Monday, August 9, 2004 - Dow Community Advisory Panel Minutes

The Dow Community Advisory Panel met on August 9, 2004 at 6:00 p.m. at the Dow Conference Center in Plaquemine, Louisiana.

After the facilitator welcomed those present, the minutes of the June 14, 2004 meeting were approved by the panel.

Presentation on Liquefied Natural Gas Development in Louisiana
Dr. David E. Dismukes, Center for Energy Studies, LSU, stated that through the efforts of Governor Blanco, the Department of Economic Development, and Create New Orleans, Inc., he has been given the opportunity to travel around the state to talk about liquefied natural gas (LNG), its problems and effects on our economy. He explained that LNG is a gas that has been supercooled to a liquid form for transportation from areas all over the world. Since natural gas prices are so high in the U.S., it makes sense to transport the gas from other areas of the world to supplement the U.S.'s natural gas supply.

LNG regasification facilities will represent a major capital investment for Louisiana. Louisiana has energy intensive users of natural gas and LNG will expand a vital energy resource needed to preserve these industries. The development of LNG is an important national energy concern in which Louisiana can make a significant contribution. LNG plants in Louisiana will have a potential $2.2 billion impact on the economy with 14,000 jobs associated with their construction. The pipeline systems in Louisiana were built during the 1960's and 1970's and are utilized less each year. Construction of these LNG facilities will help to bring back the use of LNG. If all of the proposed facilities are developed, there could be as much as a 237% increase in gas exports volumes through the existing pipeline system. Potentially, 3,500 jobs could be associated with the construction of these LNG facilities.

Natural gas is currently used in industry for steam, heating, feedstock, and power. If the current practices are not changed, the economy will continue to erode. The building of extensive LNG plants (15 +) will cause the price of natural gas to decrease to $3.50-$4.00 per cubic foot. The creation of 6-12 new plants will cause a loss of jobs. The creation of 6 or fewer plants will cause a decrease of 61,000 jobs in Louisiana. LNG facilities are important to government and the petrochemical industry.

Louisiana is second only to Texas in the production of natural gas in the U.S. It is the third largest user of natural gas, as industrial plants are big user of natural gas. The price of natural gas has steadily increased over the past few years. Over the past 2 winters, Louisiana industries have lost ½ billion dollars because of high natural gas prices. There is a correlation between high gas prices and declining employment. Since 1997, 4,000 industrial jobs have been lost.

LNG is natural gas that has been cooled to a liquid form. It is odorless, colorless, non-corrosive, and non-toxic. The weight of LNG is 45% that of water and it reduces it volume by a factor of 610.

Russia, Saudia Arabia, Iran, and Qatar have the largest reserves of natural gas in the world. One LNG tanker carries enough fuel to handle 51,000 residential customers and 1 industrial plant for a full year. It takes about 1 day to fill each tanker. Bringing in an extra supply of LNG from other countries will bring the cost down here in the U.S.

Natural gas is exported to Japan from Alaska. There is no pipeline system in place to transport gas from Alaska to Louisiana.

Plans are being made to build 40 LNG plants in the U.S. Several of these are planned for Louisiana because of the infrastructure and the large market for LNG. The Gulf Coast has a lower population density than other areas being considered for LNG facility sites and permitting laws are better in the Gulf area. At least 75% of all the industrial facilities in Louisiana are fired by natural gas. Louisiana uses almost as much natural gas as China does.

Additional information on LNG can be obtained at www.enrg.lsu.edu

Answers to Questions and Comments Included the Following:

1. Louisiana is the second largest producer of natural gas (after Texas) and supplies the U.S. with 1/3 of its natural gas needs. The difference in natural gas prices here in Louisiana as compared to other states is not representative of the amount of natural gas provided by Louisiana to the rest of the country. Louisiana should be getting a better break.
2. A natural gas facility is located in Lake Charles. A facility in Hackberry has been approved, and one at Sabine Pass, LA is proposed. These new facilities are planned to become operational in 2007-2008. Additionally, there are several other facilities offshore (Chevron Texaco, Freeport McMoran, Shell, Conoco Phillips).
3. It takes approximately 24 months to complete a liquefied natural gas plant expansion and 4-5 years to build a new plant.
4. Natural gas can be a safety issue if it burns; however, the probability of this happening is very small. Natural gas is more environmentally friendly than oil.
5. Three billion cubic feet of natural gas are stored in each tanker.
6. Texas and Louisiana consume more natural gas than most countries, and almost as much as China. Louisiana is the third largest consumer of natural gas (used as gas, heat, power generation, steam) and second in industrial consumption.
7. As natural gas prices increase, jobs in the chemical industry will decrease. 4,000 chemical industry jobs have been lost since 1998.
8. Natural gas is considerably cheaper in other parts of the world and is reinjected, piped, or flared off.
9. There are many pipelines in Louisiana that run throughout the country.
10. There is a lot of opposition to natural gas plants in the Northeast and Western United States.
11. Some natural gas is stored under Grand Bayou. Amost all natural gas is stored in salt domes.

Lighthouse Road Cleanup and Closure Presentation
Mr. Boudreaux stated that Dow obtained permission to clean up a waste site on Lighthouse Road on the river east of Woodland Road after it was identified as an historical disposal site believed to have been used in the 1950's-1970's. The cleanup was approved by DEQ and EPA, the Atchafalaya Levee Board, and the Army Corps of Engineers. The cleanup will be an excavation of approximately 30,000 cubic yards of materials which will be moved to Dow's permitted and regulated, on-site hazardous waste landfill. Sampling will be performed to ensure the complete removal of contamination in accordance with the plan approved by LDEQ and EPA. Ongoing monitoring will also be performed to make sure that there is no adverse impact to the air, land or water. The area will be backfilled as needed per the Corps of Engineers instructions, to make sure that the integrity of the levee remains intact. Area residents may notice more traffic activity and heightened security. The waste is being moved to a permitted and regulated area within Dow's facility as an extra precaution due to its location near the river. DEQ requested the move, and Dow agreed to it. There will be no health risks caused by the relocation.

The project is scheduled to take 3-4 months to complete. Preparation work is scheduled to begin in August 2004, with soil removal scheduled to begin in September. The soil removal will take approximately 8 weeks to complete and work will be done Monday-Friday beginning at 7:00 a.m. each day. The work must be done while the level of the Mississippi River is low.

Answers to Questions and Comments Included the Following:

1. The waste will be stored in an approved, permitted landfill that will be capped.
2. Dow does not anticipate odors from the move. The company and DEQ will perform monitoring to ensure there is no impact to workers at the site or area residents.
3. The materials being moved are primarily hexachlorobenzene and hexachlorbutadene. Both are byproducts of Dow's process.
4. Dow is investing in this project as a precaution, and at the request of DEQ.
5. The depth of the excavations will vary with the location, but will average several feet.
6. The "Hex" compounds are not water soluble, so they will not be able to get into the groundwater. They adhere to the soil.
7. Myrtle Grove and this issue are two different issues. There is absolutely no indication that Lighthouse Road is related to the vinyl chloride contamination at Myrtle Grove. More than 1,000 pieces of data have demonstrated the source or sources of contamination at Myrtle Grove stem from an area east of the trailer park.
8. The public was notified of the project through several public notices and a public hearing. The most recent public notice was published by DEQ at the end of March.
9. In 1986, the majority of the contaminants were identified and removed. Mr. Boudreaux will provide the CAP with information as to where they were moved.
10. It was requested that all public notices pertaining to permitting be included in future editions of "Dow in the News".
11. The Australia Point landfill has been capped and is not considered hazardous. It is not related to the Lighthouse Road area.
12. Even if the Lighthouse Road site were capped where it is, it would need to be moved because of its location along the river.

Next Meeting
A Dow CAP meeting will be held on Monday, August 16, 2004 to continue discussions on this topic. Included in the questions to be discussed will be the following:

1. Cost factors.
2. Time line.
3. An outline of a letter to be mailed to Dow neighbors.

Additional questions to be discussed may be E-Mailed to Rebecca Bentley at rmbentley@dow.com

The remainder of the August 9, 2004 agenda will also be discussed at the meeting.