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Risk analysis and policy analysis can play important roles in facilitating the siting of potentially hazardous facilities if one recognizes the descriptive features of the decision process. The case of siting a liquified natural gas (LNG) facility in California illustrates the multi-party sequential nature of the process and the role that widely differing risk estimates play in fueling conflicts between stakeholders. Risk analysis does have a useful function in clarifying the nature of the potential losses, particularly if rules of evidence are instituted for evaluating different studies. Policy analysis can facilitate the negotiation process by the use of compensation to redistribute gains and losses between the different parties. Examples from case studies are presented to illustrate the challenges for risk analysis and policy analysis in the siting process.

This paper is motivated by the apparent gap in the recent “risk” literature between understanding individual perceptions and evaluations of technological risks and the ways in which these risks are handled by public institutions. The paper contrasts the accepted (prescriptive) model of individual decision making under uncertainty with the political processing of uncertainties, where “risk” decisions are not made single-handedly by a regulatory body, but are negotiated sequentially by public officials, industrial representatives, and public interest groups. It is shown that in this setting neither the regulatory agencies nor the other actors in the processcan easily operate with an open recognition of the scientific uncertainties underlying their policy decisions. Institutional reforms that allow policy makers to address more openly these uncertainties are suggested.

This chapter, deals with the siting and approval process for a liquefied natural gas (LNG) import facility at Wilhelmshaven in the Federal Republic of Germany. The major aspects of the political decision-making process are summarized, focusing on the role of technical analyses of public safety risk in this decision. The most remarkable feature of this process was that despite the novelty of the LNG technology in the FRG, it deviated very little from established industrial siting and approval procedures. Public interest in the project and concerns about its acceptability did not rise above a relatively low level. At some point, however, unexpected difficulties related to the question of safety risk seemed to threaten the approval of the terminal, but these were eventually overcome by the federal government in a rather elegant way, leaving little more than ripples on the surface.

In the late 1960s, based on projections of decreasing existing natural gas supplies and increasing demand, several US gas companies began to seek additional supplies. In 1974, Western LNG Terminal Company, representing the terminal siting interests of three major utility companies, applied for approval of three LNG import sites on the California coast: Point Conception, on a remote and attractive part of the coast; Oxnard, a port city; and Los Angeles, a large harbor metropolis (see Figure 6.1). Western sought approval for all three sites in order to minimize the volume of tanker traffic at any one site, to separate ownership and control, and to reduce the risk of LNG supply interruption due to possible problems at any one location. The LNG would be shipped from Alaska’s North Slope, Cook Inlet in southern Alaska, and Indonesia to the three sites. After nearly a decade of controversy, the utilities have announced that they will defer pursuing further their application for Point Conception, the one site remaining under active consideration, because California no longer needs to import natural gas.

The Gasworks company has filed an application to locate a liquefied energy gas (LEG) terminal in the vicinity of Pietersdorf. Gasworks feels that this proposed project is economically justifiable from an investment point of view. It has also been encouraged to undertake such a project by the National Energy Board, because LEG promises to meet some of the country’s future energy needs. The community of Pietersdorf stands to benefit from the plant insofar as it will provide additional tax revenues and future employment opportunities. However, some residents from the town are concerned about the impact of the facility on their future safety given the risk, even though relatively small, of a serious accident that might damage property as well as threaten lives. In addition, this group is concerned with the potential negative effect of large-scale technological facilities on the future quality of the environment and the lifestyle of their children and grandchildren. Environmentalist groups have voiced similar concerns and are opposed to the project.

Comparing four case studies presents an analytic challenge since each country has its own style, decision process, and institutional arrangements. This chapter presents a set of unifying concepts that are sufficiently broad to enable us to structure the siting procedure in each country using a common framework. Building on these concepts we develop a set of reader’s aids that clarify the sequence of key events, the main concerns of the interested parties, and the arguments each stakeholder brings into the policy arena. Most importantly, these aids indicate how each siting problem was initially formulated and how it evolved over time.

Plans to import liquefied natural gas into the Netherlands were first drawn up in the early 1970s and resulted in the initiation of studies and discussions on various aspects of LNG technology. The siting question, however, was not an urgent one until 1977, when a contract was signed with the Algerian company Sonatrach to import 4 billion m3 of LNG per year, for a 20-year period starting in 1983. Following extensive political discussions at various levels, an LNG terminal site at Eemshaven, in the northern province of Groningen, was finally selected and approved by the Dutch cabinet and parliament in 1978 (Tweede Kamer 1978). This decision outcome was significant because Eemshaven only became a serious candidate in late 1977; detailed studies and policy advice to and within the government (including the cabinet) had previously focused on Maasvlakte in the Rotterdam harbor area, as the preferred terminal site (see Figure 4.1).

This chapter provides a review of some aspects of the decision and approval process involved in the siting of liquefied energy gas (LEG) facilities at Mossmorran and Braefoot Bay in Fife, Scotland. The terms of reference for this decision process were for the international oil companies Shell and Esso to obtain outline planning permission (i.e., official approval in principle) for the following: (a) An application by Shell for natural gas liquids separation facilities at Mossmorran, and associated jetty facilities at Braefoot Bay. (b) An application by Esso for an ethylene cracker plant at Mossmorran and associated jetty facilities at Braefoot Bay. (c) An application by Esso for industrial development at Mossmorran.

One of the most challenging problems in decisions concerning the deployment of novel, large-scale technologies is the assessment of the risk to the surrounding populations. In particular cases, such as nuclear reactors or liquefied energy gas (LEG) facilities, the political process involved may tend to focus on one particular form of that risk: the risk to life from catastrophic accidents. This chapter examines several assessments of this type with two main goals in mind: (1) to present and compare the various risk assessment procedures as they have been applied to LEG terminal siting, and in so doing to clarify the limits of knowledge and understanding of LEG risks (2) to quantify and compare the risks estimated in analyses prepared for four LEG sites, namely: Wilhelmshaven (Brötz 1978; DGWE 1979; Krappinger 1978a,b,c; WSB 1978) - Eemshaven (TNO 1978) - Mossmorran—Braefoot Bay (Aberdour and Dalgety Bay Joint Action Group 1979, henceforth referred to as Aberdour; Cremer and Warner 1977; HSE 1978a) - Point Conception (ADL 1978; FERC 1978; SAI 1976)

The descriptive material presented on the four case studies illustrates how different interested parties form strategies and present arguments to defend their positions regarding the siting of technological facilities. This chapter has a prescriptive flavor by focusing on ways to improve both the decision process and the resulting outcomes.