NY State's rejection of Broadwater LNG project does not necessarily create impasse

Three weeks after winning Federal Energy Regulatory Commission approval, a large floating liquefied natural gas terminal, storage and regasification project which has been proposed for construction in Long Island Sound was rejected by New York's state government.

Secretary of State Lorraine A. Cortes-Vazquez said on Apr. 10 that the Broadwater LNG project, a joint venture of TransCanada Corp. and Shell US Gas and Power Co., does not meet requirements under New York's coastal zone management plan. The installation aims to deliver up to 1.25 billion feet per day of regasified LNG to electric power plant and home heating customers. FERC approved the project on Mar. 20.

Cortes-Vazquez said that the proposed project is not consistent with six policies under the sound's coastal zone management program. "This was a very complex and difficult decision. The thorough analysis in today's ruling makes clear the importance of protecting the character of Long Island Sound, as it points the way to sensible alternatives for meeting New York's long-term energy needs," she said.

"The needs must be balanced with a positive trajectory of improving the health of the Long Island Sound ecosystem. One cannot predict the future, but a correct decision can influence it," Cortes-Vazquez continued.

At first glance, it would appear to signal an impasse between the federal and state governments. But the federal LNG project permitting process provides a means for Broadwater's sponsors to appeal New York's action and give the state an opportunity to fully describe its concerns. The state also has proposed two alternative sites.

Energy board reactivated

In announcing the decision, Gov. David A. Paterson said he will establish a state energy planning board, led by Deputy Secretary for Energy Paul DeCotis and comprised of representatives from the state's major energy, environmental, economic and transportation agencies, to prepare a comprehensive energy plan for New York.

The state's energy planning statute expired in 2003 and it has not had an energy plan since despite advances in science and technology and the emergence of global climate change as an issue, he noted.

Paterson also directed that the state's two major power agencies, the Long Island Power Authority and the New York Power Authority, to "aggressively pursue energy conservation." Finally, he said he would begin to investigate alternative proposals as well as LNG to increase natural gas pipeline capacity to Long Island and the downstate region.

"One of my goals as governor is to protect Long Island Sound, by preserving it as a valuable estuary, an economic engine for the region, and a key component to making Long Island's quality of life one of the best in the country. Broadwater does not pass that test. Shame on us if we can't develop a responsible energy policy without sacrificing one of our greatest natural and economic resources," he declared.

Paterson said that his concerns regarding the proposed LNG project include its size, its potential disruption of commercial and recreational fishing, and its allegedly not guaranteeing low-cost gas to Long Island consumers.

'Dangerous precedent'

It would be the first time in Long Island Sound's history that such a large section of open water was handed over to a private company to the public's exclusion, according to the governor. Privatizing open water would be fundamentally wrong and be a dangerous precedent for industrializing a body of water that people have spent years and millions of dollars trying to clean up, he maintained.

Paterson, who chaired the state's renewable energy task force when he was lieutenant governor, said that the Broadwater project might not even be needed if alternative technologies are aggressively pursued.

In response, John Hritcko, Broadwater's senior vice president and the project's director, said he was disappointed and concerned by the state's decision. "We specifically designed this project to be consistent with the State's coastal management policies and offered a number of additional commitments that would further enhance the State's coastal resources," he said on Apr. 10.

Broadwater's sponsors will review specific aspects of the state's decision before deciding on their next steps, he continued. In announcing the decision, Cortes-Vazquez said that there were two other sites on the Atlantic Ocean side of Long Island outside state boundaries where a floating storage and regasification unit could be constructed and conform to New York's coastal management plan. The first, which would be 13 miles offshore in about 80 feet of water, could be connected by a submerged pipeline to the existing Transco-Long Beach pipeline. The second, some 22 miles south of Fire Island Inlet in approximately 130 feet of water, could be connected to the Iroquois Gas Transmission System through offshore and onshore pipelines.

"We continue to believe that the Broadwater project, as proposed, is the best option for New York State to meet its growing demand for clean, affordable, reliable natural gas – and does so with no near shore or onshore impacts. Further, the US Coast Guard and [FERC] have determined that with the mitigation measures proposed by Broadwater and those they have recommended, Broadwater can operate safely and securely in Long Island Sound and will have less environmental impacts than any other alternative," Hritcko said.

Another possible step

The project's developers also could appeal to the US Commerce Secretary Carlos Gutierrez and seek a ruling on whether the state's decision is, in fact, consistent with New York's coastal management plan under the federal Coastal Zone Management Act. Broadwater is not the first East Coast LNG project to encounter state and local government opposition: AES Corp.'s proposed onshore terminal and regasification installation at Sparrows Point near Baltimore has generated strong protests from Maryland state, county and local government officials.

But Bill Cooper, president of the Center for Liquefied Natural Gas in Washington, said that Paterson's idea of having an energy task force develop a comprehensive strategy for New York is hardly new. "It's not an uncommon refrain. People in the Northeast agree they need more natural gas. The question still is where to put the facilities," he told OGJ Washington Pulse on Apr. 17.

Markets determine the need for projects while the federal and state governments protect the environment and surrounding communities, he continued. "Certainly, there's demand for the gas Broadwater would provide. You have only to look at the New York city gate spot prices through each winter to see this," Cooper said.

FERC's Mar. 20 approval of the Broadwater LNG project after more than three years of deliberation does not necessarily mean it will go ahead at its current planned location, he added. The decision essentially provided a working document with more than 80 conditions which developers will have to meet before the federal energy regulator issues a construction permit, he said.

"The important point is that the process apparently is moving forward. And yes, developers of other LNG projects are watching closely as it does," Cooper said.

Contact Nick Snow at nicks@pennwell.com

Related Articles

Shell cancels Arrow LNG project

01/30/2015

Royal Dutch Shell PLC has abandoned its plans for what would have been a fourth coal seam gas-LNG project at Gladstone in Queensland.

DOE could meet 45-day LNG export decision deadline, Senate panel told

01/29/2015 The US Department of Energy would have no trouble meeting a 45-day deadline to reach a national interest determination for proposed LNG export faci...

Douglas Channel LNG moves toward 2018 startup

01/29/2015 Exmar NV, EDF Trading, and AIJVLP, a joint venture of AltaGas Ltd. and Idemitsu Kosan Co. Ltd., have taken full ownership of the 550,000 tonne/year...

Mitsui charters two more LNG ships for Cameron export project

01/29/2015 Mitsui & Co., Ltd., Tokyo, reports contracts for chartering two new ships to transport LNG to Japan from the Cameron LNG export project in Loui...

US House approves bill aimed at increasing LNG exports

01/28/2015 The US House of Representatives passed a bill aimed at increasing US LNG exports by requiring the Department of Energy to determine whether a proje...

Americans warm up to gas

01/26/2015 As you pick up the latest edition of OGJ after another volatile day in oil and gas, collapse into your favorite chair that's stationed next to your...

Gazprom’s Baltic LNG project to be built in Ust-Luga

01/23/2015 OAO Gazprom has determined that its 10-million-ton Baltic LNG plant will be built near the seaport of Ust-Luga, Leningrad Oblast, Russia. The proje...

Gorgon LNG project signs LNG supply deal with SK Group

01/21/2015 The Chevron Australia-led Gorgon LNG project offshore Western Australia has signed a binding sales and purchase agreement to supply 4.15 million to...

Magnolia LNG signs MOU for fourth train

01/19/2015 Magnolia LNG LLC (MLNG) signed a memorandum of understanding with Kellogg Brown & Root LLC, a wholly owned subsidiary of KBR Inc. (KBR), and SK...

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts



The Future of US Refining

When Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST



On Demand

Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected