Long Island Sound Proposal Awaits Crucial Ruling

January 27, 2008 at 9:26 pm Leave a comment

FEDERAL approval for the liquefied natural gas plant that Broadwater Energy has proposed for Long Island Sound got closer this month when the Federal Energy Regulatory Commission staff concluded that the project, with 86 recommended changes, would have limited environmental impact.

Still, the road to acceptance has had some bumps in the past month. The New York State Department of Environmental Conservation called Broadwater’s application for various permits incomplete and rejected it, and a report by the General Accountability Office, Congress’s auditing arm, said the Coast Guard lacked the resources to protect liquefied natural gas terminals and ships carrying the gas.

Now, what could be either a project-ending roadblock or an even more significant green light is just ahead: a decision by New York’s Department of State, due Feb. 12, on whether the $700 million project is consistent with the state’s federally approved coastal zone management plan.

That decision — which Broadwater, energy analysts and project opponents in New York and Connecticut regard as crucial — will be followed by a formal statement from Gov. Eliot Spitzer that will reveal his position on the project for the first time, a spokesman for the governor said.

If the state finds the project inconsistent with its coastal plan, Broadwater could appeal to the federal secretary of commerce. If the secretary were to override that finding, New York could appeal in federal court, setting off a legal struggle.

Gov. M. Jodi Rell of Connecticut has said her state would challenge any approval for the terminal in court. In a letter dated Jan. 16, she told Mr. Spitzer that the plant would diminish the Sound.

The release on Jan. 11 of the regulatory commission’s report, its final environmental impact statement, was preceded by less-favorable announcements.

In a letter dated Dec. 21, New York’s Department of Environmental Conservation said that company submissions for air, water and hazardous material storage permits lacked required details and that the project, as proposed, “presents significant adverse impacts to the Long Island Sound aquatic environment and fishery.” The department also said Broadwater had failed to look at Atlantic Ocean sites as part of a required assessment of alternatives.

Then, on Jan. 10, the General Accountability Office released its report on the Coast Guard’s ability to provide security for the terminals and ships serving them.

John Hritcko Jr., the Broadwater senior vice president, remained optimistic, although he said a planned opening in December 2010 had been pushed back.

He said the project clearly fit within New York’s coastal plan. He also said the company was providing information requested by the Environmental Conservation Department, part of what he called normal give-and-take.

Energy analysts said that states, not federal regulators, were most often the key players in determining whether liquefied natural gas plants are built. Michael T. Rieke, the managing editor of Platts LNG Daily in Houston, said that with one exception, in Providence, R.I., the Federal Energy Regulatory Commission had approved all natural gas terminal applications.

Philip L. Dodge, an energy analyst for the Houston-based Stanford Group, said that obtaining state permits and approvals was a more daunting challenge. California has blocked an offshore project, he said.

Forty-seven liquefied natural gas terminals are currently proposed in the United States, Canada and Mexico, including two others in the region.

As the New York decision approaches, Broadwater opponents, including Connecticut’s attorney general, Richard Blumenthal, and United States Representative Timothy H. Bishop of Southampton are urging Mr. Spitzer to support BlueOcean Energy, a liquefied natural gas plant that ExxonMobil recently proposed in the Atlantic. It would be 20 miles off the New Jersey coast and 30 miles from New York.

“That would be a reasonable alternative,” Mr. Bishop said.

MR. BLUMENTHAL has argued that the BlueOcean project would be safer and less environmentally damaging and deliver more natural gas than Broadwater. He is urging New York to deny Broadwater another key approval, a lease for the seabed where its mooring yoke would be erected.

BlueOcean would provide 1.2 billion cubic feet of natural gas a day to New Jersey and New York and be in operation by 2015, ExxonMobil said. Another LNG terminal backed by private investors, Safe Harbor Energy, is proposed for an artificial island 13.5 miles off Long Beach, and its sponsors say it would deliver two billion cubic feet of natural gas a day.

Broadwater contends that its plant, which would provide a billion cubic feet of natural gas to New York City, Long Island and Connecticut each day, is needed, economically advantageous, environmentally benign and safe. Its proposed site is nine miles off Wading River and about 10 miles from Connecticut.

Broadwater’s positions are upheld in the Federal Energy Regulatory Commission staff’s report.

The staff rejected opponents’ arguments that the 1,215-foot-long, 10-story terminal would industrialize the Sound. The report also agreed with Broadwater that the plant and tankers that supplied it would be unlikely targets of terrorism because they would be far from population centers.

Giuliani Partners, a consulting company in which Rudolph W. Giuliani holds an equity interest, remains the security consultant for the project, Mr. Hritcko said. Before announcing his candidacy for the Republican presidential nomination, Mr. Giuliani supported Broadwater as being desperately needed.

Sunny Mindel, a company spokeswoman, said Mr. Giuliani had taken no part in its day-to-day operations since June and received no salary. She said the company had no comment on the G.A.O. report or the regulatory commission’s environmental impact statement.

Senator Hillary Rodham Clinton of New York, a Democratic presidential candidate, has opposed the project as unsuitable for the Sound. Senator Charles E. Schumer has also opposed it, as have Steve Levy, the Suffolk County executive, and a number of other elected officials on Long Island and in Connecticut.

Connecticut opponents of the project said they recognized that New York holds the key.

“We have and continue to look to New York State to stand up for Long Island Sound and the citizens of New York and Connecticut,” said Leah L. Schmalz, the director of legislative and legal affairs for Save the Sound in New Haven. “Because the final environmental impact statement proves that FERC will not.”

By JOHN RATHER

NY Times

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