in the U.S. by an industry with an estimated value of around $3.2 billion. Ninety-five percent of all boats purchased by Americans are made in the U.S., and U.S. marine manufacturing supports an estimated 691,000 direct and indirect jobs and 35,000 American businesses across the country, according to the National Marine Manufacturers Association. According to the U.S. Department of Commerce, “outdoor recreation accounts for 1.8 percent of U.S. GDP, generating $689 billion in gross economic output, of which recreational boating and fishing is the single largest segment, contributing nearly $31 billion in gross output and supporting 4.3 million American jobs.”
Those allegedly snobby and insufferable millionaires and billionaires who buy the yachts are not the ones who build the yachts, and they rarely are the ones performing upkeep and maintenance. This is ignorant, knee-jerk class warfare coming from a man who owns four houses, and who was returning to D.C. from one of them — a 4,800-square-foot vacation home in Rehoboth Beach that he purchased for $2.74 million.
ADDENDUM: In case you missed it yesterday, we will know at the end of July whether the GDP numbers indicate the U.S. is in a recession. Judging by the assessments of the Federal Reserve banks . . . the outlook is not good.