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Lloyd's executive likens LNG attack to nuclear explosion

U.S. regulators don't share the concerns of the top official at the world's second-largest commercial insurer.

A terrorist attack on an LNG tanker "would have the force of a small nuclear explosion," according to the chairman of Lloyd's, a British insurer of natural gas port facilities like the ones being proposed in Fall River and Providence.

The assertion, which is contested by industry experts, was in a speech that the chairman, Peter Levene, delivered last night to business leaders in Houston.

Levene described Texas as a "state at risk" and said that securing its remote oil facilities is a "particular challenge."

"Gas carriers too, whether at sea or in ports, make obvious targets," said Levene. "Specialists reckon that a terrorist attack on an LNG tanker would have the force of a small nuclear explosion."

Levene did not name the specialists in his remarks, although a text of his speech contains a footnote. The footnote attributes the observation to the author of an article posted, in an abbreviated form, on the Web site of Jane's Terrorism and Security Monitor in July. The same abstract, apparently authored by the same person, Dr. J.C.K. Daly, was also posted on the Internet weblog Talk Show American.

Levene also did not specify Texas LNG port facilities and tanker ships that might be at risk.

Records kept by federal regulators show that several LNG port facilities have been proposed in Texas. They do not show any existing facilities.

Levene's company, Lloyd's, is the world's second-largest commercial insurer.

The chairman could not be reached for comment yesterday.

Some critics of the proposal in Fall River have spoken in apocalyptic terms of potential LNG disasters.

But to date, no official reports by government regulators have made comparisons between the various LNG catastrophes that experts have hypothesized and destruction from an atomic bomb.

One report does describe hypothetical fires that might erupt if gas leaks from a tanker in its liquid form changes into a gaseous form and ignites when it comes into contact with a flame.

In one instance, the blaze, in less than a minute, would be capable of inflicting third-degree burns a little less than a mile away.

Bryan Lee, a spokesman for the Federal Energy Regulatory Commission, said federal regulators have not changed their analysis.

"Just about any expert will come up with a different assessment regarding LNG depending on the parameters and assumptions they have," said Lee, who emphasized the LNG shipping industry's safe track record.

Regulators, he said, will review the safety of different LNG proposals on a case-by-case basis.

"We stand by all of our analysis on this matter," he said.

David Manning, a spokesman for the company with plans for an LNG shipping facility at Fields Point in Providence, was taken aback by Levene's comments.

"This is completely inconsistent with any of the science and analysis that is currently in the public domain," Manning said.

Governor Romney, meanwhile, is asking for more time to study a proposed liquefied natural gas facility in Fall River, saying federal regulators haven't adequately studied potential dangers posed by a terrorist attack on a tanker.

Romney sent a letter to FERC Secretary Magalie Salas yesterday, saying terrorism must be considered as a possible threat.

"There is simply no way that it makes sense to site an LNG facility in this location in the post-911 world," Romney wrote. "A thorough review would confirm this conclusion."

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