After Explosion, Freeport LNG Rejoins the Gulf Coast Energy Export Boom

This report is part of a regular collaboration between the Texas Observer and Inside Climate News.

Federal regulators have cleared a gas terminal on the Texas coast to restart commercial production of liquified natural gas for export, eight months after an explosion rocked the facility and nearby towns.

Subsequent investigations revealed a host of problems with Freeport LNG—which super-cools fracked gas and loads it onto seafaring tankers—from overworked staff to overlooked engineering reports, which contributed to circumstances that led highly-combustible methane to leak from a pipe and catch fire last June.

Earlier this month, federal authorities presented findings at a public hearing and said that Freeport LNG had corrected safety issues and repaired damage. 

On Tuesday, the company announced that it received regulatory approval to get back to business. Michael Smith, a New York billionaire and founder of Freeport LNG, said in a statement that staffing increases and procedural improvements at the terminal would “enhance operational excellence.”

“Eight months of diligence, discipline and dedicated efforts by our teams, working collaboratively alongside the regulatory agencies and local officials, have positioned us to resume LNG production,” Smith said.

Freeport LNG will rejoin the energy export boom already unfolding on the Gulf Coast. It’s one of five working gas terminals in Texas and Louisiana that have cropped up in the last seven years and turned the U.S. from a major gas importer to the world’s top exporter. 

As gas prices abroad remain significantly higher than prices at home, most of those terminals have expansion plans. New projects slated for the Rio Grande Valley of Texas and Lake Charles, Louisiana, have been met with protest. All of them aim to sell the bounty of Texas’ fracking on international markets. 

These are high times for global gas traders. The disruption of Russian gas to Europe has raised prices, encouraging developers and fueling the buildout along the Gulf. According to a report released Wednesday by Friends of the Earth, BailoutWatch and Public Citizen, LNG exporters finalized 45 long-term deals in 2022 to sell U.S. gas abroad, up from 14 in 2021 and three in 2020.

Lukas Ross, a program manager at Friends of the Earth and an author of the report, said “the industry is shamelessly exploiting the crisis in Europe in order to lock in another generation of infrastructure.”

Despite the focus on Europe, he said, Asian buyers accounted for most long-term contracts for U.S. LNG, exported primarily from the Gulf Coast. Freeport LNG lacks long-term contracts because it rents its facility for gas suppliers to execute their own contracts with buyers abroad. 

Suppliers get the gas—a mixture primarily composed of methane—from Texas shale formations cracked open through hydraulic fracturing. For domestic consumption, it gets to users via pipelines. But for shipment and sales overseas it must be super-cooled and compressed through an energy-intensive process into liquified natural gas. That process happens in compressor trains at export facilities, where the liquid hydrocarbon is then stored in giant tanks at about -260 degrees Fahrenheit before export.   

According to a review presented this month by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA), the explosion at Freeport LNG happened when a pressure release valve failed to open, causing a pipe to overheat and burst.

The company said in a statement issued Tuesday that one of its liquefaction trains had immediately returned to service, while a second would come online within weeks and a third still required regulatory approval. It has previously announced hopes to build a fourth. 

For Naomi Yoder, a staff scientist with Healthy Gulf based in Houston, the troubles at Freeport offer a warning to other communities as an export sector continues to grow on the coast. 

“All of these plants have a significant risk because they’re storing this huge amount of frozen methane,” Yoder said. “There’s the potential for a much bigger, more catastrophic incident.”

Melanie Oldham, a physical therapist and environmental activist, remembers the day on June 8 when she stepped outside her home in Freeport to investigate a sudden sound like rolling thunder. She had reason to be concerned: her small city is surrounded by massive oil, gas and chemical plants, and is no stranger to industrial accidents.

The sirens and horns of the local emergency awareness system didn’t sound, so Oldham figured things were fine. Only later in the day did she and other residents learn from news reports that a serious accident was indeed unfolding nearby in Quintana Beach, a tiny town where just a few dozen permanent residents remain.

“A lot of people are really shook up,” Oldham, founder of Citizens for Clean Air & Clean Water of Brazoria County, told the Texas Observer in August.

Nobody inside the plant was hurt, according to officials from the federal Pipeline and Hazardous Materials Safety Administration. Local residents, however, felt the blast shake their homes and saw smoke and flames rise above the plant. On Quintana Beach, the explosion’s force threw lifeguards off their chairs and caused a toddler to hit his head on the rocks, according to the Houston Chronicle.

Freeport LNG initially expected to close for only weeks. But weeks stretched into months.

On Feb. 11, eight months after the explosion, a few dozen dedicated residents filed into the auditorium at Brazosport High School, home of the “Exporters” and “Lady Exporters” sports teams, whose names are an homage to the Port of Freeport. They were there to meet with representatives from PHMSA, the Federal Energy Regulatory Commission (FERC) and the U.S. Coast Guard about the proposed reopening of Freeport LNG.

Oldham and other local activists considered it a small victory that the meeting happened at all. For months they had pushed federal officials to address the community about the incident. 

At the meeting, Linda Daugherty, PHMSA’s deputy associate administrator for field operations, admitted the agency doesn’t often hold public meetings about facilities or incidents under investigation.

Representatives of Freeport LNG itself did not attend, a decision Freeport Mayor Brooks Bass excused, saying, “They have their reasons.”

Bass stressed at the meeting that communities on Texas’ Gulf Coast depend on the fossil fuel and petrochemical industries for jobs. “Freeport has been blessed with industry,” Bass said.  “But we have to live and work together in a way that’s safe.”

While local leaders have shown little appetite for antagonizing big industry, many residents of surrounding communities brought forth concerns about Freeport LNG and federal officials’ handling of the explosion’s aftermath. Several brought up the cumulative toll of growing up in the heavily industrialized area, where they regularly witness plant accidents and are exposed to daily air pollution.

“You don’t know what it’s like to have your house constantly rocked by explosions,” said Gwendolyn Jones, a Freeport resident and another member of Citizens for Clean Air & Clean Water of Brazoria County.

“That was one ‘small explosion,’ but notice all the other emissions,” said Surfside Beach resident Sue Page. She also told Daugherty that she was surprised PHMSA never sent staff out into the community to speak with residents following the explosion, and didn’t know about injuries people got that day.

“Is anyone monitoring the health of the people?” asked Freeport resident Manning Rollerson.

At the unusual meeting, Daugherty admitted PHMSA does not have a lot of human health expertise. Andrew Kohout, director of LNG facility reviews and inspection at FERC, said much the same. This gathering was the federal agencies’ attempt to engage with communities around the plants they regulate in a new way.

A significant barrier remains between the Biden administration and the residents of Freeport, Quintana Beach, and Surfside Beach—the classified nature of many of the FERC and PHMSA reports on Freeport LNG. While officials explained the cause of this particular explosion and the remedial steps the company had taken, they could not offer much information on the facility’s air emissions or its safety record.

“I appreciate you all being honest,” said Jones toward the end of the meeting. “There’s always time to start a new chapter.”